REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, JOHANNESBURG)
Case No: A2024-054003
IN THE MATTER BETWEEN:
RAM TRANSPORT APPELLANT
SOUTH AFRICA (PTY) LTD
t/a RAM HAND TO HAND COURIERS
AND
DHL SUPPLY CHAIN RESPONDENT
SOUTH AFRICA (PTY) LTD
JUDGMENT
Siwendu J (Maier- Frawley J and Flatela J concurring):
DELETE WHICHEVER IS NOT APPLICABLE
) REPORTABLE: NO
) OF INTEREST TO OTHER JUDGES: NO
) REVISED: NO
29.04.2025
DATE SIGNATURE
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Introduction
[1] The is appeal involves a contractual dispute between the appellant, RAM
Transport (South Africa) Pty Ltd t/a RAM Hand-to-Hand Couriers, (RAM) and
the respondent, DHL Supply Chain (South Africa) (Pty) Ltd (DHL).
[2] RAM and DHL are well known logistics and supply chain companies.
DHL provides wholesale distribution services. DHL conducts the wholesale
distribution of pharmaceutical products, which feature in this appeal, through its
Life Sciences and Healthcare Distribution Supply Chain division (LSH). LSH’s
clients, referred to as “the principals,” include companies like Bard Medical,
BMX, Octopharma, Smith and Nephew, Mlungisi Healthcare and Omni. LSH
wholesale distribution service has two components, a multiuser facility and one
dedicated to Netcare (also referred to as Omni).
[3] RAM provides bulk collection and delivery services, warehousing
management services, courier services and other logistics services. It has an
established footprint and operates forty two hubs throughout the Southern African
region. It also provides shipments and courier services containing medical and
pharmaceutical products to its own clients like United Pharmaceutical
Distributors, Dischem, Dischem Oncology, Transpharm, Equipharm.
[4] The wholesale distribution of pharmaceutical products is regulated by the
Medicine Control Council (MCC). Other applicable regulatory standards include
the Good Wholesaling Practice, Pharmaceutical Inspection Convention,
Pharmaceutical Inspection Co-operation Scheme and South African National
Accreditation System. Quality assurance and Health and Safety, and Standard
Operating Procedure are a critical to the provision of the wholesale distribution
service. DHL is licensed to conduct its wholesale distribution business in respect
of pharmaceutical products in terms of these regulations. When it subcontracts its
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deliveries services to third parties, such as RAM, it cascades the regulatory
compliance to its subcontractors.
[5] The trial evidence showed that it requires infrastructure comprising
warehousing (hubs and depots), temperature controlled vehicles. Coordination
between the wholesaler, the distribution service provider and the end customer,
through efficient IT systems, is an integral component of the distribution service.
The maintenance of a cold supply chain at varying levels to safeguard integrity
and quality of the pharmaceutical products is a critical requirement. The rates for
transportation of the pharmaceutical products are linked to whether they are
transported by road and or air freight and depend on customer delivery
requirements. This has an implication on rates charged and the profit margin to
be realised between the wholesaler and the distributor. These considerations
featured prominently during the trial and subsequent disputes between the parties.
[6] The disagreement on appeal is about whether, when DHL nominated RAM
in terms of a Letter of Intent (LOI) to distribute pharmaceutical products on its
behalf, the parties concluded a binding unconditional contract. It is common
cause that from 26 March 2018 to July 2018, RAM distributed pharmaceutical
products on DHL’s behalf. Whether by permitting RAM to provide the
distribution services, DHL suspended or waived the need to conclude a contract
is in issue. The terms upon which RAM provided the distribution services during
that period are in dispute.
Background
[7] In August 2017, Mr Craven (Craven), DHL’s Sourcing and Procurement
Manager sent a Request for Quotation (RFQ) to RAM’s Senior Sales Executive,
Mr Walker (Walker), in what RAM alleged was a closed bid, requesting RAM to
populate a Case Study and provide DHL with rates for distributing
pharmaceutical products. Craven and Walker, both members of the respective
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parties’ sales teams, played a prominent role during the RFQ process. At the time,
DHL had subcontracted the delivery services to Seabourne Couriers (Seabourne)
[8] RAM submitted its last proposal on 11 September 2017, after Craven
consulted with Mr Graeme Lazarus (Lazarus), RAM's Managing Director,
following a request by Craven for RAM to adjust its initial rates. The last proposal
comprised of: (a) the populated case study, (b) the rate cards recording pricing
and (c) the Statement of services.
