This is an appeal against a judgment of the High Court
which ordered the appellant to pay the sum of US$763,068= to the respondent in
respect of forty-eight (48) buses sold and delivered, together with interest
thereon at the rate prevailing from time to time in the United States of
America with effect from 22 August 2004 to date of final payment and costs.
BACKGROUND
The background to the dispute between the parties is
succinctly captured in the judgment of the court a quo. It is to the following
effect;
On 7 August 2007, the respondent, as plaintiff, issued
summons against the defendant in HC4215/07 claiming:
(a) Payment of the sum of US$763,068= being the balance due
and payable by the defendant to the plaintiff in respect of buses sold and
delivered to the defendant by the plaintiff at the defendant's special instance
and request which, despite demand, the defendant failed to pay to the
plaintiff.
(b) Interest on the sum of US$763,068= at the rate
prevailing from time to time in the Supreme Court of the United States of
America with effect from 22 August 2014 to date of final payment.
(c) Payment of collection commission on the above sums
calculated in accordance with by-law 70 of the Law Society of Zimbabwe By-Laws,
1982 and costs of suit on a legal practitioner and client scale to the extent
that such costs are permitted in proviso (iii) to By-Law 70(2).
(d) Costs of suit.
It is necessary to set out the pertinent paragraphs of the
plaintiff's declaration where its claim is set out as follows:
“3. The parties entered into an agreement in terms whereof
Plaintiff undertook to supply to the Defendant certain goods, namely, Scania
buses.
4. Pursuant to the agreement, Plaintiff delivered a total
number of 50 Scania buses for a total purchase price of US$4,877,000=.
5. As security for the due payment of the full purchase
price for the 50 Scania buses, Defendant placed at the disposal of the
Plaintiff, cash cover in the total sum of ZIM$6,200,000,000= in January 2003
and again in May 2003, which amount was to be held by Metropolitan Bank of
Zimbabwe Limited pending due performance by the Defendant, that is to say, payment
of the full purchase price for the 50 Scania buses.
6. Pursuant to the agreement, Defendant paid a total sum of
USD4,113,932= leaving a balance in the sum of US$763,068= due and payable to
Plaintiff.
7. In breach of the agreement between the parties, and on
or about 21st August 2004, Defendant withdrew and or caused the
withdrawal of the cash cover security earlier provided by it to the Plaintiff
and the balance of the purchase price immediately became due and payable to
Plaintiff.
8. Defendant agreed and undertook to pay to the Plaintiff
Collection Commission and costs on an Attorney and Client scale in the event of
Plaintiff incurring such charges in the recovery of all and any monies due and
payable by Defendant to Plaintiff.
9. It was at all material times within the contemplation
and knowledge of the parties that in the event of Defendant failing to pay the
purchase price, Plaintiff would be obliged to pay the purchase price in the
currency of the United States Dollar to the manufacturer of the buses, namely,
Scania South Africa (Pty) Limited.
10. During the period of May 2004 to June 2007, Plaintiff
paid the sum of US$763,068= to Scania South Africa (Pty) Limited representing
the balance of the agreed purchase price between Plaintiff and Defendant.
11. Accordingly, Defendant is indebted to the Plaintiff in
the sum of US$763,068=.
12. Despite demand, Defendant has failed to pay the sum of
US$763,068=.”
On 5 October 2007, the appellant, as defendant, pleaded to
this declaration as follows:
“2. Ad paragraphs 3 up to 5
These are admitted
3. Ad paragraph 6
The Defendant avers that payments were made by it and by
the Government of Zimbabwe which assumed the debt. The balance of the debt
subject to the Plaintiff's claim was accordingly assumed by the Government of
Zimbabwe and if at all no payment was made of that amount, the Plaintiff should
look to the Government of Zimbabwe for the payment.
