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[2002] ZASCA 25
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Africa Solar (Pty) Ltd v Divwatt (Pty) Ltd (365/2000) [2002] ZASCA 25; [2002] 3 All SA 369 (A); 2002 (4) SA 681 (SCA) (28 March 2002)

IN THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Case number : 365/2000
In
the matter between :
AFRICA
SOLAR (PTY) LTD
APPELLANT
and
DIVWATT
(PTY) LTD
RESPONDENT
CORAM
: NIENABER,
OLIVIER, STREICHER, FARLAM and NUGENT JJA
HEARD
: 25 FEBRUARY 2002
DELIVERED
: 28 MARCH 2002
Summary:
terms of agreement - whether the seller’s standard terms
incorporated into the agreement for the supply of goods to
the buyer
- alleged defective performance - remedies - non-compliance with the
Rules of the Supreme Court of Appeal regarding the
curtailment of the
record and the preparation of a core bundle - non-compliance with
practice note requirements - sanctions.
____________________________________________________________
JUDGMENT
____________________________________________________________
NIENABER JA
/
NIENABER JA
:
[1] The appellant is the manufacturer of, amongst other things, H70
model photovoltaic modules (also referred to as panels) that
are
employed in the conversion of solar energy into electricity. The
respondent purchased a large quantity of these modules
from the
plaintiff on the strength of the appellant’s specifications as to
their performance. It used them, amongst other
things, in supplying
and installing water pumps for various of its customers in some of
the more outlying parts of the country
where conventional electrical
power was either not available or too costly. The appellant sued
the respondent in the Transvaal
Provincial Division for payment of
the balance of the purchase price
viz
R89 653.51 plus
interest and costs. (I shall henceforth refer to the appellant as
the plaintiff and to the respondent as the
defendant.) The
defendant withheld payment of the balance due because of an ongoing
dispute that developed (and gathered momentum)
between the parties
about the performance of at least some of the panels. The defendant
received diverse complaints from various
of its customers that their
pumps failed to supply the rate of water which the defendant had
promised them on the strength of
the quoted specifications. The
defendant alleged but the plaintiff denied that its panels were
underpowered. The defendant
did not, however, cancel the executed
orders placed with the plaintiff. Instead it sought to boost the
performance of the pumps
by adding additional panels. When the
plaintiff persisted in its refusal to acknowledge the problem or to
recall or repair
the offending panels the defendant arbitrarily
withheld half of the payment then due in order, so it was explained,
to bring
matters to a head. The broad issue between the parties in
these proceedings is whether the panels were indeed defective. The

narrow issue is whether the defendant was precluded by the terms of
the agreement between them from withholding payment and from

pursuing a counterclaim for damages based on its alleged breach.
That narrow issue is largely dependent on whether the plaintiff’s

standard conditions of trade (to which I shall refer simply as the
standard terms) were incorporated into the agreement for the
supply
of the panels by the plaintiff to the defendant.
[2] Both parties were initially anxious to avoid litigation and
their respective technical directors, De Villiers on the defendant’s

side and Dr Venter on the plaintiff’s side, agreed to submit
samples of the allegedly underperforming panels to Prof Leitch,
an
expert from the University of Port Elizabeth, to conduct tests as to
whether the panels conformed to the agreed specifications.
It
remained an issue between the parties whether it was also agreed
that the issue of the defendant’s liability would be made

dependent on the outcome of those tests. The tests conducted by
Prof Leitch favoured the defendant. The defendant accordingly

raised a special plea (to which the plaintiff replicated a denial)
that the action had been duly compromised.
[3] The pleadings in their final form revealed a multiplicity of
sub-issues, mostly factual, that may conveniently be summarised
as
follows:
a) whether the action was compromised, as the defendant alleged;
b) if not, the terms, express and tacit, of the agreement of sale
between the parties and in particular whether, as the plaintiff

alleged, the plaintiff’s standard terms governed the sale;
c) whether a meaningful proportion of the panels supplied by the
plaintiff to the defendant failed to measure up to the written

specifications;
d) depending on issues b) and c), whether the defendant was
precluded (i) from withholding payment of the balance of the price

otherwise owing in terms of the agreement, and (ii) from advancing
a counterclaim for the losses it alleged it suffered.
[4] Not all of these issues were adjudicated by the trial Court
(Jansen AJ). That is because the parties requested the Court,
and
the Court agreed in terms of Rule 33(4) of the Uniform Rules of
Court, to grant precedence to some of the issues before disposing
of
the remaining ones. The first major issue was whether the action
had been compromised. The trial Court found against the
defendant
that it had not been compromised. Since the defendant has accepted
that finding no more need be said about it. The
second issue, the
crucial one, related to the terms of the agreement and more
particularly whether the plaintiff’s standard
terms are of
application. The third issue was formulated, somewhat elusively, as
follows:
‘1.3 the implication of the terms of the agreement between the
parties in particular:
(a) Whether the defendant is precluded from raising a defence of
non-payment due to an alleged defect in some of the solar panels;

and
(b) whether
the defendant is precluded by such terms from claiming damages in
the nature set out in defendant’s counterclaim.’
This was interpreted by the parties to pose the question, assuming
the alleged defects in the solar panels to have been established,