[9] It is common cause that before the nomination, between 12 September
2017 and 30 November 2017, RAM and DHL representatives held discussions to
ascertain DHL’s requirements. The companies conducted reciprocal site visits to
inspect each other’s infrastructure. Separate meetings were held between Ms Gail
Mkele (Mkele) and Cindy Hayward (Hayward), RAM and DHL’s responsible
pharmacists, to understand the nature of RAM's service offering and what would
be required to deliver the services stipulated by the RFQ.
[10] On 30 November Craven advised Walker that RAM’s proposal was
successful, and congratulated RAM on the “successful nomination”, stating that
“we wish to initiate the implementation planning going forward.” A letter dated
27 November 2017 signed by Graven and Ms Margareutte van der Merwe (Van
der Merwe), the designated General Manager LS & H (DSC), was attached to
Craven’s email. Craven reported to Van der Merwe. I return to the contents of
the letter, which must be read with the RFQ in due course.
[11] On 30 November 2017, DHL terminated the distribution service contract
with Seabourne with effect from 31 January 2018. In addition, Ms Lindie Smith
(Smith), the Key Accounts manager for Netcare, advised Ms Anthea Richie, that
RAM would be taking over the distribution services from Seabourne. Netcare is
one of DHL’s significant customers, constituting 60% of the pharmaceutical
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products business. Walker testified that from December 2017 he and Craven
worked on “implementation plans.”
[12] During December 2017, Mr Derrick Bode (Bode), entered the discussions
as the newly appointed operations manager and became a key role player. His
role was to ensure that RAM and DHL would be operationally ready to render the
services from the “go live date” on 1 February 2018. Craven and Walker
scheduled a site visit with Bode and others on 14th December 2017.
[13] A separate meeting between the principal pharmacists Hayward and Mkele
took place in tandem, to exchange information on the pharmaceutical related parts
of the service, in particular, the pre supplier Audit processes, Quality
Management System, Health and Safety Policy audit. After this meeting, Mkele
forwarded RAM’s Standard Operating Procedures (SOP) and existing Quality
Assurance documents to Hayward.
[14] On 18 December 2017, Walker circulated the first project “medical
implementation tracker report” to Bode, Padayachee, Craven (the DHL team)
reflecting items discussed and milestones to be achieved on different components
of the logistics and distribution chain. Bode’s evidence was that Change
Management control from one service provider to another was an important
component of the project plan and integral to the readiness to “go -live.” The
induction or training of personnel, ensuring regulatory compliance and
understanding of reciprocal infrastructure and systems of both RAM and DHL
and the needs of the principal customers was integral to readiness before the “go-
live” date. Bode was concerned that the Netcare business be retained. He
testified on a need to “...have a project person on RAM’s side working hand in
hand with DHL on the project (and not the sales guy as he will say yes to
everything without thinking it through).”
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[15] Bode assembled a project plan and motivated for the appointment of a
project manager to oversee the milestones and implementation of the project.
DHL appointed Daniel du Plessis (du Plessis) as the DHL Project Manager to
manage the transition process. Bode was concerned about the readiness to “go
live” on 1 February 2018. As result, DHL took a decision to postpone the “go-
live” date following internal discussions. The consequence was that the
termination of Seabournes’ contract had to be extended for a period while DHL
and RAM worked on completing the milestones for the implementation of the
project. The transition date was moved to 1 April 2018.
[16] On the 20th of December 2017, Van der Merwe wrote to several role
players in DHL including Bode, Smith and Craven about the decision to “change
vendors.” The email included Ravil Raman (Raman), Kevin Makkie (Makkie)
whose role in the project was at that stage was not yet clear, and stated:
“Dear Business partner
DHL Supply Chain has taken the decision to move from its current 3rd party vendor to RAM. This change will
be effective in Q2 2018. This change was not taken lightly and is as result of a rigorous RFQ process.
RAM has placed a very compelling service offering on the table and DHL is looking forward to working with
them in the future.
There will be a dedicated project team compromising all the DHL stakeholders in place as of January 2018 and
the timelines will be made available to all as soon as the project kicks off in January 2018.
DHL Regulatory has already been in contact with your responsible Pharmacists to align on the technical
agreements and to obtain sign-off.
From a business perspective please advise by return email that you are comfortable with the move so I can note
on our side.
Rest assured that all the regulatory and operational checks and balances will be in place and signed off with a SLA
in place before go live…..”
