The respondent issued summons out of the High Court seeking an order for the release of its plastic bags which were being retained by the appellant, payment of the sum of US$157,350=05 representing the business it lost as a result of such retention, and costs of suit on the scale of legal practitioner and client.
The respondent also sought payment of interest from the date of issue of summons to the date of payment in full.
After hearing evidence and submissions from the parties, the court a quo ordered the appellant to pay the sum of $157,350=05 to the respondent being damages for loss of business, interest on that sum at the prescribed rate, and costs of suit on the ordinary scale.
The present appeal is against that order.
FACTUAL BACKGROUND
The appellant is a company registered in accordance with the laws of Zimbabwe and carries on business from premises in Avondale, Harare. It is an agent of the Mediterranean Shipping Company (“Mediterranean Shipping”) a company that operates worldwide with its core business being the carriage of containers.
As agent, appellant's responsibility is to fulfil the obligations of Mediterranean Shipping by facilitating delivery of containerised cargo to the clients of Mediterranean Shipping in Zimbabwe.
In this particular instance, at the behest of Mediterranean Shipping, the appellant supervised the movement, by road, of the plastic bags, which were in a container, from the Port of Beira to Mutare Dry Port.
In Mutare, the appellant instructed the employees of the Port not to release the goods until certain monies were paid by the respondent.
It is common cause, that, initially, the appellant refused to release the container until a sum of money owed by the wife of one of the directors of the respondent had been paid. Upon realizing that the debt had nothing to do with the respondent, the appellant then demanded payment of the sum of $80=50 in respect of handling charges.
The respondent, believing the bags had been unlawfully retained by the appellant, instituted proceedings in October 2012 for the release of the bags, damages for loss of business, and interest thereon at the prescribed rate.
The sum of $80=50 was only paid in August 2013 after which the plastic bags were then retrieved.
PROCEEDINGS A QUO
In its declaration, the respondent alleged that it had imported a container of plastic bags from Hong Kong and that it had engaged the appellant as its agent to facilitate the importation and clearing of the goods with the Zimbabwe Revenue Authority(“ZIMRA”).
It alleged, that, notwithstanding the fact that it had paid the import duty and the appellant's clearing fees, the appellant had refused to release the container on the basis that it was owed money from a previous transaction by the wife of one of the respondent's directors.
It alleged, that, consequent upon the refusal by the appellant to release the container, a client who had placed an order with it for plastic bags had cancelled the order as a result of which the respondent had suffered damages in the amount claimed.
In its plea, the appellant, as defendant, denied that it had entered into a contract of agency with the respondent.
It alleged, that, it had been contracted by the shipper (a term used in the freight business to denote the person who prepares the necessary documentation for the carriage of goods), Hong Kong Richer Int'l Group Limited (”Richer International”) to transport the cartons of plastic bags cif Mutare. It alleged, that, it duly discharged its obligations to deliver the container to Mutare Dry Port after which the respondent became liable to pay its administration fee relating to the Bill of Lading and the container in the sum of $80=50.
The appellant accepted that it refused to release the container before payment of the administration fee in the sum of $80=50 had been made.
At a pre-trial conference before a judge in chambers, the parties agreed the issues to be determined at the trial.
The issues included, inter alia, whether a contract existed between the parties, and, if so, the terms thereof. Further, whether the appellant was entitled to refuse to release the container until payment of the handling fee of $80=50 had been made, and, if not, whether the respondent had suffered damages in the amount claimed in the summons.
During viva voce evidence, the respondent, represented by its managing director, Albert Kuwaza, stated as follows:
His company ordered the plastic bags from China, and, through the supplier, engaged the appellant at its offices in China to transport the merchandise from China to Mutare, Zimbabwe. Once the goods were in Mutare, the appellant then demanded payment of the sum of $1,750 which it alleged was owed by a Mrs Kuwaza, wife of one of the respondent's directors, in respect of a previous transaction.
The issue of the handling fee of $80=50 was raised by the appellant for the first time in October 2012, way after a client who had placed an order for the bags had cancelled the purchase.
Under cross-examination, he conceded, that, in fact, the company with which he contracted in China was Hong Kong Richer Int'l Group Limited (Richer International) and that Richer International, in turn, contracted with Mediterranean Shipping to transport the goods to Mutare. He further conceded, that, the clearing fees were paid directly to Green Motor Services, the company that was operating Mutare Dry Port and not to the appellant. He told the court, further, that, as far as he was concerned, the appellant, Mediterranean Shipping, and Green Motor Services were part of the same company.