4. Ad paragraph 7
The defendant avers that it did not cause the withdrawal of
the cash cover from the Metropolitan Bank of Zimbabwe Limited. Alternatively,
if it is found that it did, such withdrawal was made after assumption of the
debt by the Government of Zimbabwe, and, therefore, the Defendant had been
released from payment of the debt. Accordingly, there was no more cause for the
continued retention of the payment by the bank.
5. Ad paragraph 8
The contents of this paragraph are denied in their entirety
and the Plaintiff is put to the strict proof thereof.
6. Ad paragraph 9
This is denied and the Plaintiff is put to the strict proof
thereof. Alternatively, the Defendant avers that even if the agreement provided
for payment denominated in United States Dollars, it is competent for the
Defendant to discharge such indebtedness in Zimbabwean dollars. In the event of
the Plaintiff therefore succeeding in its claim, the Defendant shall tender
performance in the equivalent sum claimed at the official exchange rate
applicable in Zimbabwe as at the date of issue of summons.
7. Ad paragraphs 10 and 11
These are denied and the Plaintiff is put to the strict
proof thereof.
8. Ad paragraph 12
The Defendant admits having refused to make payment to the
Plaintiff given that no payment is due by it to the Plaintiff.”
Sometime in January 2008, the respondent filed a
replication to the appellant's plea. The respondent denied that the debt due to
it by the appellant was effectively assigned to the Government of
Zimbabwe. It averred that its claim
represents the balance of the contract price originally agreed between the
parties and for which the appellant remains liable to the respondent. It
further denied that it released the defendant from its obligation to pay the
full purchase price and maintained that the appellant is liable for the balance
of the purchase price.
On 23 July 2008, the appellant filed an amended plea in
terms of which it made a number of pertinent amendments;
(i) First, that the appellant denied that the agreement of
sale in respect of the buses was entered into between it and the respondent. It
claimed that the agreement of sale was entered into by and between it and
Scania South Africa (Pty) Limited (“Scania”), a South African company which, in
terms of a Distributorship Agreement, nominated the respondent as its local
agent. It averred that while it admitted that the respondent was involved in
the negotiations for the purchase of the buses, the final agreement was entered
into with the respondent's principal, being Scania South Africa (Pty) Limited.
(ii) Second, that the appellant acknowledged the purchase
price to be the sum of US$4,877,000= but being for 48 and not 50 buses as
averred by the respondent in its declaration.
(iii) Third, that the appellant averred that the sum of
ZW$6,200,000,000= deposited with the Metropolitan Bank of Zimbabwe was meant to
be cash cover to which the respondent had access in terms of an agreement
involving the Metropolitan Bank of Zimbabwe, the appellant itself as well as
the respondent as agent for Scania South Africa (Pty) Limited. It averred that
the agreement allowed the respondent access to the said amount for the purposes
of sourcing foreign currency to pay to the seller, Scania.
(iv) Fourth, that both the appellant and the Government of
Zimbabwe made payments to Scania South Africa (Pty) Limited and that the
balance of the debt, the subject of the respondent's claim, was assumed by the
Government of Zimbabwe. Accordingly, if no payment was made, the respondent
should look to the Government of Zimbabwe for such payment. It further averred
that at any rate, the agreement between the respondent's principal, Scania and
the Government of Zimbabwe provided that the last payment made, in the sum of
US$2,900,000= was in full and final settlement of Scania South Africa (Pty)
Limited's claims against the appellant.
(v) Fifth, that it did not withdraw or cause the withdrawal
of the cash cover. It averred that if it was found that it did so, then such
withdrawal was made after the assumption of the debt by the Government of
Zimbabwe whereby it was released from payment of the debt.
Note is taken at this stage that the authorities establish
that the amendment of a pleading procedurally operates retroactively, that is
from the time the pleading was originally issued. See The Civil Practice of the High Courts and
the Supreme Court of Appeal of South Africa,
HERBSTEIN and VAN WINSEN, 5th ed….,.