[17] Although Netcare, as the principal was informed of the nomination of
RAM by Smith on 30 November 2017, the change in vendor received the
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attention of Ms Anita Hamilton (Hamilton), who wrote to Van der Merwe as
follows:
“Dear Margareutte
One of the challenges we have experienced with Seabourne was their cold chain management
— despite the SLA in place. I trust that RAM offers an accredited and approved cold chain
management well reviewed for competence. Your 3rd Party provider to outlying areas has often
been responsible for KPI's not reached and therefore your SLA should be watertight with
measurement tools and recourse for failure.
Please confirm same, and please share that with ourselves .”
[18] DHL together with representatives from RAM went on a roadshow to Cape
Town where they met with Netcare’s key representatives. Bode conceded that, in
a presentation to Netcare, he had referred to several reasons why DHL chose
RAM. DHL’s principals had to approve of any change in service provider. Such
approval was not yet in place on 30 November 2017.
[19] Mkele’s evidence confirmed the need to customize RAM and DHL
Standard Operating Procedures (SOP), and to reach agreement and document
these procedures. On the other hand, Hayward’s evidence emphasised the
integrity of the storage, handling and conveyance of the pharmaceutical product
prior to utilization of a supplier, which was subject to an audit review. Part of
this included the winter and summer Qualification of RAM’s vehicles. Although
RAM was nominated and several meetings held between the parties, a Pre-
Approval Supplier Audit Review Report was outstanding. Hayward was
responsible for completing the Audit Review. She emailed the “Pre-Approval
Supplier Audit Report Version 2”, dated 5 March 2018, to Mkele on 6 March
2018. It conveyed “two critical findings” requiring attention. Although RAM
distributed pharmaceutical products, DHL’s principals (in particular Netcare)
appeared to have had additional requirements which differed from RAM’s service
offering.
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[20] For example, Mkele agreed with the finding that the line haul was not
temperature monitored and had not been mapped. A solution was required before
products at ambient temperatures were to be transported by line haul. It was not
disputed that not all of RAM’s vehicles were temperature controlled to ensure the
integrity of the product, but there was disagreement on whether this was a critical
finding. Its common cause that RAM later purchased a fleet of 52 vehicles for
approximately R18m.
[21] Mkele and Hayward agreed that a Technical or Quality agreement was
necessary and had to be signed off by the responsible pharmacist prior to “go
live” date. Mkele’s evidence was that since there was no such agreement, same
had to be constructed, and the parties had been working through the technical and
quality requirements from January 2018.
[22] Between January and March 2018, the parties monitored the completion of
the project milestones using an “implementation tracker report” which was
updated by different work streams as the project developed. The conclusion of a
Master Logistics Agreement (MLA) and Service Level Agreement (SLA) with
Draft agreements targeted for completion early February 2018 was amongst the
outstanding items. As of 1 March 2018, the SLA and related agreement
agreements had not been finalised.
[23] On 6 March 2018, RAM’s Group General Counsel, Mr Alan Da Costa (Da
Costa) entered the project implementation discussions. He circulated the draft
Interpretation Schedule Master Logistics Agreement (MLA), the Service Level
Agreement (SLA) on 8 March 2018 to DHL’s legal counsel, Ms Lisa Cronwright
(Cronwright) and copied Hayward, Van Der Merwe, Lazarus, Kassim, and Mkele
amongst others.
[24] On 13 March 2018, Da Costa raised several points of contention under
various heads of discussion, about (a) Timing and Rollout, (b) Rates, (c)
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Technical, (d) Full Liability / Insurance, (e) integration and IT, (f) Linehaul, (g)
Local Fleet and (h), Pallets.
[25] Despite the above outstanding issues, the “go-live” scheduled for 1 April
2018 was brought forward because Seabourne refused further extensions and
gave a notice terminating its services with DHL earlier than expected. Svoboda
testified that DHL called on RAM to commence the services from 26th March
2018, earlier than the scheduled “go-live” date. Svoboda testified that DHL had
anticipated that the necessary agreements would be reached before “go- live”
date.
[26] On 13 March 2018, simultaneously with draft agreements sent to DHL, Da
Costa advised DHL that:
“Should the agreements not be signed before start date, the fall back would be that we would
carry the goods on our standard terms and conditions which are available on our website.”
[27] On 16 March 2018, he wrote to DHL stating:
“We understand that you may have to bring us on board sooner rather than later as we are
advised that you service provider is already moving out.
…….
We understand the materiality of the Contract with a number of large principals and in order to
ensure that we do not drop the ball, we urgently need to conclude all the legal and other
documentation and SOP's and are working closely with your team to ensure timeous rollout.”