Following the dismissal of an application for absolution at the close of the plaintiff's case, the appellant's managing director, Dr Giorgio Spambinato, gave evidence before the court a quo. His evidence was as follows:
The appellant, which operates from offices situate at 27 Natal Road, Belgravia, Harare is an agent of Mediterranean Shipping. It has no offices outside Zimbabwe. The appellant's role was to assist Mediterranean Shipping to execute its contractual obligation of moving cargo into and out of Zimbabwe. In this case, the appellant only supervised the movement, by road, of the container from the Port of Beira to Mutare. It was not involved in the clearance of the goods with the Zimbabwe Revenue Authority (ZIMRA).
He confirmed that, initially, the appellant had insisted on payment of the sum of $1,750 owed by a Mrs Kuwaza in respect of a previous transaction, but, on realizing the error, had personally instructed that the container be released on payment of the sum of $80=50.
That sum represented the handling fee for facilitating the necessary documentation and supervising the speedy execution of delivery by sub-contractors and service providers.
He explained, that, in Zimbabwe, it is customary for the agent handling the cargo on behalf of Mediterranean Shipping to recover the costs directly from the recipients of the cargo. In other countries, the handling fee is paid by Mediterranean Shipping.
Whatever role the appellant played in this case was in fulfilment of its agency agreement with Mediterranean Shipping.
In its closing address a quo, the respondent submitted, that, the question whether there was a contract was “of no real consequence” and that “there needn't have been a contract between them because the scenario can be resolved by the principles of depositum…,.” Further, that, as depositary, the appellant had an obligation to return the goods to the respondent upon demand.
The respondent further submitted, that, it was clear from the summons and declaration that the claim “was vindicatory in nature, not contractual.”
Accordingly, the respondent prayed for its claim for damages and interest thereon to be granted on the basis of depositum.
In its address a quo, the appellant submitted, that, on the evidence led before the court, no contract had been proven. The person with whom the respondent had communicated in China was not the appellant but an employee of Mediterranean Shipping. More critically, the terms of the alleged contract between the respondent and the appellant had not been established. Moreover, at no stage had the respondent deposited the goods with the appellant.
In its judgment, the court a quo found, that, Mr Kuwaza, the managing director of the respondent had been unclear as to the nature of the relationship between the appellant, Mediterranean Shipping, Hong Kong Richer Int'l Group Limited (Richer International) and the respondent.
The court remarked as follows at page 10 of its judgment:
“What is apparent from Mr Kuwaza's evidence is that he did not produce any documents to show the existence of a contract between the plaintiff and the defendant. From the evidence that is before me, it is clear that the plaintiff entered into a shipping agreement with Mediterranean Shipping Company in Hong Kong, China in April 2012 for the shipment of its plastic container from China to Zimbabwe. That contract did not involve the defendant.”
However, at pages 10-11 of the cyclostyled judgment, the court a quo stated:
“I am of the considered view, that, the circumstances of this case show, that, there was a contract between the plaintiff and the defendant. Although the defendant said that it was acting as an agent of Mediterranean Shipping Company, its conduct towards the plaintiff shows that it also contracted with the plaintiff separately. It is not disputed that the defendant facilitated the importation of the plaintiff's cargo from the Port of Beira to Mutare.
Thereafter, it demanded payment from the plaintiff for the service that it had rendered.
The parties did not enter into this contract verbally or in writing, but, they did so by their conduct.
By demanding payment from the plaintiff for the costs it incurred in facilitating the importation of the plaintiff's cargo, the defendant created a contract between itself and the plaintiff. It made it a condition of the contract, that, if the administration fee was not paid, the plaintiff's cargo was not going to be released.
If there was no contract between the plaintiff and the defendant, the defendant should have simply demanded payment of its fees from Mediterranean Shipping Company which it alleges to be its principal.
At law, an agent's duty is to perform his mandate on behalf of his principal and he accounts to his principal. The agent's remuneration is paid by the principal and not by a third party.
I therefore take it, that, the moment an agent starts demanding payment from the third party and not from his principal, then, it means that he is no longer acting in terms of the contract between himself and his principal, but he would have created his own contract with the third party.
That contract he would have created with the third party is separate from his contract with his principal.
In casu, this is what the defendant did. It created its own contract with the plaintiff, which contract was separate from the one it had with Mediterranean Shipping Company.”
At page 12 of its judgment, the court, without commenting on the submission by the respondent, that, it now relied on a contract of depositum, concluded by stating:
“If there was no contract between the 2 companies, then, the defendant should and would have demanded its fee from Mediterranean Shipping Company which is its principal. If there was on (sic) contract, the defendant had no business demanding that money from the plaintiff. It also had no business withholding or refusing to release the plaintiff's container on the basis that the handling fee had not been paid. All the defendant's payments would have been due from Mediterranean Shipping Company. The plaintiff managed to prove that there was contract between itself and the defendant.”