whether the defendant was entitled to rely on the
exceptio non
adimpleti contractus
, regardless of whether or not the standard
terms applied. It was accepted that if the standard terms did apply
they would dispose
of the defendant’s counterclaim.
[5] What was accordingly
excluded
from consideration at the
preliminary stage of the trial was, first, a decision on the
defendant’s complaint that some of the
panels were defective and
secondly, following upon it, the quantum of the counterclaim.
[6] The
trial Court found against the defendant, as stated earlier, on the
compromise but essentially in its favour on the remaining
issues.
On the second issue posed it was held that the plaintiff was
represented by Mr Mac Micciarelli, Mr Joe Micciarelli and
Mr Paolo
Chiaccetti when the agreement between the parties was concluded (i e
at the prior meeting between their respective representatives)
and
that the terms of the sale were as contended by the defendant, more
particularly, that the ‘express alternatively tacit
or implied
terms’ were:
‘3.1 The panels would be used in conjunction with water pumps but
these would not form part of the sale and would be fitted
by the
Defendant or its agent(s);
3.2 Defendant would be granted 30 days credit from date of statement
rendered by Plaintiff;
3.3 The panels would function in accordance with the those given as
samples as stated above and to those parameters and standards
laid
down in the Plaintiff’s specifications annexed marked DW 2 in
respect of the H70 modules and DW2a in respect of the H
55 modules
sold which formed the written portion of the agreement.’
Further express terms found were:
‘3.4 The guarantee as set out in paragraph 3.3 would endure for
ten years.
3.5 The price for the H70 solar panels was R1 133,00 and for the H55
R910,00.
3.6 The first order which would be placed would be for 500 H70 solar
panels and 100 H55 solar panels.’
On issue
1.3 it was held as follows:
‘The
implications of the terms of the agreement between the parties are:
(a) The Defendant may raise a defence of non-payment due to an
alleged defect in some of the solar panels in terms of the
exceptio
non adimpleti contractus
.
(b) The Defendant may claim damages in the nature set out in the
Defendant’s counterclaim based on a contractual cause of action.
(c) No interest is payable on the payments which have been withheld
until such time as the Plaintiff has performed its obligations
in
terms of the agreement.’
In the
result the trial Court held that the plaintiff’s standard terms
did not apply to the agreement between them.
[7] With
the leave of the trial Court the plaintiff appealed first to the
Full Bench of the Transvaal Provincial Division and,
when that
appeal failed on a majority decision, it noted a further appeal,
with special leave, to this Court.
[8] The major issue between the parties at this stage of the
proceedings is whether the standard terms applied to the sale.
That
dispute arose in the following circumstances. During August 1993 a
meeting took place between representatives of the two
parties. I
shall refer to it as ‘the prior meeting’. The defendant’s
representatives expressed interest in the H70 module
which the
plaintiff was then in the process of developing and which it was
prepared to manufacture especially for the defendant.
It was agreed
that the plaintiff would provide five H70 sample panels free of
charge to the defendant which the defendant would
test for
functionality in tandem with water pumps. Shortly before delivery
of the sample panels to the defendant was due to
take place, a Ms
Gerber telephoned Mr Pichulik, the defendant’s financial director.
She introduced herself to him as a bookkeeper
and credit supervisor
in the plaintiff’s employ. Neither of them was present at the
prior meeting. According to Pichulik
she sought certain particulars
from him about the defendant since the defendant was then still a
relatively new concern, (‘a
start-up company’, as Pichulik
described it), about which the plaintiff, before committing five H70
panels valued at close
to R5 000, required at least some
information. It was therefore arranged that she would telefax a
form for him to complete.
According to him she said:
‘I will send you our standard form to please fill in in order to -
from an administrative point of view that you know I’m
cleared of
this.’
and again:
‘… she said she needed this to update her information because of
the unusual situation that we were not paying for those
panels.’
Pichulik testified that a one page document was received by him. It
was headed ‘Application for Credit Facilities’, although
the
defendant had not applied for such facilities and no decision had
yet been taken by the defendant, pending the testing of
the product
in the field, to either apply for credit or to order any panels from
the plaintiff. Pichulik put the document aside
but after some
further prompting from Gerber he completed it in part and faxed it
back. On rereading the document he realised:
‘Obviously I also saw
when I read through this at a later date, that she also obviously
wanted to check us out from a credit
point of view, it was not just
updating records, see who the directors are and things like that.’
He filled in the blank spaces with details about the defendant, its
assets, its directors and management, its bankers and auditors,
but
left open the space for ‘credit amount applied for’ and to the
question: ‘Are directors/owners/ partners/members prepared
to
sign guarantees?’, he inserted: ‘To be negotiated’. He
deleted the spaces below the question ‘Particulars of fixed