[28] He reaffirmed earlier emails that should RAM commence work before the
signing of the MSA and the SLA, then “all shipments will be collected and
delivered in accordance with RAM's standard terms and conditions, a copy of
which is available on RAM's website.” Da Costa was aware that the “test/overlap
week” would need to be accelerated to the week of 19 March 2018. I understand
this allows for a period of a hand over from Seabourne to RAM. On 20 March
2018, Da Costa informed DHL that RAM would not commence with the
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distribution services until “the legals are sorted.” He repeated this stance on 22
March 2018.
[29] Svoboda’s evidence was that DHL reluctantly signed RAM’s credit
application with the standard terms and conditions, even though the nature of the
service was not a standard courier service, until the proper contract was agreed.
The rates for the service were not the standard RAM rates that would be available
in the market. They were the rates as per what was tendered in October [sic]
September 2017. He had assumed that the rates tendered for would be applied.
Walker had testified that the rates were not discussed again after the last proposal.
It was a compromise, as RAM would not be taking any liability under those terms.
[30] According to Hayward DHL had no contractual basis to compel RAM to
comply with the quality and the material regulatory requirements of DHL's
clients. When questioned about allowing RAM to commence distributing the
products under those circumstances, Hayward testified that:
“We had SOB, standard operating procedures in place. There was excessive training. We did a
change control which is a GWP document on our side at DHL to ensure that we look at all the
different aspects and do a risk assessment and address the risks, but always understanding and
even on that change control document, that a quality agreement needed to be agreed upon
between the two entities. What we were doing, we were operating on risk and we were
mitigating it.”
[31] After RAM commenced the services, several iterations of the draft MLA,
an SLA, an Interpretation Schedule, and a Quality Agreement were exchanged
between March 2018 to July 2018. It is common cause that as late as June 2018,
several contentious issues which had arisen had not been resolved. It is not
necessary to chronicle all of them. Indicative areas will suffice. One related to the
liability insurance for Goods in Transit (GIT) reflected in the statement as part of
the tender. However, this issue was resolved in an interim arrangement during
contract negotiations.
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[32] Svoboda’s evidence was that after an analysis, DHL found there was a
“mismatch between how the service types were being applied by RAM versus
what they tendered,” prompting discussions which were escalated to Lazarus.
RAM could not effect Next Business Day Deliveries (NBD) to distant centres by
road but could only do so by air. RAM had tendered to deliver by road. This
affected pricing. RAM indicated that it would not assume liability or warrant
that RAM would comply with DHL’s MMC obligations, which remained a point
of some contention between the parties.
[33] Da Costa revised the initial period of the draft Service Level Agreement to
be for 30 months as opposed to 3 years. However, he stated to DHL that RAM
could not agree to termination on a month's notice by a party without cause. This
also featured in the revised draft Master Logistics Agreement, where Da Costa
also appeared to delete DHL’s comment in respect of the termination clause.
[34] Zanoodene Kassim (Kassim) who was employed as Legal Counsel for Sub-
Saharan Africa DHL Supply Chain (South Africa) (Pty) reported to Cronwright
and was involved in what she referred to as protracted negotiations of the contract.
There were at least seven iterations of draft agreements circulated between the
parties between March 2018 to July 2018, all of which were not brought to
finality.
[35] DHL sought to bring an end to the negotiations with RAM and to stop
using RAM for the rendering of the services. On 29 August 2018, DHL sent a
letter of a "Notice of Termination of Services" to RAM. Da Costa’s stance in reply
to the notice of termination was that, since the receipt of the LOI, RAM and DHL
had agreed all material terms of the contract and had concluded a partly written,
and partly oral agreement. RAM would therefore not accept the Termination
Notice.
Before the Trial Court
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[36] The action came before Manoim J, sitting as the Commercial Court (trial
court) who determined the dispute concerning the existence of the contract on the
terms alleged separately from quantum.
[37] RAM alleged that it had:
i. an exclusive contract to render the distribution services for the duration of 24 months,
which contract could only be terminated for material breach (for cause), which contract
came into force on 30 November 2017, commencing on 1 February 2016 which date
was subsequently amended to 26 March 2018.
ii. The express, or implied or tacit terms of the contract were embodied in the (a)
Statement, (b) Case Study and (c) Rates Card submitted as its last offer to DHL in
response to the RFQ and subsequent conduct of the parties evidenced that there was a
binding enforceable contract.
iii. From 26 March 2018 RAM rendered the distribution services for the pharmaceutical
products until DHL gave it a notice of an intention to terminate the distribution service
on 31 August 2018 with effect from 30 September 2018.
iv. DHL repudiated the contract and as a result, RAM suffered a loss of profit in the sum
of R36 003 703.00.
v. It also pleaded in the alternative that the reference to the “initial period of 24 months”,
“final award” and the conclusion of a contract in the letter of nomination did not
constitute a suspensive condition and if the court found it was, then the parties tacitly
alternatively, by their conduct amended the condition by deleting the suspensive
condition, alternatively waived it, alternatively waived its fulfilment.
vi. As a further alternative, it alleged a representation by the defendants’ representatives
who led RAM it to believe DHL believed the terms of the agreement and this bound
the defendants through the doctrine of quasi- mutual assent.