Based on the above findings, the court concluded, that, the appellant had wrongfully refused to release the container and that the respondent had proved its contractual damages. It consequently made the order which is the subject of this appeal.
GROUNDS OF APPEAL
In its notice of appeal, the appellant raised five grounds. These are:
(i) The court a quo erred in finding, that, there was a contract between the appellant and the respondent when the latter was unable to identify the nature of the contract it relied upon and its terms – i.e. whether the contract was one of carriage, depositum, or agency.
(ii) The court a quo erred in finding, that, there was a contract between the appellant and the respondent despite a contrary indication in the Bill of Lading and the respondent's lack of knowledge of the terms of the contract it alleged.
(iii) The court a quo erred in placing the onus of proving the terms of the contractual relationship between the appellant and the respondent on the former, albeit obliquely.
(iv) The court a quo erred in finding that -
(1) The contract for the sale of the plastic bags between the respondent and Nedol Investments (Private) Limited was not a sham; and
(2) The loss suffered by the respondent, if any, was reasonably foreseen by the appellant at the time of the conclusion of the alleged contract, and, despite the fact that the reasonable foreseeability was not specifically pleaded and proved.
(v) The court a quo erred in finding that the respondent had mitigated its loss.
APPELLANT'S SUBMISSIONS BEFORE THIS COURT
In its submissions before this Court, the appellant has argued, that, the respondent did not sufficiently identify the nature of the contract between the parties, in particular, whether it was one of agency or depositum. The terms of the agreement, be it agency or depositum, remained unknown.
It further submitted, that, the case for the respondent was muddled and that the judgment of the court a quo was equally confusing and confused. Lastly, it submitted that whilst the facts show some relationship between the parties, the respondent had not proved the nature of the relationship that existed between them.
RESPONDENT'S SUBMISSIONS BEFORE THIS COURT
In its heads of argument, the respondent has submitted as follows:
Its declaration in the court a quo made it clear, that, what it sought was the release of its goods arising from their unlawful detention. Further, that, even if there was no contract of agency between the parties, the respondent “was not without a remedy” and that there was a tacit contract of depositum between the parties.
In paragraph 3 of its heads of argument, it has further stated:
“The respondent had contended that the claim was of a vindicatory nature and that any contract between the parties was one of depositum…,. As the appellant states, the court did not deal with these issues. It is here noted, that, by the time the matter came before the court, the goods had been released, and, if the claim had originally been vindicatory in nature, it no longer was, which was probably the reason why the court a quo allowed itself to be misled by the appellant to believe that the claim fell to be decided in contract.”…,.
At paragraph 10 of its heads of argument, the respondent has also stated:
“The absence of a contract, however, would not have left the respondent without a remedy because he would have a claim in delict for any loss incurred as a result of the unlawful possession of his property…,.”
Finally, at paragraphs 13 and 14 of its heads, the respondent has further argued:
“13. Thus, as the respondent's counsel contended at p239, the issue whether there was a contract between the parties was really of no consequence and the appeal cannot succeed on the basis that no such contract was brought into being.
The court a quo found, in effect, that, there was a tacit contract between the parties based on the fact, that, the appellant raised charges mentioned above against the respondent.”...,.
REQUISITES FOR PLEADING A CONTRACT
In an action based on a contract, the material averments that must usually be made are the existence of the contract, the relevant terms of the contract, and the applicability of those terms to the particular right forming the basis ex contractu of the claim: see HERBSTEIN & Van WINSEN, The Civil Practice of the High Courts of South Africa (5th edn, Juta and Co. Ltd, Cape Town 2009)…,.
Whether the contract of agency was proved
This was the basis of the respondent's cause of action before the High Court.
The respondent's managing director did not know the exact relationship between the appellant, Mediterranean Shipping, and Hong Kong Richer Int'l Group Limited (Richer International) of Hong Kong.
From the evidence, it is clear that the appellant was not involved in the transactions that took place in China. It does not conduct operations outside Zimbabwe. It only got involved, as agent of Mediterranean Shipping, in tracking the container once it landed in Beira and in having it transported to Mutare Dry Port.
It was also clear from the evidence, that, as agent of Mediterranean Shipping, the appellant was supposed to receive payment from Mediterranean Shipping for its role in checking the Bill of Lading and ensuring that the cargo was delivered to Mutare Dry Port. The appellant's managing director explained, however, that, it is the practice in Zimbabwe for the recipient to be billed directly by the appellant.