property offered as security’. Then followed a paragraph which he
did not delete. It read:
‘All purchases will be
made in terms of and subject to the conditions of trade of Helios
Power (Pty) Ltd, [the then name of
the plaintiff] as printed on the
reverse hereof, which by signing this, I acknowledge having read,
understood and accepted.
I also warrant that I am authorised to
sign this application.’
Pichulik inserted the date and signed it as ‘director’.
[9] Notwithstanding the words ‘as printed on the reverse hereof’
the reverse side of the document, according to Pichulik,
was not
faxed through to him at the time. He was accordingly unaware of the
standard terms when he partially completed, signed
and returned the
page faxed to him; nor indeed when, some time later, an order for a
number of H55 and H70 model panels was
placed on behalf of the
defendant. It is about the reverse side of the document, containing
the plaintiff’s standard terms
quoted later, that the battle
rages. I shall refer to the contentious document faxed to and
completed by him as ‘the document’.
[10] Gerber did not tell Pichulik that the document might be used
for an additional purpose but he inferred, so he said when
asked
about it, that apart from the document serving as ‘an information
sheet’ ‘she obviously wanted to check us out from
a credit point
of view’, should the defendant ever apply for credit (‘just in
case’). But that, according to him, would
have required further
negotiations between the parties and additional information to be
furnished by the defendant. The document,
according to Pichulik,
served a dual purpose: as a data base to obtain information about
the defendant to which the plaintiff
was supplying five panels free
of charge; and, in the long term, as the groundwork for the
processing of an application for
credit should such an application
ever be submitted.
[11] The defendant’s technical personnel, having tested them, were
happy with the performance of the H70 modules and an order
for the
supply of 500 H70 modules (at R1 133 per module) and 100 H55 modules
(at R910 each) was thereupon placed with the plaintiff
on 16 August
1993. This was worth some R600 000, far in excess of the
figure of R200 000 that someone on the plaintiff’s
side had
written on the document. No formal application for credit
facilities was thereafter made by the defendant nor were
the terms
on which the panels were supplied further discussed between the
parties.
[12] During October 1993 the defendant began to receive complaints
from customers that its pumps were under-performing. The
defendant
attributed this to the H70 panels. As Pichulik put it in his
testimony:
‘We
saw that the panels were not producing enough power to keep our
pumps going during very hot daytime temperatures, in a nutshell.’
Pichulik raised the problem with the plaintiff’s people but, so he
said, they insisted that the panels had been thoroughly
tested and
were functioning in accordance with the agreed specifications. On
25 October 1993 Pichulik faxed Dr Venter a letter
confirming that
the plaintiff was:
‘to hold off all
further delivery of panels as of today, until our problem regarding
insufficient voltage on the various sites
already supplied, also any
other problems we may find among the panels we have currently in
stock, have been adequately verified
and then rectified to our
mutual satisfaction.’
[13] During November 1993
Pichulik received, instead of a satisfactory response to his various
complaints, a telephone call from
someone in the plaintiff’s
office demanding immediate payment. He believed it to have been
Gerber but later events showed that
he was mistaken and that it must
have been someone else, perhaps a Mrs Ellis, who was not, however,
called as a witness by the
plaintiff. He testified:
‘… she told me that
according to the terms of the sale that I signed … I was not
allowed to withhold any money, to which
I retorted I cannot remember
signing any terms of sale or - in any way whatsoever, would she
please send these terms that I allegedly
signed to me and she sent
me a fax which basically substantially [was] … the standard
conditions of trade.’
And that, said Pichulik,
was the first time that he ever had sight of the plaintiff’s
standard terms.
[14] The standard terms
read as follows:
‘1. All photovoltaic
modules manufactured or supplied by Helios Power are guaranteed for
a period of 10 years against faulty
materials and/or workmanship.
2. All other products
supplied and installed by Helios Power are guaranteed for a period
of 12 months against faulty materials
and/or workmanship.
3. Helios Power will
replace or repair all faulty equipment at its sole discretion, free
of charge to the owner. The owner is,
however, responsible to pay
for transportation and delivery to the Helios Power factory and back
to the owner after replacement
or repair. The owner is also
responsible for transportation and accommodation costs of
technicians when called out to service
or repair any installation on
site.
4. This warranty will be
null and void if the products have been subjected to misuse,
negligence or accident or if the products
have been struck by
lightning or tampered with in any way.
5. Although all
reasonable care will be taken during manufacturing and installation,
Helios Power does not accept any responsibility
whatsoever, for loss
of the buyer’s profit or for any consequential, direct, indirect
or other injury, damage or death of any
nature and whatever cause.
6. Helios Power also
does not accept any liability for loss of the buyer’s profit or
any other damages caused by late and/or
incorrect delivery of goods.
7. All prices published
or quoted are for cash ex-works, unless specified otherwise in
writing.
8. Transportation and
delivery costs are for the account of the buyer, including any
special packing required for transportation,
unless specified
otherwise in writing.
9. All risks are
transferred to the buyer, as soon as the goods are accepted by the
buyer’s representative or leave the Helios
Power factory building
for transportation to the buyer, whichever occurs first.
10. All credit
applications must be made on the official Helios Power credit
application form. Personal guarantees by directors/
owners/
partners/ members may be required before approval of a credit
application.
11. Approved credit is
up to the specified limit only and for a maximum period of 30 days
after delivery of goods, unless specified
otherwise in writing.
12. Notwithstanding the
approval of credit facilities, Helios Power will be entitled at any
time and in its sole discretion to
withdraw such facility and demand
immediate payment in settlement of any outstanding amount.
13. Interest at the
maximum allowable rate will be charged on all amounts outstanding
for longer than 30 days after delivery of
goods.
14. All goods delivered
remains the property of Helios Power until it has been paid for in
full, including any interest charges.
15. As the manufacturer
and owner of all goods until it has been fully paid for, Helios
Power will have the right to claim the
full benefit awarded through
the General Export Incentive Scheme (GEIS) as instituted by the
South African Department of Trade
and Industry, unless otherwise
agreed to in writing.
16. Helios Power will
have the right to reclaim or remove any material which have been
delivered or installed, if the buyer can
not settle his account
within 90 days after delivery or installation of any goods.
17. All companies,
persons or other institutions which make use of approved credit
facilities awarded by Helios Power are obliged
to advise Helios
Power forthwith, should its business or financial situation,
ownership, management or control change in any
way that would
adversely affect the risk of Helios Power to provide credit.
18. The buyer undertakes
to pay all legal expenses incurred in connection with the recovery
of any outstanding debts, including
all collection charges, as
between attorney and client, which may be payable in respect of the
collection of such an account.
19. …
20. …
21. …’
[15] Pichulik testified
that he was incensed when he was suddenly confronted with a supposed
agreement he had never seen before.
The word he used was
‘horrified’. In his evidence he explained that he did not
believe that Gerber had deliberately set
a trap for him at the time,
but that the plaintiff was now opportunistically taking advantage
(‘by slipping something in …
through the backdoor’) of the
reverse side of a document of which Gerber knew that he was unaware
at the time and which, to
her knowledge (as he believed), was in any
event never intended by either of them to function as a binding
contract.
[16] According to Pichulik
he telephoned the plaintiff on 7 December 1993 and spoke to the lady
he thought was Gerber.
‘I said you know I
never signed this, this is just an empty piece of paper and then she
mentioned that this was the second page
of the credit application.
I said but you only sent me the first one. And in any event you
know, when you sent me the first
one you were updating your records.
I was not contracting with you in any way, definitely not on the
terms of these conditions.
Had I known that they existed I would
have never signed the first page. I mean we are not in the habit of
allowing potential
creditors to you know, impair our common law
rights, I never sign things like that.’
And when he continued to
protest the lady told him that Venter instructed her to make the
call.
[17] And there, according
to Pichulik, the matter rested for the time being until, having
discussed the impasse between the parties
with De Villiers, he wrote
a letter, dated 14 December 1993, stating:
‘Enclosed please find
a cheque for R84 642,15, being 50% of the outstanding amount of R169
284,30.
We have decided to keep
the other 50% owing as retention for the time being, until we have
verified the exact magnitude of an
unacceptable power loss in the
HS70 panels purchased from you to date, and full damages are capable
of being assessed.
We have monitored a
limited number of sites where we have installed HS70 panel arrays.
On all those sites, so far, the power
loss in the panels at cell
temperatures taken at 50°C and above, has been in excess of 13,50%
below the nominal warranted output
power.
For
example
: At our own test installation (a 5 x 70W panel array) at
a cell temperature of 55,30°C the maximum power available was 52,9

Watts per panel (17,64 Volt at 3.0 Amps) and 51,97 Watts per panel
(16.51 Volts at 3.147 Amps) respectively.
This result represents a
loss of 15.45% compared with your own warranted nominal power output
claims.
As a result, our 3 and 4
panels arrays have now to become 4 and 5 panel arrays respectively
if we want to achieve our claimed
water output figures. On our 1
and 2 panel systems, we are considering to either change our claims
or to sell the systems involved
at discount.
We feel, unless it is
otherwise proven, that we have suffered damages due to the dubious
quality of your solar panels.’
The amount he paid, fifty
percent of what was then owing, ‘as retention for the time being’,
was not the result of a mathematical
calculation; it was simply
based on his ‘gut feel’ (a ‘bargaining chip’ as he later
described it.) At that stage the
relationship between the parties
was still comparatively cordial. His purpose was to bring the
dispute to a head or, as he put
it, to bring the plaintiff ‘to the
party’. He had no intention to precipitate litigation but, as he
described it rather
laconically:
‘I thought that would
get some action out of them and well, it did not really, it got
another action out that I did not expect.’
[18] In that action Gerber
was called as a witness for the plaintiff. She had in the meantime
left the plaintiff’s employ and
was then known by her married name
as Mrs De Wet but I shall continue to refer to her as ‘Gerber’.
She had no independent
recollection of ‘the incident’. Nor of
what happened to the form when it was telefaxed back to the
plaintiff, although it
was the practice to place such documents in a
file and it would in the normal course of events have come to the
attention of
the managing director. Asked about Pichulik’s
evidence that the prime reason for the document was the imminent
delivery of
the five sample panels free of charge, she said:
‘Ek sou dink dit kon
gebeur het veral as dit nou die eerste vyf panele is wat hulle dan
basies op goedertrou vat. Hulle betaal
nie daarvoor nie en ons kan
dit darem seker nie net vir enige vreemde maatskappy sê: vat maar
vyf panele sonder ten minste
darem enige inligting van hulle nie.
So ek sal dink dat dit logies was dat ons vir hom gevra het:
voltooi darem net eers die
vorm voordat ons dan nou die panele
(onduidelik).’
And again:
‘Maar u hoof moeite
was om daardie informasie te kry. Met ander woorde die eerste
bladsy was die belangrikste ding wat u aanbetref
het. -- Vir my om
terug te kry en op my lêer te plaas, ja, die voorblad.’
She could not dispute
Pichulik’s evidence that he did not receive the reverse side of
the document, although she emphasized
that it was company policy to
photocopy and then fax both sides of the credit application to a
potential customer. In a sense
this piece of evidence (that only
the obverse side of the document was faxed through to him) fortifies
Pichulik’s version that
this was ‘an unusual administrative
situation’ as he described it and not the usual situation where a
customer would apply
for credit so as to order goods from the
plaintiff. The exchange took place primarily for the specific
purpose of providing
the plaintiff with details of the defendant as
a new concern before the five test panels were released to it - to
establish its
credentials rather than its credit. She further
explained that the amount of R200 000, later inserted into the
‘credit
application’, did not emanate from her. She thought it
may have been Venter’s handwriting.
[19] The trial Court held
that ‘Mr Pichulik’s version regarding the circumstances under
which he received the frontispage
of Annexure A [the document] is
uncontested, as is his version regarding the circumstances
surrounding his receipt of the reverse
side of Annexure A’ and
that his evidence was accordingly to be accepted. In the result the
trial Court found that Pichulik’s
error (in not ‘scoring out the
paragraph immediately before his signature’) was caused by Gerber
both by informing Pichulik
that the document was intended for
information and by sending him only part thereof which was in any
event inappropriately worded
for its stated purpose. That
error
,
so it was held, was material and was not, having regard to all the
circumstances,
injustus.
Hence it was found that the reverse
side of the document did not bind the defendant.
[20] The majority of the
Full Bench (Van der Walt and Roos JJ) in an
ex tempore
judgment dismissed the appeal. It said:
‘ … where a document
specifically states ‘the conditions on the reverse hereof’ you
have the opportunity to read those
conditions. If you choose not to
read them or if the conditions appear above in the document, in the
contract, you are able
to read them, then you are bound. That is
logical. But if the document specifically states as Annexure A does
‘as printed
on the reverse hereof’ and there is no printing on
the reverse, no matter how lame the excuse of the secretary as to
why he
signed or why he did not read the clause the factual position
is there is no printing to which he has subscribed. And lacking