[38] After a trial of long duration in which thirteen witnesses were called, the
trial court dismissed RAM’s action with costs. It considered the RFQ, RAM’s last
offer, the LOI and the language employed in the documents. It found that
textually, the LOI expressed itself in aspirational terms rather than those
consonant with a binding contract. The Statement forming part of RAM’s last
offer was not drafted in imperative contractual terms but comprised criteria for
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the qualification of RAM as tenderer. Nevertheless, it concluded that the LOI was
“sufficiently ambiguous for the context to tilt interpretation.”
[39] The trial court found that the evidence of the context, the subsequent events
and the conduct of the parties for the earlier period (in this I read conduct leading
to the nomination), the rendering of the distribution services from 26 March 2018
and the failure by DHL to call key witnesses suggested the context supported
RAM’s interpretation, noting that:
“RAM, as I noted at the outset, needed to get around the 'final sentence problem'. It relied on
the context to do so. On 30 November 2017 that contextual history must be construed in its
favour-that RAM had been appointed on two-year contract and whatever final contract was
concluded was a matter of finer detail.”
[40] However the latter period, (in this I read to mean conduct post the
nomination and after March), the conduct and context was “messy” and not
“static.” It tilted the scales against RAM’s interpretation because RAM’s conduct
suggested that the parties had decided their future relationship depended on a final
agreement. Mr da Costa’s conduct and evidence appears central to this finding.
[41] It dismissed the alternative claims based on quasi mutual assent and or
waiver, because “the factual matrix for their support was based on the same
principal argument on which RAM relied. First, there is no direct evidence of this
apparent mutual decision. Second, the notion of a suggestion cannot be elevated
to one of probability. The fact that RAM initiated the process of the final contract
is irrelevant.” Having dismissed that argument, RAM’s alternative claims
followed a similar fate. Aggrieved by the dismissal, RAM appealed to this Court
and the appeal is with the leave of the trial court.
On Appeal
[42] RAM’s case is premised on the trial court’s failure to apply the principles
CGEE Alsthom Equipments et Enterprise Electriques, South African Division v
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GKN Sankey (Pty) Ltd1 (Alsthom) in evaluating the facts and the conduct of the
parties. In Alsthom the court held that:
“Whether in a particular case the initial agreement acquires contractual force or not, depends
upon the intention of the parties, which is to be gathered from their conduct, the terms of the
agreement and the surrounding circumstances."
[43] It contends, based on Alsthom, that the determinative events were those
leading up to the 30 November 2017, being the date when the LOI was issued and
a binding contract concluded with DHL. The covering email to the Statement, the
Statement, the Populated Case Study read together with the LOI constitute a
binding contract. The essence of this submission is that as of 30 November 2017,
the essentialia of the contract were agreed. The services to be rendered, the rates,
the initial period and the commencement date were known. The fact that there
were outstanding issues to be resolved was immaterial and not determinative of
whether an unconditional contract came into force. Witnesses who had
knowledge of the facts leading up to the issuance of the LOI were Van de Merwe
and, later Smith. An adverse inference should have been drawn for DHL’s failure
to call them.
[44] RAM also relies on events after the LOI and contends that from December
2017, steps were taken to implement the contract, and this included the
termination of the services of the existing distributor, Seabourne. It claims that
such termination was designed to coincide with the “go-live” date of 1 February
2018, as contemplated in the LOI. It further contends that from 26 March 2018,
RAM rendered services for the distribution of pharmaceutical products on behalf
of DHL, which is consistent with an unconditional agreement having come into
force. The parties’ mutual conduct pointed to unambiguous steps taken to
implement the contract.
1 1987(1) SA 81 at 92 A-E
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[45] Part of the complaint is that the trial court over emphasized, in its the
interpretative exercise, the wording in the RFQ and the LOI and placed
insufficient weight on steps taken to implement the contract when determining
the intention of the parties.
[46] RAM argued that, if the court finds that its nomination was conditional
upon the conclusion of a contract, DHL had waived the condition, alternatively,
that the parties proceeded by quasi- mutual consent. Although that view was
dismissed by the trial court, it remained alive for determination on appeal.