In its replication to the appellant's amended plea, the
respondent denied the contents of the appellant's amended plea. It averred and
maintained that the agreement of sale was between it and the appellant although
it was known that the supplier of the buses would be Scania South Africa (Pty)
Limited in terms of the underlying Distributorship Agreement between it and
Scania. It further averred that in terms of that Agreement, it was to assume
ownership and risk of buses, and, in turn, sell them to third parties like the
defendant in its own name. The liability to pay Scania South Africa (Pty)
Limited thus remained with it, while the appellant remained liable to pay it
the agreed purchase price.
The appellant also averred that the interventions which
were made by Scania South Africa (Pty) Limited did not novate the original
agreement between the parties and were merely meant to facilitate exchange
control approvals in order to expedite payment. It denied that the debt was
assumed by the Government of Zimbabwe or that it released the appellant from
the obligation to pay the full purchase price. It maintained that it was the
seller in its own right and therefore entitled to claim the balance of the
purchase price from the appellant.
The issues that were referred to trial at the pre-trial
conference were:
(a) Whether or not the Agreement of Sale was between the
plaintiff and the defendant.
(b) Whether or not the defendant was released by the
plaintiff from liability to pay the balance of the purchase price.
(c) In the result, whether or not the defendant is indebted
to the plaintiff in the sum of US$763,068=.
It is common cause that the appellant purchased the buses.
The dispute relates to who the buses were purchased from. The value of the
transaction and the balance owing are not in dispute, but the appellant alleges
that part of the purchase price was compromised by Scania South Africa (Pty)
Limited.
The court a quo was faced, however, with two contrasting
explanations regarding the same transaction.
The court a quo found that the Agreement was between the
appellant and the respondent. It found, as a necessary corollary, that the
respondent never released the appellant from its liability to pay the purchase
price in full. The court a quo therefore found in favour of the respondent…,.
GROUNDS OF
APPEAL
The appellant has appealed to this court on four grounds.
(i) The first ground of appeal is that the court a quo
fundamentally erred in finding that the respondent was the seller of the buses
in issue and was therefore entitled to sue the appellant for the balance of the
purchase price in terms of the Agreement of Sale.
(ii) The second ground of appeal is that the court a quo fundamentally erred in finding that the
compromise agreement entered into between the Government of Zimbabwe and Scania
South Africa (Pty) Ltd on 23 April 2004 did not have the effect of releasing
the appellant from the obligation to pay the balance of the purchase price.
(iii) The third ground is that the court a quo
fundamentally misdirected itself in failing to find that the withdrawal of the
cash cover was not in breach of any agreement since it was done pursuant to the
agreement of compromise of 23 April 2004 entered into between the representatives
of the parties thereto.
(iv) The fourth ground of appeal is that the court a quo
further erred in a material way in finding that the respondent's evidence was
credible and was consistent with the documentary evidence produced when in fact
such evidence contradicted the exhibits produced or was deficient in the
following material ways:
(a) The Agreement of Sale itself was never clearly
identified.
(b) The respondent's witnesses did not produce the order
alleged to have been placed by the appellant with the respondent and the
invoice alleged to have been issued by the respondent to the appellant.
(c) All documents referred to Scania South Africa (Pty) Ltd
as the seller opposed to the respondent.
(d) The respondent's witness, Hamish Bryant Wilburn Rudland,
relied on the cash cover agreements as the Agreements of Sale. This also
contradicted the respondent's pleadings.
(e) All payments were made to Scania South Africa (Pty) Ltd
and not to the respondent.
The appellant contended that the court a quo further erred
in dismissing the application made by the appellant for absolution from the
instance.
THE EVIDENCE
ADDUCED BEFORE THE COURT A QUO
(a) Documentary Evidence
The court a quo admitted the following documents into
evidence;
Exhibit 1 is a 'Distributor Agreement' dated 31 July 2001
between the respondent and Scania South Africa (Pty) Limited. In the agreement,
the respondent was appointed the sole distributor of Scania's products in
Zimbabwe. The respondent would purchase the said products in its own name and
sell them in Zimbabwe. The agreement also provided that Scania South Africa
(Pty) Limited shall have the right to trade directly with clients and
organisations in Zimbabwe. In that event, Scania also undertook to “inform and
reserve justifiable compensation” to the respondent.