such printing, he may be criticised for not inquiring after the
printing, but he cannot held to be bound by something which he
has
not seen, and that is the simple issue as far as I am concerned.’
(The proposition may have
been too broadly stated if it was intended to relate to third
parties; what the majority probably had
in mind was that this was
not a case relating to a misinformed third party but to an informed
immediate party to the agreement,
a point to which I return in para
31 below.)
[21] The minority
(Southwood J) did not, on the probabilities, accept Pichulik’s
explanation as to why he signed the document
without deleting the
last paragraph above his signature. And to the extent that he
expressly acknowledged having ‘read, understood
and accepted’
the terms on the reverse side thereof, it was not open to him to
shelter behind his failure to do so. Southwood
J was accordingly of
the view that judgment should be granted in favour of the plaintiff
for the full amount claimed.
[22] This
part of the case can therefore be reduced to an issue of
credibility: was the trial Court’s finding correct, firstly,
that
only the frontispage of the document was telefaxed to Pichulik and
secondly, that he volunteered the information to Gerber
at her
request for administrative purposes? It was those credibility
findings that were rejected by Southwood J in the Court
a quo
and that were again contested in argument on behalf of the plaintiff
in this appeal.
[23] Not
all of Pichulik’s evidence reads convincingly. His failure to
delete the certification paragraph before returning
the document to
the plaintiff, a foolish omission for someone priding himself on
being an experienced businessman, was an embarrassment
to him.
Nevertheless I have not been persuaded that the trial Court erred in
believing his explanation that he received only
one page of the
document and that, in the light of Gerber’s explicit request to
him, he attached no importance to the undeleted
last paragraph
thereof. I say so for reasons that follow.
[24] In
contrasting Pichulik’s and Gerber’s versions Pichulik was clear
as to what was said between them and Gerber was not.
Gerber was
unable to recall any telephonic conversation with Pichulik, nor
could she recall whether she telefaxed him the reverse
side of the
contentious document. Indeed she could not remember “any specific
incident”. She was therefore in no position
to dispute Pichulik’s
evidence, except on the broad basis that aspects thereof would have
been against plaintiff’s “normal
practice” at the time and as
such was improbable.
[25] As it
happens there is a fair amount of support in her evidence for much
of Pichulik’s testimony. So, for example, the
initiative for the
completion of the document clearly came from Gerber. The reason for
the request for information was that
the plaintiff was about to
deliver valuable property to a company of which it knew very little.
Gerber conceded as much. On
the issue whether both pages of the
document, the frontispage and its reverse side, were telefaxed to
Pichulik she conceded that
the frontispage was the only part in
which she would have been directly interested at that time, as that
contained the information
about the defendant which the plaintiff
wanted on record. The placing of an order by the defendant was, to
her knowledge, by
no means a foregone conclusion and was dependant
on a decision yet to be taken some time in the future, so that, as a
contract,
the document was of no inevitable or immediate
significance to the parties.
[26] Pichulik,
notwithstanding a prolonged, excessively repetitive and at time
badgering cross-examination to which, stretching
over many days, he
was subjected and which the trial Court perhaps too indulgently
allowed, remained consistent in his version.
Such cross-examination
enhanced rather than detracted from his credibility.
[27] In
contrast to Pichulik’s evidence, Gerber’s was largely based on
speculation as to what she would have done or thought
at the time.
So, for instance, it was put to her during her evidence-in-chief
that the defendant’s version about the document
was that ‘u het
dit maar net nodig vir inligtingsdoeleindes’, to which she
replied:
‘Ek
kan nie dink dat ek vir hom so iets sou gesê het, 'n kredietaansoek
sou gevra het om volledig te voltooi as ek net inligting
wou gehad
het nie. As ek net sy adres of sy telefoonnommer wou gehad het sou
ek hom sommer mondelings gevra het. Dit sou nie
nodig gewees het om
so 'n amptelike dokument … (stem sak)’
Under
cross-examination she was again asked:
‘Hy
het gedink dat jou doel was om net daardie informasie in te win.
Nou is dit korrek of is dit nie korrek nie? Wil u informasie
hê?
-- Dit hang af hoe - ek kan nie dink dat hy dit so kon insien dat
hierdie hele vorm, hy vra spesifieke vrae, vrae soos of
die geboue
en die masjiene deur die maatskappy besit word. Soos wat ek reeds
gesê het, as ek net basiese inligting wou hê
dan wil ek nie sulke
tipe goed weet nie.’
[28] Gerber
did not venture to suggest that she asked Pichulik to complete the
form as a proper application for credit. She could
hardly have done
so as the possibility of a sale, let alone an application for
credit, was at that stage by no means confirmed.
In the absence of
any other explanation for the furnishing of the document, Pichulik’s
evidence, that it was required as an
information sheet for record
purposes, accordingly stands unchallenged. The trial Court accepted
it and no compelling reasons
have in my opinion been advanced why
this Court should depart from that finding.
[29] Gerber
did not concede that she must have known that Pichulik had no
animus
contrahendi
. Once again she could hardly have done so since she
had no recollection of the entire incident. But if she said to him,
as
it must be accepted that she did, that the contentious document
was required by the plaintiff for information purposes because
the
defendant to whom the plaintiff was entrusting valuable goods was an
entity unknown to the plaintiff; and that the reverse
side of the
document was not faxed to the defendant at a time when it was still
undecided whether the defendant would order and
the plaintiff would
supply panels to it, whether on credit or not; it is fair to accept
that a document which was required and
produced at Gerber’s
insistence and to her knowledge for a limited pre-contractual
purpose, was not without further input intended
by either party to
function as a contract between them.
[30] Moreover,
and to the extent that Gerber faxed him a standard form that,
strictly speaking, was inappropriate for her stated
limited purpose,
she was primarily responsible for the potential misunderstanding as
to what Pichulik intended when he signed
and completed it. Because
of what Gerber told him Pichulik was not on his guard, when he
returned the partly completed document,
that he might be committing
himself to a future contractual relationship with the plaintiff.
[31] Gerber’s
knowledge became that of her principal, the plaintiff. She acquired
it while acting within the scope of her official
duties and it was
clearly something that ought to have been conveyed to her superiors,
such as De Villiers and Wolf. On the
evidence there was a lack of
proper communication between them and Gerber. This is not,
therefore, an instance, as in many reported
cases, where a third
party was reputedly misled. The plaintiff was not a third party
vis-à-vis
the defendant: it was a direct and immediate
party.
[32] By the same token the
document could also not be construed as an offer to the plaintiff
which it was open to Wolf, unaware
of the true basis on which the
document was completed and forwarded to the plaintiff, to accept,
either as an application for
credit or as the terms on which panels
were to be supplied in future. In fact, the evidence was that Wolf
was not even aware
of its existence when, on the strength of his own
independent enquiries and without ever informing the defendant, he
approved
and processed credit for the defendant to the tune of
R200 000, which was not an amount asked for by the defendant.
The
same consideration likewise precludes any conceivable reliance
by the plaintiff on estoppel as the answer to the defendant’s