Discussion
[47] As the court in Command Protection Services (Gauteng) t/a Maxi Security
v SA Post Office Ltd2 (Command Protection Services) observed, “disputes of this
nature are not novel in complex transactions where parties reach agreement by
tender (offer) and acceptance while there are clearly some outstanding issues that
require further negotiation and agreement.” The court points to two possibilities,
one being that the acceptance of the offer does not create an animus contrahendi
if it is conditional on further negotiations of outstanding issues. The other
possibility is the principle in Alsthom, that parties intended the offer and
acceptance to give rise to a binding contract and for the outstanding issues to be
left for later negotiation. RAM’s case is based on the latter proposition in Alsthom.
[48] Although the word “nominates” is capable of a variety of meanings
depending upon the context in which it is used,3 both parties accepted that
“nominate” meant “appoint.” DHL’s case in opposition is that RAM’s nomination
as a preferred service provider was no more than an agreement or an invitation to
negotiate a contract.
2 2013(2) SA 133 SCA at para 12
3 Michael v Caroline's Frozen Yoghurt Parlour (Pty) Ltd 1999 (1) SA 624 (W) at 634J to 635B
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[49] RAM submits that the court must determine whether there was animus
contrahendi. If the principle in Alsthom is applied in conjunction with the
approach by the Constitutional Court in Univ ersity of Johannesburg v Auckland
Park Theological Seminary and Another (Auckland Park)4, the only relevant
considerations are those leading up to the LOI, hence the complaint about the
failure to call Van der Merwe and Smith. In its heads of argument it contends that
“the most satisfactory analysis in disputed cases of this nature is to isolate the
offer and ascertain whether the evidence shows that the offeree knew, or ought to
have known, that it was intended to be accepted on a provisional basis only, and
that the conclusion of a binding contract was to be dependent on agreement on
further points.”5 It found support in the decision in Pitout v North Cape Livestock
Co-op Ltd6 ( Pitout)- also referred to in Alsthom Equipments. In Pitout the court
held:
“The question which arises, accordingly, is whether the undertaking, given as it was during the
course of uncompleted negotiations, had, or has been shown to have had, contractual force.
Was the undertaking an offer made, animo contrahendi , which upon acceptance would give
rise to an enforceable contract, or was it merely a proposal made by the appellant while the
parties were in the process of negotiating and were feeling their way towards a more precise
and comprehensive agreement? This is essentially a question to be decided upon the facts of
the particular case”
[50] Although the trial court found that DHL expressed its acceptance of RAM’s
last proposal in aspirational terms using phrases like it “intends to partner”, it
“would like to contract,” however, what distinguishes an offer to contract from
any other proposal or statement is the express, or tacit intention to be legally
bound by the offeree's acceptance.7 As DHL contends, the LOI appointing RAM
as a preferred supplier was “conditional” upon the conclusion of the RFQ
4 2021 (6) SA 1 (CC)
5 Although not cited, in RAM’s heads, the approach is to be found in Christie Law of Contract 4th Edition page
39.
6 1977 (4) SA 842 (A)
7 R H Christie, Law of Contract 4th Ed, page 33
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contract, evident from its terms. The conclusion of a final binding contract was
not a suspensive condition susceptible to waiver. There was thus no binding
agreement with RAM on the terms alleged.
[51] The RFQ states in relevant part that:
“This RFQ does not commit DP DHL GROUP or any official of it to any specific course of
action. The issuance of this RFQ does not bind DP DHL GROUP or any official of it to accept
any proposal, in whole or in part, whether it includes the lowest bid, nor does it bind any official
of DP DHL GROUP to provide any explanation or reason for its decision to accept or reject
any proposal. Moreover, while it is the intention of DP DHL GROUP to enter contract
negotiations with the selected Supplier, the fact that DP DHL GROUP has given acceptance to
a Supplier does not bind it or any official of it to purchase any product or service from such a
Supplier.”
[52] The letter of intent states:
LETTER OF INTENT FOR PROVISIONING OF LIFE SCIENCES AND HEALTHCARE
PRODUCT DISTRIBUTION SERVICES TO DHL SUPPLY CHAIN S.A .
Dear Graeme
It is our pleasure to inform you that DHL Supply Chain S.A. has nominated RAM Hand To
Hand Couriers to be its preferred service provider and with whom DHL Supply Chain S.A.
intends to partner with for the provisioning of their required Life Science and Healthcare
Product Distribution Services.
