Oranje Soutwerke Upington (Pty) Ltd v Master Foods SA (Pty) Ltd (107/04) [2004] ZANCHC 74 (10 September 2004)

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[2004] ZANCHC 74
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Oranje Soutwerke Upington (Pty) Ltd v Master Foods SA (Pty) Ltd (107/04) [2004] ZANCHC 74 (10 September 2004)

Reportable: Yes /
No
Circulate to
Judges: Yes / No
Circulate
to Magistrates: Yes / No
IN THE HIGH COURT
OF SOUTH AFRICA
(Northern Cape
Division)
Case no: 107/04
Date
heard: 2004-09-03
Date
delivered: 2004-09-10
In
the matter of
:
ORANJE
SOUTWERKE UPINGTON (PTY) LTD EXCIPIENT
(Defendant)
versus
MASTER
FOODS SA (PTY) LTD RESPONDENT
(Plaintiff)
Coram:
MAJIEDT
J
JUDGEMENT
MAJIEDT
J:
The
Defendant has excepted to the Plaintiff’s Particulars of Claim,
alleging that it discloses no cause of action, alternatively
that it
is vague and embarrassing. The exception is based on two grounds.
It
is necessary to set out in some detail the pleadings and the
exception. The relevant parts of Plaintiff’s Particulars of Claim
read as follows:
“
3.1 On or about
26 June 2001 and at Rosslyn, the parties entered into a partly
written and partly oral contract in terms whereof the
defendant
agreed to supply plaintiff with salt on credit for the purpose of
manufacturing pet food products.
3.2 A
copy of the agreement is annexed hereto marked “A”.
3.3 In
concluding the agreement, the plaintiff was represented by its
commercial director, Charles Cheah and defendant by a person
whose
identity is presently unknown to plaintiff.
3.4 The
agreement, Annexure A, contained all the express terms of the sales
agreement which are relevant for present purposes.
3.5 It was an
implied term of the agreement that defendant would supply plaintiff
with salt that was free of contamination, and/or
that was suitable
for the manufacture of pet food products, more particularly in that
the salt supplied by defendant would not render
the food products
manufactured by plaintiff unfit for consumption.”
3.1 In
its first ground of exception, the Defendant refers to clause 8 of
the written agreement between the parties (Annexure A to
the
Particulars of Claim) which reads as follows:
“
8. This
document
shall
form the whole and only contract between the Seller and the
Purchasers and no variation of this Agreement shall be binding upon
the parties unless reduced to writing and signed by the parties
hereto and no relaxation or indulgence shown by any of the parties
to
each other, shall in any way prejudice or restrict their rights
hereunder”.
3.2 The
Defendant then avers that:
a) the
implied term of the agreement pleaded in par. 3.5 of the
Particulars of Claim; and
b) the
phrase “
partly
written and partly oral
”
which appears in par. 3.1 of the Particulars; and
c) the
phrase “
for
the purpose of manufacturing pet food products”
in
the aforementioned par. 3.1 thereof,
are
all inconsistent and irreconcilable with the contents of clause 8 of
Annexure A.
3.3 Consequently
the Defendant avers that the Particulars fails to disclose a cause of
action, alternatively is vague and embarrassing.
4.1 With
regard to the second ground of exception, the Defendant quotes
clause 13 of the written agreement, which reads:
“
The
Seller accepts no responsibility for any
damages,
or any other loss, whether direct or consequential, that may be
suffered by the Purchaser, or any persons claiming through
the
Purchaser or by any other persons in connection with the delivery and
or specification of the goods, or otherwise. The Purchaser
indemnifies the Seller and holds the Seller harmless against any such
damages or loss that might arise.”
4.2 The
Defendant avers that the Plaintiff’s damages claim is for damage
and consequential damage caused by the alleged metal contamination
of
the salt purchased by the Plaintiff from the Defendant – a cause of
action which is squarely covered by the exclusion in clause
13;
consequently the Particulars discloses no cause of action or is vague
and embarrassing according to the Defendant.
5. It
will immediately be observed from the aforegoing exposition that the
provisions of Annexure A are central to the Defendant’s
exception.
It is therefore in my view a useful point of departure to examine
Annexure A more closely.
6.1 Annexure
A consists of two parts, firstly an application for credit facilities
bearing the Defendant company’s name on top and
completed by hand
by a person presumably in the employ of the Plaintiff company.
The
second part of Annexure A is a printed document in Afrikaans and
English, with the heading “
Standard
Conditions of Sale & Deed of Suretyship
”
(in Afrikaans: “
Voorwaardes
van Verkope & Borgakte”)
.
The
English version of this document has been dated and signed by a
person designated as “
commercial
director Masterfoods SA”
(i.e. the Plaintiff company).
6.2 An
important feature of this second part of the agreement is that both
clauses 13 and 17 of the English version have been crossed
out â€“
in the latter instance (viz. clause 17) there is a signature appended
adjacent to the crossing out.
6.3 A
further important feature is that neither one of the two parts of
Annexure A contains any of the following
essentialiae
of
an agreement of purchase and sale:
a
description of the
merx
;
the
purchase price;
the
quantity of goods.
7. Mr.
Nel, for the Excipient /Defendant, has argued with considerable force
that, in the first instance, a written agreement containing
a sole
memorial clause (clause 8) cannot in law co-exist with a partly
oral agreement nor with an implied term as pleaded.