defence of absence of proper consensus. (Cf
Home Fires
Transvaal CC v Van Wyk and Another
2002 (2) SA 375
(W) at
381I-J.)
[33] Pichulik’s
explanation was that he had no
animus contrahendi
in
completing and returning the document. The onus was on the
plaintiff to prove the contract on which it relied. Proof of
the
terms of the contract included proof of the anterior question
whether both parties had the requisite
animus contrahendi
.
The production of the document, signed by Pichulik, would of course
be a telling indication that the defendant had the necessary
animus
. But that factor is counterbalanced by Pichulik’s
evidence that the document, to the knowledge of Gerber, was produced
for
a specific limited purpose. That evidence is credible. There
is no counter to it. If, at the end of all the evidence, there
is
uncertainty as to whether
animus contrahendi
on the part of
both parties had been established, the plaintiff, on that particular
issue, had to lose. In my view this is precisely
such a case.
There is, furthermore, support in the evidence (for the reasons
mentioned in paras 19 and 30 above) for the analogous
approach
adopted by the trial Court, leading to the same conclusion.
[34] In
the result the plaintiff’s standard terms were in my opinion not
of application to the supply of the panels that the
defendant
ordered from the plaintiff. It follows that those terms could not
serve to prevent the defendant from resisting a
claim for payment
with the
exceptio non adimpleti contractus,
or from advancing
a counterclaim. It also follows that the matter cannot be disposed
of on the rudimentary basis (as the plaintiff
would have it and as
Southwood J held) that judgment be granted to the plaintiff as
prayed. Moreover, for purposes of the Rule
33(4) ruling, the terms
of the agreement between the parties are to be sought in the
evidence of the prior meeting between the
respective representatives
as well as in the correspondence. Details about the goods ordered,
the prices quoted, the terms of
payment (‘nett 30 days’) and the
guarantee all appear from the correspondence. It was common cause
that the specifications
applied in respect of the H70 panels. These
were all findings made by the trial Court (see para 6 above). They
were not, as
such, challenged on appeal.
[35] That leaves for
consideration the question whether non-compliance with the
specifications would entitle the defendant to
pursue the parallel
remedies of withholding part-payment
pro tem
(and if so, to
what extent) and of claiming damages for breach of contract. Those
issues will, however, only arise if it is
established that the
panels were in fact defective in not conforming to the
specifications. That is an issue that the trial
Court, which is
still seized of the matter, will have to determine. Depending on
that finding the trial Court will doubtless
apply the principles
developed in
BK Tooling (Edms) Bpk v Scope Precision Engineering
(Edms) Bpk
1979 (1) SA 391
(A) and subsequent decisions of this
Court.
[36] Finally
I wish to say something about two procedural matters. The first is
the manner in which this trial was unduly prolonged
by the prolix
cross-examination by counsel for the plaintiff of some of the
defendant’s witnesses. The second is the non-compliance
by the
parties of certain rules and directives of the Supreme Court of
Appeal relating to the core bundle and the practice note.
[37] I
remarked earlier in para 26 on the inordinate, tiresome and
protracted cross-examination of Pichulik. The same is true
for the
cross-examination of De Villiers. Proper cross-examination does not
consist, under the guise of testing credibility,
of rehashing with a
witness, repetitively and obstinately, his evidence-in-chief in an
apparent attempt to wear him down so
as to unearth discrepancies
that can then become the source of a submission that the witness
should for that reason be disbelieved.
Cross-examination is not
supposed to be a test of stamina. I do not believe that I am being
unfair to counsel for the plaintiff
if I say that his questioning of
De Villiers and Pichulik, even in the face of remonstrations from
the Bench, was the personification
of that particular style of
cross-examination. To a significant degree this contributed to an
increase in both the duration
and the record of the proceedings
which ultimately escalated to some twenty-one volumes. Counsel for
the respondent estimated
that the trial was unnecessarily prolonged
by at least one third. That estimate is not, in my opinion, an
exaggeration. The
question, then, is what sanction, if any, is to
be applied? The appellant cannot be deprived of any costs since, in
the light
of the order I am about to make on the appeal as such, it
will in any event be liable for the costs of appeal. Instead I
propose
to order that one third of the latter costs be paid on the
scale as between attorney and client.
[38] The second point relates in the first instance to the
preparation of the appeal record. In granting special leave to