This nomination is based on the requirements as stipulated in the RFQ and as per RAM's last
proposal.
It is to this end that DHL Supply Chain S.A. would like to contract with RAM Hand To Hand
Couriers for an initial period of 24 months effective 012 (sic) February 2018.
DHL Supply Chain S.A. would like this letter of intent to serve as a means to an end for the
preparations necessary for the implementation of these services with the targeted effective date
being no later than 26 January 2018.
The final award shall be subject to the successful conclusion of the contract accordingly.”
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[53] Lazarus who confirmed the acceptance of the award the same day, wrote:
“Hi John
Many thanks for the award and please be rest assured that we ensure our partnership and
execution of this contract makes DHL stronger within the healthcare field.
We need to urgently please sure that we have the correct working teams to execute this
integration to ensure we are ready to start date.”
[54] RAM’s construction of DHL’s LOI is that of a “firm offer” to RAM. It says
the enforceable unconditional contract came about, upon Lazarus’s email,
accepting the ‘award.’ The first difficulty is that this construction subverts the
RFQ process followed, conflates the issues and is applied in a manner that is
inconsistent with the common cause facts, the evidence and the pleadings.
[55] The correct position is that the RFQ, issued by DHL was an invitation to
RAM to make “a proposal” for the distribution services. In procurement parlance,
DHL invited RAM to tender (make an offer) for the distribution services. RAM
accepted at the trial that it made a “final bid” by submitting its “Last Proposal”
on 11 September 2017 in response to the RFQ, an invitation to make an offer for
the services. RAM’s last proposal was the “firm offer” to DHL open to rejection
or acceptance according to the RFQ terms and conditions. RAM was the “offeror”
and DHL “offeree” and not the other way round.
[56] The second difficulty is that RAM seeks to overcome what was referred to
by the trial court as “the last sentence problem” in the LOI. It asks of the Court
to isolate the offer and to instead look to events leading to its nomination as a
preferred supplier on the strength of the Constitutional Court’s decision in
Auckland Park,8
[57] If adopted, RAM’s approach would avoid the debate about two important
rules; namely (a) the parole evidence rule, and (b) the express language of the
8 2021 (6) 1 (CC) para 66
19
RFQ and the LOI stipulating the terms on which RAM participated and accepted
the nomination by DHL. In the face of the express language of the RFQ and the
LOI, evidence of events leading to the LOI would be inadmissible evidence and
would be hit by the parole evidence rule. It would avoid the evidence from RAM’s
witness, Walker, who testified that he understood that the covering email to the
Statement, the Statement, the last proposal, the LOI and the “acceptance” of the
nomination on which RAM relies did not give rise to an agreement as contended
for. Walker was best placed to give the evidence as he was directly involved in
the process with Craven.
[58] Considering the express language of the RFQ and the LOI, the LOI is
explicit and clear that: “The final award shall be subject to the successful
conclusion of the contract accordingly.” RAM’s acceptance of the terms of the
RFQ, its firm offer in its last proposal, read with the LOI does not admit any doubt
that, a final award would come into effect on conclusion of a contract. In these
circumstances, Pitout and Auckland Park do not aid RAM’s case. As the court in
Capitec Bank Holdings Ltd and Another v Coral Lagoon Investments 194(Pty)
Ltd and Others9 clarified, Auckland Park did not jettison the need to have regard
to the express language used by the parties above context. The facts in Pitout are
distinguishable from the current facts because there, the court was seized with an
undertaking that was not memorialised in writing.
[59] The language employed in the RFQ inviting RAM to quote on the
distribution services, and the language employed in the LOI, accepting the
proposal to render the distribution services, remain the point of departure that the
court must consider to discern the intention of the parties. The LOI served to
elect RAM as a party with whom DHL wished to negotiate and conclude a
9 2022 (1) SA 100 (SCA), at para [51] states that: “Most contracts, and particularly commercial contracts, are
constructed with a design in mind, and their architects choose words and concepts to give effect to that design.
For this reason, interpretation begins with the text and its structure. They have a gravitational pull that is important.
The proposition that context is everything is not a licence to contend for meanings unmoored in the text and its
structure. Rather, context and purpose may be used to elucidate the text.”
20
binding service contract. Viewed in this light, the pre-nomination meetings and
site visit held from 12 September and 30 November 2017 were no more than part
of an initial investigation to determine whether RAM was suitable for
appointment and as a party with whom to negotiate a future contract. As the trial
evidence shows, the intention to conclude the contract (referred to in the LOI),
formed part of the project milestones, monitored through the project
implementation trackers circulated in December, January and February and
March.