Exhibit 6 is a Memorandum of a Tripartite Agreement by the
respondent, the Metropolitan Bank of Zimbabwe and the appellant. The Agreement
is dated 21 January 2003. It records that the Metropolitan Bank provided a
total sum of ZW$4,750,000,000= to be held by the respondent as a guarantee for
the due and faithful performance by the appellant of all its obligations in
respect of the purchase of 32 Scania buses during the course of December 2002
from Scania South Africa (Pty) Limited.
The Memorandum of Agreement further states that Scania
South Africa (Pty) Limited, through the respondent, and the appellant had
entered into an Agreement of Sale whereby the appellant had bought and taken
delivery of the buses specified in Annexure 'A' from the respondent for the
total price of US$3,212,000=. It further states that the Metropolitan Bank, as
financier for the appellant, had paid, on behalf of the appellant, the sum of
ZW$4,750,000,000= to the respondent, which sum was to be held by the respondent
as security for the full payment of the United States dollar price of the
buses. A further balance of ZW$50 million would be paid to the respondent from
Metropolitan Bank.
The Agreement also states that the payment of the purchase
price was to be made by the appellant to Scania South Africa (Pty) Limited,
subject to the necessary foreign currency being made available by the Reserve
Bank of Zimbabwe. Furthermore, the respondent had the right to liquidate all
and any such funds held by it in terms of the Agreement to satisfy in full and
final settlement the full cost of the buses or any other indebtedness, loss or
damage suffered by it as a result of the failure by the appellant to pay US$3,212,000=
to Scania South Africa (Pty) Limited by 30 September 2003.
Another pertinent clause of the Agreement is that in the
event of the appellant effecting payment of all amounts due, the respondent
undertook to pay to the Metropolitan Bank all the money held as security in
terms of the Agreement or any balance thereof.
Exhibit 5 is a Memorandum of Agreement entered into by and
between the respondent and the appellant.
It is dated 30 May 2003 and states, in the preamble, that Scania South
Africa (Pty) Limited had, as of 30 May 2003, provided the appellant with 18
more Scania Torino buses for use in its fleet. Clause (a) states:
“PMC (through Scania S.A.) and ZUPCO hereby have entered
into an agreement of sale in terms of which ZUPCO has agreed to buy, and,
pending payment, taken delivery of the buses specified in the first annexure.
ZUPCO has paid Z$2,700,000,000= to PMC (respondent) which
sum is to be held by PMC as security cash cover for the full payment of US$1,665,000=
for the buses is made to Scania S.A. in terms of this agreement.” (sic)
Clause (b) thereof provides that payment of the purchase
price was to be made by the appellant to Scania South Africa (Pty) Limited in
full on or before August 30, 2003.
Clause 2 of the Agreement makes reference to the
appellant's obligations to Scania South Africa (Pty) Limited.
Clause 3 then states:
“In the event of ZUPCO effecting payment of all the amounts
in foreign currency and due above to Scania SA, PMC undertakes to pay to ZUPCO
all the money held as security hereof or any balance thereof free of any
interest.”
Exhibit 2 is a Duty Free Certificate issued by the Ministry
of Local Government, Public Works and National Housing. It is dated 7 January
2003 and states:
“Approval is hereby granted to Zimbabwe United Passenger
Company (ZUPCO), through its agent, Pioneer Motor Company (PMC), to import 150
Scania buses from Scania South Africa, duty free. Any duties payable would be
borne by the Government of Zimbabwe.”
Exhibit 3 is a letter dated 23 October 2003 from the State
Procurement Board to the appellant's Chief Executive Officer in which reference
is made to 48 buses delivered by the respondent to the appellant.