appeal on petition this Court said:
‘The
parties are ordered to limit the appeal record to what is strictly
necessary for the determination of the appeal issues.
Failure to do
so may result in a punitive cost order.’
There is
nothing in the record to suggest that either of the parties made any
attempt to comply with Rule 8(9) of the Rules of
the Supreme Court
of Appeal in preparing the record. That sub-rule reads:
‘9(a) Whenever the decision of an appeal is likely to hinge
exclusively on part of the record in the Court
a quo
the
appellant shall within 10 days of the noting of the appeal request
the respondent’s consent to omit the unnecessary parts
from the
record, failing which the respondent shall, within 10 days
thereafter make a similar request to the appellant.
(b) The respondent or the appellant as the case may be, shall within
10 days agree thereto or state the reasons for not agreeing
to the
request.
(c) The request and the respondent’s response shall form part of
the record.
(d) The Court may make a special order of costs if no request was
made or if either of the parties was unreasonable in this regard.
(e) If the parties agree to limit the record, only those parts of
the record of the proceedings in the Court
a quo
as are
agreed upon shall be contained in the record lodged with the
registrar: Provided that the Court may call for the full
record and
may order full argument of the whole case.’
[39] Moreover, sub-rule 8(7) provides as follows:
‘(7)(a) A core bundle of documents shall be prepared if to do so
is appropriate to the appeal.
(b) The core bundle shall consist of the material documents of the
case in a proper, preferably chronological, sequence.
(c) Documents contained in the core bundle shall be omitted from the
record, but the record shall indicate where each such document
is to
be found in the core bundle.’
Sub-rule 8(7)(c) makes it plain that the core bundle is to be
prepared as an adjunct to the appeal record. In the light of the

instruction of this Court when leave was granted it cannot be said
that it would not have been ‘appropriate’ to have prepared
a
core bundle. It should have consisted of a conveniently arranged
and accessible collection of those documents to which it
was
anticipated special reference would be made during the hearing of
the appeal. Once again there is no indication in the record
itself
that any consideration was given to the preparation of such a
bundle. In the event no core bundle was submitted.
[40] These sub-rules are augmented by the requirement for a practice
note issued by the Chief Justice and published in 1997.
One of the
items to be dealt with in the practice note, which is to accompany
counsel’s heads of argument, is ‘a list reflecting
those parts
of the record that, in the opinion of counsel, are not relevant to
the determination of the appeal.’
[41] In his practice note, submitted so it would seem during July
2001, counsel for the plaintiff recorded the following:
‘5. REASONS FOR THE ESTIMATED DURATION:
Although the record is voluminous, the parties have by agreement
excluded major portions thereof as directed by this honourable
court
in its order granting leave to appeal. Reference will therefore
only be made to certain portions of the record and the
documents
contained in the different volumes.
…
7. RELEVANCE OF THE RECORD:
The portions of the record which the parties have agreed not to be
relevant have been marked accordingly by a red line drawn
across the
portions which are not deemed relevant. Minutes of the meeting
confirming this arrangement will be submitted to this
honourable
court.’
The
practice note of counsel for the respondent, dated 3 September 2001,
contains a corresponding statement,
viz.
:
‘As soon as the core record is finalised the record will be
suitably marked by lining through the pages which are not relevant

and in addition by placing coloured tabs in the record.’
No such ‘core record’ (as opposed to a ‘core bundle’) was,
however, submitted at the time or for that matter thereafter.
[42] What does appear from correspondence placed before us,
supplemented by what we were told from the Bar, was, first, that
the
legal representatives of the parties met during October 2001, long
after the record had already been submitted, with a view
to
preparing a so-called core record, and secondly, that while still
engaged on its preparation, they received notification from
the
Registrar of the Court on 28 November 2001 that the matter had been
enrolled for hearing on 25 February 2002.
[43] The preparation of the proposed list was apparently completed
on 12 December 2001. It consisted of the selection of those
pages
in each volume that the parties regarded as relevant for the
purpose of the hearing of the appeal. For some unexplained
reason
that list only reached the Registrar, according to a date stamp on a
letter addressed to her, on 25 January 2002. It
reached the members
of the Court shortly thereafter. By then all the members of the
Court had completed their reading of the
full record, including
those parts that the parties considered to be inessential. It was
accordingly of little assistance in
facilitating the preparation of
the appeal by the members of the Court.
[44] The upshot of what has been stated above is that there was
compliance with neither the Rules of the Supreme Court of Appeal

relating to the reduction of the record and the preparation of a
core bundle nor with the directives about the practice notes

relating to the exclusion of non-essential material; and that the
members of the Court were undoubtedly inconvenienced thereby.
[45] Once again there is the question of what sanction to impose.
The primary obligation to prepare the record rested with the

appellant. But in this case counsel for the respondent very fairly
conceded that both sides were equally to blame for the

non-compliance with the above mentioned procedural directives. In
both
Caterham Car Sales Coachworks Ltd v Birkin Cars (Pty) Ltd
and Another
[1998] ZASCA 44
;
1998 (3) SA 938
(SCA) at 954H-955B and
Premier,
Free State, and Others v Firechem Free State (Pty) Ltd
2000 (4)
SA 413
(SCA) at 434D-G, it was emphasised that practitioners may in
appropriate circumstances be penalised if practice directives are

ignored. I have considered whether some or other punitive order for
costs should not be made in the circumstances outlined above,
but in
view of the fact that both parties were at fault about the
preparation of the record and were in the process of complying,

albeit belatedly, with the practice note requirement when the matter
was unexpectedly enrolled, it seems to me on reflection
that a
special cost order against either of them is not clearly warranted.
[46] To recapitulate. The appeal must fail. That means that the
order of the trial Court is to stand, including the findings
as to
the true terms of the agreement between the parties, which, but for
the issue of the standard terms, were not seriously
in dispute. In
the end result the matter will have to revert to the trial Court to
resume the hearing, this time on the issues
that remain.
[47] The following order is made:
The appeal is dismissed with costs, a third of which costs is to be
taxed on the scale as between attorney and client.
……………….
NIENABER JA
JUDGE OF APPEAL
Concur:
Olivier JA
Farlam JA
STREICHER JA:
[1] I have read the judgment by Nienaber JA but cannot
agree that the appeal should be dismissed. My reasons are
substatially
the same as those given by Southwood J for disagreeing
with the majority judgment in the court
a quo.
[2] At the
request of the parties the trial court ordered that the following
issues be decided first:
‘
1 Whether the plaintiff’s action has been
compromised as alleged in defendant’s special plea;
By whom the plaintiff was represented in concluding
the agreement of sale with the defendant, and what the terms of the
agreement
between the parties were upon which the dispute should be
adjudicated;
The implication of the terms of the agreement between
the parties, in particular:
Whether the defendant is precluded from raising a
defence of non-payment due to an alleged defect in some of the
solar panels;
and
Whether the defendant is precluded by such terms from
claiming damages in the nature set out in defendant’s
counterclaim.’
In my view the issues were formulated too widely. The
real issues between the parties, apart from the compromise issue,
were whether
the standard conditions of trade of the appellant
applied to the sale of solar panels by the appellant to the
respondent, whether
the respondent was contractually precluded from
raising a defence of non-payment due to a defect in the solar panels
and whether
the respondent was contractually precluded from
claiming consequential damages as a result of such a defect. The
parties were
entitled to a determination of those issues and not to
a determination of each and every term of the contract and of whom
represented
the parties in respect of each such a term. The trial
court should only have decided the real issues between the parties
and
those are the only issues that I will address in this judgment.
[3] As stated by Nienaber JA the major issue between
the parties at this stage of the proceedings is whether the standard
conditions
of trade of the appellant applied to the sale of solar
panels by the appellant to the respondent. He, as well as the
majority
of the court
a quo,
are of the view that Pichulik, a
director of the respondent, never agreed that the standard
conditions would apply.
[4] The following facts are not in dispute:
The appellant is a company within the Marvol group of
companies.
During the period June to August 1993 the parties were
negotiating a sale of solar panels by the appellant to the
respondent.
On 28 June 1993 the appellant, in writing quoted for
the supply of solar panels to the respondent. In terms of the
quotation
the appellant offered a 10 year guarantee on all solar
modules. The quotation stated that the payment terms were to be
discussed.
The parties agreed that five panels would be delivered
to the respondent for testing purposes.
The respondent contemplated that a purchase of the
solar panels would be on credit.
On 4 August 1993 Ms Gerber, a bookkeeper and credit
supervisor in the employ of the appellant, faxed a document to the
respondent.
The document was headed ‘
APPLICATION FOR CREDIT
FACILITIES’
.
On 9 August 1993 the director responsible for the
financial side of the respondent’s business, Mr Pichulik, signed
the document
and returned it to the appellant. Pichulik’s
signature appears immediately below the following paragraph:‘All
purchases
will be made in terms of and subject to the conditions of
trade of Helios Power (Pty) Ltd, as printed on the reverse hereof,
which by signing this, I acknowledge having read, understood and
accepted. I also warrant that I am authorised to sign this