[60] Dealing with a tender, the Court in Premier of the Free State Provincial
Government and others v Firechem Free State (Pty) Ltd10 citing Christie11 held
that:
“An agreement that the parties will negotiate to conclude another agreement is not
enforceable, because of the absolute discretion vested in the parties to agree or disagree ”
The finding that there was no enforceable agreement should be dispositive of
RAM’s case, but for the contention that the conclusion of a contract was a
suspensive condition which DHL waived. The averment about the existence of a
condition presupposes that upon DHL’s acceptance of RAM’s last proposal (the
true offer), a binding contract operational ab initio came into effect. As I have
already found, the LOI merely appointed RAM as a party with whom it sought to
negotiate a contract.
[61] Similarly, the argument that the Court should import an implied or tacit
terms on the strength of the decision in Desai v Greyridge Investments (Pty) Ltd
10 [2000] JOL 6603 (A) para 35
11 “The Law of Contract in SA 3ed 152 states that it is somewhat of a solecism to describe as a conditional
contract one in which the condition is purely potestative (the si volam of Roman law), as such a provision is
destructive of any enforceable agreement. Nor does it matter if the provision is cast as a term: Christie (op cit)
109. The result is the same. Accordingly, if the provision is potestative it does not matter for present purposes
whether it is classified as a condition or a term. In either case enforcement is dependent upon the will of both
parties, in this case particularly the will of the province.”
21
(Desai12) is equally misplaced. An existence of a contract is a prerequisite for
determining whether there is room to import an implied or tacit term.13
[62] If anything, the trial evidence concerning disputes about (a) the applicable
rates (b) the routes and mode of delivery (c) the duration, (d) termination and (e)
the exclusivity serves to confirm that the documents on which RAM relies did
not constitute a binding and enforceable contract and lacked the material terms
which enabled the parties to know their rights or performance obligations.
[63] To the extent that there were other agreements which had not been
concluded, the decision by the court in Kenilworth Palace Investments (Pty) Ltd
v Ingala14(Kenilworth) has some relevance and supports the conclusion that
documents relied on by RAM could not have acquired contractual force. The
evidence demonstrates that the conclusion of the Technical or Quality
Agreements incorporating compliance requirements and Key Performance
Indicators (KPI’s) which would apply to multiple principals, were central to the
Master Logistics Agreement (the MLA) and a Service Level Agreement (SLA)
and the nature of the services required. DHL and RAM spent several months
negotiating the terms, resulting in at least six iterations of the MLA and SLA
agreements and failed to agree or display common intention about the terms.15
[64] RAM’s reliance on the doctrine of quasi-mutual assent was correctly
dismissed by the trial court. RAM would have been required to show that there
was a misrepresentation, identify the person who made it, in addition to showing
that it was reasonably misled and that a reasonable person who have been so
12 Desai v Greyridge Investments (Pty) Ltd 1974 (1) SA 509 (A) at 522-3; See Consol Ltd v Twee Jonge Gezellen
(Ply) Ltd 2005 (6) SA 1
13 Alfred McAlpine & Son (Pty) Lid v Transvaal Provincial Administration 1974 (3) SA 506 (A)
14 1984(2) SA (C) 1, at para H page 12
15 Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A)
22
misled.16 The reliance on quasi mutual assent disregards the evidence of Walker
(the sale executive) and Da Costa (the General Legal Counsel). The inescapable
evidence is that RAM was aware that the documents relied on lacked contractual
force and when it commenced the distribution services on 26 March 2018, Da
Costa made it clear that it would do so under RAM’s standard terms until a
binding contract is concluded.
Conclusion
[65] For the reasons stated above, RAM’s claim must fail, and the appeal
dismissed.
[66] What remains is the question of costs. On 11 February 2025, I directed the
parties to prepare a Core Bundle to assist the Appeal Court, given the voluminous
trial record running to forty two volumes. The Appeal record was already
uploaded and available on Case Lines. Instead, the full record was delivered
despite the limited request. At the hearing the parties were requested to make
written submissions on who should bear the costs of the unnecessary additional
record. I have considered and accepted the representations by RAM’s attorneys.
[67] The costs of the appeal which include the costs of the preparation of the
record must follow the result.
Accordingly, I make the following order:
a. The appeal is dismissed with costs.
b. The costs shall include those consequent upon the employment of two counsel.
16 Sonap Petroleum (SA) (Pty) Ltd (formerly known as Sonarep (SA) (Pty) Ltd) v
Pappadogianis 1992 (3) SA 234 (A) at 239J–240A.