Exhibit 4 is an agreement dated 23 April 2004 between Scania
South Africa (Pty) Limited and the Reserve Bank of Zimbabwe. The preamble is
couched in the following terms:
“Whereas Scania (SA) (Pty) Ltd sold 48 buses to Zimbabwe
United Passenger Company (ZUPCO)
And whereas an amount of US$3,663,068= is due by ZUPCO to
Scania…,.”
It proceeds to state, inter alia, that Scania South Africa
(Pty) Limited will accept the amount of US$2,900,000= in full and final
settlement of the outstanding amount due by the Zimbabwe United Passenger
Company (ZUPCO) to Scania South Africa (Pty) Limited.
There is no mention made of the respondent in this Agreement.
Oral Evidence
The respondent's first witness was its Chief Executive
Officer, one Mr Rudland.
The essence of his evidence was to the effect, amongst
other things, that the cash cover agreements, exhibits 5 and 6 were the
agreements of the sale of the buses, between the respondent and the appellant.
However, his testimony was permeated by uncertainty as to the details of the
transactions. He contradicted himself in a material respect. At one point he
said that the buses were only delivered after the cash cover agreements, which
he claimed were the agreements of sale, were signed. During re-examination he
changed and said that the two cash cover agreements were signed after the
delivery of the buses.
The respondent's second witness was Scania South Africa
(Pty) Limited's attorney, a certain Mr de Bruin.
This witness conceded that he gave contradicting evidence.
Amongst other things, he spoke of a tender document which he said evidenced the
awarding of a tender to the respondent to supply buses to the appellant. This
document was not discovered or produced or adverted to anywhere else. He also
spoke of an acknowledgment of debt allegedly signed by the respondent in Scania
South Africa (Pty) Limited's favour, supposedly showing that the sale of the
buses was between the respondent and the appellant.
This document was also not placed before the court.
Mr de Bruin also failed to reconcile his evidence that the Agreement
of Sale was between the appellant and the respondent with conflicting
documentary evidence showing that the agreement was between the appellant and Scania
South Africa (Pty) Limited. The first is exhibit 6 which was signed for on
behalf of the respondent by Mr Rudland and it states that Scania South Africa
(Pty) Limited sold the buses to the appellant. The second is the letter of 3
February 2004 to the Governor of the Reserve Bank of Zimbabwe, authored by Mr
Henriksson, the Executive Board member of Scania South Africa (Pty) Limited;
and it also stated that Scania South Africa (Pty) Limited sold the buses to the
appellant.
Neither of the respondent's two witnesses was able to
explain away material clauses in the cash cover agreement that directly
identify Scania South Africa (Pty) Limited and the appellant as the contracting
parties to the sale of the buses.
IS THE COURT
A QUO'S FINDING THAT THE AGREEMENT FOR THE SALE OF THE BUSES WAS BETWEEN THE
RESPONDENT AND THE APPELLANT BORNE OUT BY THE EVIDENCE?
As the parties presented two conflicting or incompatible
explanations for the same transaction, it was incumbent upon the respondent to
prove the agreement on which it based its claim.
The respondent's claim was based on an alleged Agreement of
Sale of buses that it claimed it entered into with the appellant.
The appellant, on the other hand, argued that the agreement
for the sale of the said buses was entered into by and between it and Scania
South Africa (Pty) Limited - and not the respondent.
The cardinal rule on onus is that a person who claims
something from another in a court of law has to satisfy the court that he is
entitled to it. See Pillay v Krishna 1946 AD 946 ….,..
It is also settled that he who alleges must prove. See MB
Investments (Pvt) Ltd v Oliver & Partners 1974 (3) SA 269 (RA).
The respondent's witness' evidence that the cash cover agreements
are in fact the agreements of sale for the buses is not supported by the
evidence and does not bear scrutiny. If the buses were delivered before the
cash cover agreements were respectively signed, then the cash cover agreements
cannot be the agreements for the sale of the buses. It follows, therefore, that
the cash cover agreements cannot be the basis of the respondent's claim against
the appellant.