application.’
In terms of the standard conditions of trade ‘approved
credit’ is for a maximum period of 30 days after delivery of
goods
unless specified otherwise in writing.
The respondent did not otherwise apply to the
appellant for credit.
The question whether the appellant should grant credit
to the respondent was taken up with Dr Venter, the managing
director
of the appellant, but he was not prepared to grant credit
facilities to the respondent. Thereupon the matter was taken up
with
Mr Wolf, the financial director of the Marvol Group. He
decided that the respondent was good for credit and conveyed his
decision
to the management of the appellant.
On 16 August 1993 the respondent wrote to the
appellant in a letter faxed to Mr Mac Micciarelli:
‘
With regard to our telephone conversation this
morning, I confirm the following:
(a) the prices of your modules are R1 133,00 for the
HTO, and R910,00 for the H55S nett 30 days.
This is an official order for the following quantities
. . .’
[5] Pichulik’s
evidence was to the effect that he did not consider the document
that he signed to be an application for credit
facilities, nor did
he intend to contract on the basis set out in the document.
According to him Gerber had telephoned him before
the test panels
were delivered to the respondent. She said that it was an unusual
situation in that the respondent was going
to receive panels without
paying for them and that she needed some information about the
respondent in order to update her records.
For this reason she was
going to send him the appellant’s standard form which he should
fill in. When Pichulik received the
form he did not think that the
relevant paragraph quoted above applied because there was no
purchase yet. He thought that the
second page had not been sent
because it was not in the minds of either Gerber or himself to enter
into a contractual arrangement.
[6] Gerber’s evidence was that it was the appellant’s
practice to fax both the front page and the back page of the credit

application form to applicants for credit facilities. Upon receipt
of the application her secretary would make the necessary enquiries

whereafter the form would come back to her. She would then have
taken it up with Venter. She could not remember precisely what

happened in this case but could remember that Venter was not
satisfied, that Wolf got involved and that Wolf authorised the grant

of credit facilities to the respondent. It is implicit in her
evidence that she could at least remember that there was a credit

application. She could not think that she would have said that the
document was required merely for information purposes.
[7] The trial court held that Pichulik’s evidence
regarding the circumstances under which he received the front page
of the
document purporting to be an application for credit
facilities was uncontested and that his evidence was accordingly to
be accepted.
Nienaber JA, after an examination of the evidence,
concludes that:
‘
In the absence of any other explanation for the
furnishing of the document, Pichulik’s evidence, that it was
required as an
information sheet for record purposes, accordingly
stands unchallenged. The trial Court accepted it and no compelling
reasons
have in my opinion been advanced why this Court should
depart from that finding.’
[8] In my view it is so improbable that Pichulik did
not intend the document to be considered as an application for
credit that
his evidence in this regard should have been rejected
out of hand. In any event I do not agree with the trial court and
Nienaber
JA that his evidence stands unchallenged.
[9] I consider Pichulik’s evidence to be improbable
in the light of the facts stated above, more particularly the fact
that
the document was headed ‘Application for credit facilities’
in bold capital letters, the fact that Pichulik appended his

signature below words to the effect that the respondent intended to
make all purchases in terms of and subject to the conditions
of
trade of the appellant, the fact that the parties, at the time, were
negotiating a sale of solar panels and the fact that
the terms of
payment still had to be negotiated. It is even more improbable in
the light of Pichulik’s own evidence to the
effect that:
It was contemplated that the respondent would buy on
credit.
He must have read the document. He normally does not
sign documents that he has not read.
It was obvious to him that the appellant wanted to
‘check’ the respondent ‘out from a credit point of view, it
was not
just updating records’.
He anticipated that the information contained in the
form ‘would be used and probably incorporated into the decision’
to
grant the respondent credit. Moreover, he knew that the
information sought would be used for purposes of deciding whether
or
not to give credit to the respondent should the respondent do
business with the applicant.
His role in the respondent was that of ‘director for
everything, except for the technical execution of the company’.
When presented with standard conditions of trade he
normally scratches out all those paragraphs which are not to his
liking.
He drew a line through the space provided for trade
references and wrote ‘New Company’.
He drew a line through the words ‘YES/NO’ in
respect of the question whether the directors were prepared to sign
guarantees
and wrote ‘to be negotiated’.
He drew a line through the space provided for
particulars of fixed property offered as security.
He did not delete the words ‘application for credit
facilities’ or the statement that purchases would be made subject
to
the conditions of trade of the appellant.
The granting of credit would have required further
negotiations between the parties and additional information. Yet,
he did
not suggest that any such further negotiations took place
before credit was granted to the respondent.
[10] In the light of all these facts Southwood J held:
‘Mr Pichulik’s evidence about his intention not to enter into a
contract cannot be accepted at face value. He was an experienced

busninessman. He was described and described himself as a
punctilious person. He confirmed that he never signs any document
without reading it first. He testified that if there are terms in a
document which are not to his liking he deletes them. He confirmed

that in this case he read the application for credit facilities
carefully and entered information and made deletions and amendments

where appropriate. It is obvious that the application has a serious
commercial purpose and he confirmed that it would be used
for the
basis of granting credit.
If Mr Pichulik had really not intended to bind the
respondent to the appellant’s conditions of trade then the
overwhelming probability
is that two things would have happened.
First: He would not have signed the document as it
stood. On his evidence there was no need to sign the document. All
that the
appellant wanted was certain information.
Second: He would have deleted the certificate or
undertaking as was his wont. On his evidence that is what he did
when he did
not find terms in an agreement to his liking.
The fact that he signed the document just below the
certificate after carefully reading and amending the document is
overwhelming
evidence that he intended to bind the respondent to the
conditions of trade.’
I agree.
[11] For the reasons that follow I do not agree with
Nienaber JA and the trial court that Pichulik’s evidence stands
uncontradicted.
Pichulik’s evidence was challenged in
cross-examination. In a laborious cross-examination over a number of
days the improbabilities
in his version were exposed. It should and
could have been done in an hour or two. In the light of Gerber’s
evidence that she
often faxed the document to customers her evidence
that she could not specifically remember her conversation with
Pichulik is
not surprising and affords no justification for finding
that Pichulik’s evidence stands uncontradicted. On her evidence it