Clearly, no contract of agency was proved.
The fact that the appellant invoiced the respondent for handling fees does not, on its own, show the existence of a contract. The exact relationship that existed between the two parties was not established.
In the circumstances, the court a quo should have granted the application for absolution from the instance which was made at the close of the case for the plaintiff.
The court a quo accepted, that, the respondent had not produced documents to show the existence of a contract. The court further accepted, that, the respondent had entered into a shipping agreement with Mediterranean Shipping in Hong Kong and that the appellant was not involved.
The court also accepted, that, the appellant only got involved in supervising the movement of the container from Beira to Mutare at the behest of Mediterranean Shipping. The court further found, that, although the parties had been involved in these transactions over the years, the respondent did not know that the appellant was merely an agent of Mediterranean Shipping.
Having made these findings, that really should have been the end of the matter.
The suggestion, that, judging by the conduct of the parties, there must have been some other undefined contract between them, is not borne by the evidence. In any event, the court did not state what type of contract this may have been and what its terms were.
Of significance is the fact, that, the respondent itself accepted, in its closing submissions, that, its claim was not based on agency but rather on depositum.
Having abandoned its claim based on a contract of agency, it was not for the court a quo to find, as it did, that there was some other undefined contract. Once the respondent abandoned its pleadings, the court should have granted absolution from the instance.
The attempt by the respondent, to rely on the rei vindicatio and depositum, as well as delict, clearly confirms that the respondent had not established any real cause of action against the appellant.
Implicit in the submissions by the respondent, both a quo and in this court, is the suggestion, that, although not pleaded, the existence of a contract of depositum was established on the evidence adduced before the court a quo.
Depositum, as a concept, was, as would be expected, developed by the Romans.
A contract of depositum, or deposit, as we now call it, is “…, a contract in which one person (depositor) gives another (depositarius) a thing to keep for him gratis, and to return it on demand;…, the ownership of the thing is not transferred, but, ownership and possession remain with the depositor;…,. The receiver is not allowed to use it.”
See HUNTER W.A. A Systemic and Historical Exposition of Roman Law in the Order of a Code (2nd Ed) William Maxwell and Son, London, 1885.
In B.C. Plant Hire CC t/a BC Carriers v Grenco (SA) (Pty) Ltd (2004) 1 ALL SA 612 (C), the court held that a contract of depositum comes into existence when one person (the depositor) entrusts a movable thing to another person (depositary) who undertakes to care for it gratuitously and to return it at the request of the depositor. The depositary does not benefit from the deposit in any way. If the depositary uses the thing, then, this is considered a furtum usus.
The depository can only be found liable where gross negligence (culpa lata) is established.
See also Ncube v Hamadziripi 1996 (2) ZLR 403 (HC); Munhuwa v Mhukahuru Bus Services (Pvt) Ltd 1994 (2) ZLR 382 H; Smith v Minister of Lands and Natural Resources 1979 RLR 421 (G); 1980 (1) SA 565 (ZH).
In this case, it was never the respondent's case, at any stage, that, it had given the container to the appellant for safe keeping or that the appellant had agreed to keep the container gratis and to return it on demand.
The appellant does not handle containers ex gratia. To the contrary, the appellant was demanding payment of the handling fee of $80=50 before the container could be released to the respondent.
In short, the evidence did not establish the existence of a contract of depositum.
It is clear, from all the circumstances of this case, that, the respondent did not establish any cause of action cognizable at law against the appellant.
It may, but I make no firm finding in this respect, have had a cause of action arising out of delict, as suggested by its counsel before this Court. However, this was not the cause of action pleaded before the court a quo or established during the oral hearing.
The possibility of a cause of action arising from delict was, as already noted, raised for the first time in heads of argument filed before this Court.
The fact that the respondent abandoned its claim based on agency and then sought to rely on the rei vindicatio and depositum (without amending its pleadings) and also delict, leaves one in no doubt that the respondent was on a fishing expedition and was not clear, even in its own mind, what its cause of action against the appellant was.
In changing its cause of action at whim, as it did, the respondent breached the whole essence and purpose of pleadings.
It cannot, in these circumstances, be said to have proved its claim for contractual damages against the appellant.
The appeal must therefore succeed. Costs are to follow the event.
It is accordingly ordered as follows:
1. The appeal succeeds with costs.
2. The judgment of the court a quo is set aside and in its place the following is substituted:
“The plaintiff's claim be and is hereby dismissed with costs.”