Mr. Rudland's evidence that the respondent started
delivering the buses after the signing of the agreements runs contrary to the
categorical statement in the Tripartite Agreement, exhibit 6, to the effect
that the appellant purchased the buses from Scania South Africa (Pty) Limited
in December 2002. The witness purported to explain this discrepancy away by
saying it was an “administrative issue.”
It is clear that the cash cover agreements were not the
agreements of sale.
The Duty Free Certificate also helps to shed some light on
the issue. It relates to the importation of buses from Scania in South Africa
by the appellant “through its agent”, the respondent. The question that
immediately arises is why the respondent did not import the buses on its own
and then sell them to the appellant in terms of the Distributorship Agreement
if it was the seller. The question remains unanswered on the evidence adduced
before the court a quo. Rather, the description of the appellant as the
importer creates or leads to the inescapable conclusion that the appellant
purchased the buses from a company beyond the borders.
The appellant could not have imported the buses if it was
buying them from the respondent.
It is also evident from the evidence adduced before the
court a quo that the appellant, at some point, liaised directly with Scania
South Africa (Pty) Limited on issues relating to payment. Scania South Africa
(Pty) Limited's Executive Board Member, one Henrik Henrikson, in a letter dated
3 February 2004, wrote to the Governor of the Reserve Bank of Zimbabwe stating,
amongst other things, that the appellant was indebted to Scania South Africa
(Pty) Limited. Part of the letter reads:
“We address this letter to you in regard to the amount of
US$3,672,068= due and owing by the Zimbabwe United Passenger Company Ltd ('ZUPCO')
to this company. We would like to record the following:
'1. During 2002, an agreement was entered into in terms
whereof this company agreed to supply a fleet of new buses to ZUPCO. We were
informed that ZUPCO is a corporation owned by the Government of Zimbabwe and is
responsible for public transport.
2. It was agreed with officials of ZUPCO that payment of
the purchase price of the buses would be effected in US dollars to be paid by
ZUPCO to this company.'”
There is no mention of the respondent at all in the letter.
It is clear that for all intents and purposes Scania South
Africa (Pty) Limited considered itself as the seller of the buses. There would
otherwise have been no direct dealings with the appellant in view of the Distributorship
Agreement in terms of which the respondent could secure buses from Scania South
Africa (Pty) Limited and thereafter sell them, at a mark-up, in Zimbabwe, in
its own name. Thus, Scania South Africa (Pty) Limited would have dealt with the
respondent and the respondent would, in turn, have dealt with the appellant.
In the letter from Scania South Africa (Pty) Limited's Executive
Board member referred to above, the author clearly sets out when the sale of
the buses took place and how it was done. He states that the initial 32 buses
were delivered in January 2003 and the last 18 were delivered in May 2003. This
differs with the evidence of Mr Rudland who was at pains to explain when the
actual agreement for the purchase of the buses took place, in vain.
On the one hand, Mr. Rudland said that the cash cover
agreements were meant to secure the due performance of the appellant's
indebtedness to Scania South Africa (Pty) Limited. On the other hand, he
changed and said that the cash cover agreements were in fact the agreements of
sale.
I note that the respondent's declaration does not detail
the sequence of events as clearly as does the author of the letter from Scania
South Africa (Pty) Limited. Such failure on the respondent's part tends to dent
the credibility or probability of its version being true. This is particularly
so when such failure is viewed in the light of its claim that the appellant's
failure to honour its obligations to it could drive it into liquidation. Put
differently, in light of such perceived magnitude and importance of the
transaction, the respondent's witness' failure to give adequate detail further
tilts the scale of probabilities against it. It does not lend support to its
claim.