He relies for
this contention on the parol evidence rule as well as the clear terms
of the sole memorial clause.
With
regard to the second ground, Mr. Nel has submitted that the
provisions of clause 13 are equally clear and also that the
Plaintiff has not advanced any reasons why clause 13 does not
have any operation in law.
8. I
am
ad
idem
with Mr. Donen, for the Plaintiff, that as far as the first ground of
exception is concerned, the Defendant has completely misconstrued
the
Plaintiff’s claim. It is abundantly clear in my view that the
Plaintiff has based its claim on contract and on the implied
warranty
against latent defects. The latter flows
ex
lege
and not
ex
contractu
;
see:
Phame
(Pty) Ltd v Paizes
1973(3) SA 397(A) at 416 H.
9. In
addition, a merchant who sells goods which he has manufactured
himself (such as the Defendant), is liable to a purchaser (the
Plaintiff
in
casu
)
for consequential damages suffered by the purchaser by reason of any
latent defect in the goods sold; see:
Holmdene
Brickworks (Pty) Ltd v Roberts Construction Co. Ltd.
1977(3) SA 670(A) at 682 H – 683 B.
10. A
sole memorial/non-variation clause invariably has the effect of
curtailing the common law freedom to contract and should consequently
be restrictively interpreted; see:
Randcoal
Services Ltd and others v Randgold and Exploration Co Ltd
1998(4)
SA 825(SCA) at 841 F.
11. There
is furthermore authority for the proposition that such a clause does
not bar investigation into the existence and contents
of implied and
tacit terms; see:
Kerr:
The
Principles of the Law of Contract
,
6
th
ed. at 139, footnote 589.
12. The
Defendant’s objection to the Plaintiff’s reference to a “partly
oral” agreement is also without substance. As I have
indicated,
certain of the
essentialiae
of
an agreement of purchase and sale e.g. description of the
merx
and
price, are nowhere to be found in the written agreement. The
inference is compelling that such matters were to be negotiated
further, outside the written agreement.
13. For
the reasons aforementioned, I am of the view that the first ground of
exception is devoid of merit.
14.1 Turning
to the second ground of the exception – I have already alluded to
the fact that clause 13, on which the Defendant
has placed much
reliance, has been crossed out. This immediately raises the
possibility of a potential factual dispute as to whether
the clause
was in fact part of the parties’ agreement or not.
14.2 Even
if clause 13 is to be regarded as part of the agreement, I am
not persuaded that it was intended to be a blanket exclusion
of
liability. The use of the words “...
in connection with the delivery and or specification of the goods, or
otherwise
....”
is quite instructive in this regard. By application of the
eiusdem
generis
rule, I do not believe that the words “
or
otherwise
”
assists the Defendant, as has been contended by Mr. Nel. The
Afrikaans version reads: “...
wat
in verband staan met die aflewering en/of spesifikasie van goedere of
andersins nie
...”.
In my view liability was intended to be excluded only in the
instances mentioned. At the very least, this clause can hardly
be
described as a model of clarity and certainty.
14.3 An
exclusion clause, such as clause 13
in
casu
,
should be construed “
bearing
in mind that they seek to limit or oust a (contracting) party’s
common-law rights
”
per Lewis AJA in
Van
der Westhuizen v Arnold
2002(6)
SA 453(SCA) at 464 D. A narrow interpretation is therefore
called for:
Christie,
The
Law of Contract
,
4
th
ed. at 214.
14.4 Furthermore,
such a clause is to be construed
contra
proferentem
,
i.e. against the party for whose benefit the exclusion exists and at
whose behest it has been drafted; see
Christie
op cit
,
255-7.
Van
der Westhuizen v Arnold
supra
at 468 J – 469 A.
15. By
virtue of the aforegoing, I am satisfied that the second ground of
exception also lacks merit.
16.1 In
coming to the conclusion that the two grounds of exception must fail,
I am ever mindful that it is required of a litigant
that he/she/it
pleads clearly and concisely the material facts on which reliance is
placed, with sufficient particularity to enable
the other party to
plead thereto [rule 18(4)].
16.2 The
ultimate test is one of serious prejudice to the excipient in cases
where it is alleged that a pleading is vague or embarrassing;
see:
Levitan
v Newhaven Holiday Enterprises CC
1991(2) SA 297(C) at 298 A,
and
the onus rests on the excipient in this regard.
16.3 The
pleader is entitled to a benevolent interpretation; more
importantly, matters of law need not be pleaded and the pleading
has
to be read as containing those allegations which are implied in the
express allegations stated in the pleading; see:
Nel
and others NNO v McArthur
and
others
2003(4)
SA 142 (T) at 149 F-G.
17. In
the premises I take the view that the exception must fail on both
grounds advanced.
18.
THE
EXCEPTION IS DISMISSED WITH COSTS.
___________
SA
MAJIEDT
JUDGE
ADVOCATE FOR
THE EXCIPIENT : TJ NEL
ADVOCATE
FOR THE RESPONDENT : M DONEN SC
ATTORNEY FOR THE
EXCIPIENT : ENGELSMAND BENADE & VAN DER WALT
ATTORNEY
FOR THE RESPONDENT : DUNCAN & ROTHMAN
DATE OF HEARING : 2004-09-03
DATE
OF JUDGEMENT :
2004-09-10