is improbable that she would have told Pichulik that she merely
wanted information. Not only did she say so, she also dealt with
the
form as if it was an application for credit facilities as is
confirmed by the evidence of Venter and Wolf. Although Venter
was
uncertain as to whether he had seen the specific document and Wolf
could not recall having seen the written credit application
both of
them confirmed that they dealt with a credit application by the
respondent. Nobody suggested that there was another credit

application and no reason was advanced as to why the evidence of
Venter and Wolf should not be accepted. The fact that the respondent

had not yet finally decided to buy does in my view not make it
improbable that Gerber would have asked Pichulik to complete a

credit application. By that time the parties had been negotiating
since June 1993, the appellant had been asked to quote for
the
supply of solar panels and in the appellant’s quotation dated 28
June 1993 it was stated that payment terms had to be discussed.
It
does not seem to me improbable at all that the respondent would have
applied for credit facilities on 9 August 1993, some
7 days before
an order was eventually placed.
[12] There is yet another reason why Pichulik’s
evidence should have been rejected. According to him he was
horrified when the
appellant claimed that he was bound by the
standard conditions and a copy thereof was sent to him. However, in
an application
for the rescission of a default judgment granted to
the appellant in this very matter De Villiers, another director of
the respondent,
deposed to an affidavit in which he said that when
the respondent first did business with the appellant a credit
application
form was filled out and signed by the directors of the
respondent but that as far as could be recalled the terms and
conditions
of contract referred to therein were not attached at the
time of signing thereof. Pichulik was the person who gave the
instructions
to the attorney who drafted the affidavit and when he
subsequently read the affidavit there was, according to him, nothing
in
the affidavit which struck him as being incorrect. If Pichulik
had not intended the relevant document to be a credit application

and if he was horrified to hear that it was considered to be such it
is inconceivable that the statement in the affidavit would
not have
struck him as being incorrect.
[13] In my view the trial court erred by failing to
recognise that Pichulik’s evidence was highly improbable and by
considering
his evidence to stand uncontested.
[14] In any event, I agree with Southwood J that the
document is clear and unambiguous and that there is no room for
mistaking
its import. Even if Gerber told Pichulik that she wanted
him to fill in a form for information purposes, it would have been
clear
to him, when he received the form, that she wanted him to
submit a credit application when he received the form. There could,
therefore, have been no doubt in his mind that the document he
returned constituted an application for credit facilities and an

undertaking to be bound, for the future, by the standard conditions
of trade,
[15] Pichulik
signed a credit application in which he said that purchases would be
made in terms of and subject to the conditions
of trade of the
appellant as printed ‘on the reverse hereof’. The reference was
clearly to the reverse of the original document.
Pichulik never said
that he understood the reference to be to the reverse of the fax. If
the reverse was not faxed to him and
not known to him he could have
called for a copy. By not doing so he indicated that he was
nevertheless prepared to contract
on the basis of the appellant’s
standard conditions. The full court erred in holding that a person
‘cannot be held to be
bound by something which he has not seen’.
If a person is prepared to contract subject to standard conditions
which he has
not seen there is nothing preventing him from doing so.
[16] In my view the following evidence established that
the application for credit facilities submitted by Pichulik to the
appellant
was granted by the appellant. Gerber said that she would
have referred the credit application to Venter and that she would
have
given the form to him. Venter testified that a credit
application by the respondent was submitted to him although he could
not
be sure that he had seen the specific document signed by
Pichulik. He was not prepared to grant credit. Wolf then became
involved
and he authorised the grant of credit to the respondent. On
the 16
th
of August 1993 the respondent was advised by Mr
Mac Micciarelli that the respondent could buy solar panels on 30
days credit.
[17] The question then arises whether the respondent
was contractually precluded from raising a defence of non-payment
due to
a defect in the solar panels and whether the respondent was
contractually precluded from claiming consequential damages as a

result of such defect. Clauses 1, 3 and 5 are relevant in this
regard. They are quoted in Nienaber JA’s judgment.
[18] The respondent contends that the solar panels
delivered by the appellant were defective and did not comply with
the specifications
in that ‘the output of electricity given was,
15 to 21% below that which (was) laid down in the specification’.
It tendered
to return to the appellant the panels it still had in
stock.
[19] The appellant did not submit that the conditions
relieved him from the obligation to deliver solar panels complying
with
the specification and the clauses clearly did not have that
effect. What the appellant did submit was that, in terms of the
standard
conditions, the respondent was not obliged to pay the
purchase price but that to the extent that the panels became
defective
subsequent to delivery clause 3 of the standard conditions
applied. The respondent, on the assumption that the standard
conditions
applied submitted that to the extent that the panels
became defective before payment had to be made i.e. within the 30
day credit
period, it was not obliged to pay the purchase price. In
my view the standard conditions are clear. The appellant’s
obligation
was to deliver solar panels complying with the
specification. After delivery of panels complying with the
specification the
appellant had a discretion to either replace or
repair them in the event of them subsequently becoming defective.
[20] Clause 5 of the standard conditions excludes
liability on the part of the appellant for consequential damages.
[21] I agree with Nienaber JA that the appellant should
be sanctioned for the inordinate, tiresome and protracted
cross-examination
of Pichulik and De Villiers. A proper sanction
would be not to accede to the appellant’s request that costs be
granted on the
attorney and client scale and to deprive the
appellant of a third of its costs of appeal.
[22] The parties agreed that if the appeal were to be
upheld the respondent would be liable to pay the wasted costs of the
postponements
of the trial of this matter on 5 August 1996 and 29
August 1997.
[23] In my view the following order should be made:
The appeal is allowed.
The respondent is ordered to pay two thirds of the
appellant’s costs of appeal.
The order made by the court
a quo
is set aside
and replaced with the following order:
‘
1 The appeal is allowed with costs.
2 Paragraphs 2 to 5 of the order of the trial court are
replaced with the following paragraphs:
“
2 It is declared:
That the sale of solar panels by the plaintiff to
the defendant was in terms of and subject to the plaintiff’s
standard
conditions of trade as set out in annexure A to the
plaintiff’s declaration.
That, to the extent the solar panels sold and
delivered to the defendant by the plaintiff became defective
after delivery
the defendant is precluded from raising a defence
of non-payment due to such defect.
That the defendant is in terms of clause 4 of the
standard conditions precluded from claiming consequential
damages as
a result of defective panels from the plaintiff.
The defendant is ordered to pay the wasted costs of
the postponements of the trial set down for 5 August 1996 and 29
August
1997.”’
_____________
P E Streicher
Judge of Appeal
Nugent,
JA) concur