The court a quo found, in part:
“It seems to me that both of the plaintiff's witnesses gave
truthful evidence. Their evidence in court is supported and corroborated by the
documentary evidence produced by the plaintiff. It is clear to me that the
agreement for the sale of the buses was between the plaintiff and the
defendant. The facts show that when the defendant and the plaintiff entered
into an agreement of sale, a separate cash cover agreement was executed to
guarantee due and faithful performance of the defendant's obligations. When the
defendant failed to perform, the Governor of the Reserve Bank intervened and
negotiated directly with the supplier for a settlement of the sums due to the
supplier and implicitly the manufacturer of the buses. This sum did not include
the mark-up to which the plaintiff was entitled both in terms of its business
practice, the Distributorship Agreement as well as the agreement between it and
the defendant.”
The court a quo's finding that there was an agreement of
sale as well as separate cash cover agreements is contrary to the evidence of Mr
Rudland who said that the agreement of sale was the same as the cash cover
agreements.
It is settled that an appellate court will not readily
interfere with findings of fact made by a lower court. In Beckford v Beckford
2009 (1) ZLR 271 (S) the following was stated:
“It is significant that these findings were not challenged
on appeal. In any event, an appellate court would not readily interfere with
findings of fact made by a trial judge…,.”
The law is also settled that such findings can be
interfered with where the conclusions reached by a court are contrary to the
evidence before the court. This was enunciated in TM Supermarkets v Mangwiro
2004 (1) ZLR 186 (S) where the following was stated:
“I am also persuaded by the contention that the court a quo
in this particular respect mis-interpreted the evidence placed before it. This
Court has held, in Reserve Bank of Zimbabwe v Corrine Granger supra that such a
circumstance amounts to a misdirection in law. At p6 of that judgment,
MUCHECHETERE JA stated as follows:
'And a misdirection of fact is either a failure to
appreciate a fact at all or a finding of fact that is contrary to the evidence
actually presented.'
This authority, I find, is apposite in casu. The court a
quo took the view that the responsibility in question entailed simply checking
the resets and not recording the reset numbers. The evidence makes it clear
this was not so. The misdirection of the court is thus evident.”
In casu, the
evidence placed before the court a quo suggests that the cash cover agreements
are not the agreements of sale. The evidence supports the conclusion that the
transaction of the sale of the buses was between the appellant and Scania South
Africa (Pty) Limited with the respondent only coming into the picture at Scania
South Africa (Pty) Limited's instance, and only for the purpose of safeguarding
the due performance of the agreement between the appellant and Scania South
Africa (Pty) Limited. As the cash cover agreements are certainly not the
agreement of sale of the buses, I conclude that the respondent did not proffer
any evidence which substantiates its claim that it transacted with the
appellant in respect of the purchase of the buses.
It thus did not prove that which it had alleged.
The lack of clarity of the respondent's claim and the lack
of particulars of the transaction in its declaration when juxtaposed with the
clarity of the details of the transaction, as stated by Scania South Africa
(Pty) Limited's Executive Board member, clearly show that the probabilities do
not favour the respondent's version. The documentary as well as the oral
evidence before the court a quo point more towards the conclusion that the
agreement for the sale of the buses was concluded between the appellant and Scania
South Africa (Pty) Limited.
Further credence is lent to this probability by the fact
that the documentary evidence placed before the court a quo suggests that the
appellant's obligation to pay the purchase price for the buses was to Scania
South Africa (Pty) Limited. Furthermore, that the Zimbabwe dollar amounts were held
by the respondent so as to ensure the execution of the appellant's obligations
towards Scania South Africa (Pty) Limited. The cash cover agreements record
that the Zimbabwe dollar amounts were to be released upon the appellant's
fulfilment of its obligations to Scania South Africa (Pty) Limited.
The appellant's version is thus further shown to be the
more likely of the two.
Additionally, the respondent's second witness having
testified to some material inaccuracies and to the falsity of some of the details
recorded in the cash cover agreements, it follows that the cash cover
agreements cannot be relied on by the respondent as the basis to establish its
version of the transaction. When confronted with the clear contents of the
letter authored by the Executive Board member of Scania South Africa (Pty)
Limited, this witness persisted in denying that the letter spoke to an
agreement between Scania South Africa (Pty) Limited and the appellant. He
responded:
“It does not say that there is agreement between Scania and
ZUPCO, it says it says it (would) supply buses to ZUPCO.”
The witness thus sought to portray that 'supply' and 'sale'
are different things in the context of the dispute between the parties. The
fallacy of this approach can be and is demonstrated by the fact that such a
stance would mean that the respondent had no cause of action before the court a
quo because its declaration speaks to the 'supply' and not 'sale' of Scania
buses to the appellant.
The totality of the evidence adduced before the court a quo
establishes the following;
(i) First, the respondent's first witness was unsure about
the important details of the transaction.
(ii) Second, the respondent's version does not accord with
the documentary evidence adduced before the court a quo.
(iii) Third, the respondent's witnesses failed to explain
material clauses in the cash cover agreements that directly identified the
appellant and Scania South Africa (Pty) Limited as the respective parties to
the sale of the buses.
(iv) Fourth, the respondent did not discover the documents
which could have clarified or established its position or version.
(v) Fifth, the respondent's second witness said that some
of the information in the cash cover agreements is erroneous.
(vi) Finally, the respondent did not lead evidence from Scania
South Africa (Pty) Limited to clarify issues and disprove the appellant's
defence as alleged in its plea.
The caveat subscriptor
rule sets out that a party is taken to be bound by the ordinary meaning and
effect of the words which appear above its signature; for the other party is
entitled to assume that he has signified his assent to the contents of the
document.
See Mdlongwa v Thembekile Mdlongwa SC98-05; WILLE'S Principles of South African Law 8th
ed..,;, Glenburn Hotels (Pvt) Ltd v England 1972 (2) SA 660 (RAD); Du Toit v
Atkinson's Motors BPK 1985 (2) SA 893; and The Principles of the Law of
Contract, AJ KERR, 4th ed…,.
The cash cover agreements signed between the appellant and
the respondent point to a substantive relationship between the appellant and Scania
South Africa (Pty) Limited; the respondent's relevance only being that of
securing the due and faithful performance of the appellant's obligation to pay
for the buses to Scania South Africa (Pty) Limited….,.
A plaintiff who relies on a contract bears the onus of
establishing that it is binding and enforceable and that what he claims is due.
In this regard, see Tuckers Land and Development Corporation (Pty) Ltd v Loots
1981 (4) SA 260 (T)…,.
Furthermore, the standard of proof in civil matters is on a
balance of probabilities. See Miller v Minister of Pensions [1947] 2 All ER
372-374 where the rule was formulated as follows:
“It must carry a reasonable degree of probability but not
as high as is required in a criminal case. If the evidence is such that the
tribunal can say 'we think it more probable than not', the burden is
discharged, but if the probabilities are equal, it is not.”
In West Rand Estates Ltd v New Zealand Insurances Co Ltd
1925 AD 245…, the following was stated:
“It is not mere conjecture or slight probability that will
suffice, the probability must be of sufficient force to raise a reasonable
presumption in favour of the party who relies on it. It must be of sufficient
weight to throw the onus on the other side to rebut it.”
On a proper analysis of the evidence adduced before the
court a quo, the respondent did not meet the requirements set out by the
authorities. Its case is not compelling. The court a quo placed emphasis on the
credibility of the respondent's witnesses but in reality their version does not
tally with the evidence on record at all. The finding by the court a quo that the agreement of sale was between
the appellant and the respondent is thus not supported by the evidence placed
before that court.
DISPOSITION
The respondent did not prove that the transaction of the
sale of the buses was between it and the appellant. Consequently, the question
of whether or not Scania South Africa (Pty) Limited compromised the balance
owing does not arise.
The appeal has merit and must succeed. Costs will follow
the event.
In the result, it is ordered as follows:
1. The appeal succeeds with costs.
2. The order of the court a quo is hereby set aside and
substituted with the following:
“The Plaintiff's claim is dismissed with costs.”
