MAKARAU JP: The claim in this matter was filed against
the first defendant in March 2005. Trial
commenced in October 2008 and has spanned over some 18 months. The cumulative
delay between the time of the filing of the summons and the handing down of
judgment is a record five years. The telling point though is that there is no
letter of complaint from the plaintiff over the time it has taken to get this
matter finalized.
It
may be pertinent at this stage to note that at conclusion of the trial of the
matter in March 2009, but before counsel had made their closing submissions, Mr Fitches for the plaintiff indicated
that he intended to make an application for joinder, to join to the proceedings
Total Zimbabwe (Private) Limited, as second defendant. This was to enable the
plaintiff to get satisfaction of whatever judgment I may hand down in its favor
from the second defendant as it emerged during the trial of the matter that the
first defendant disinvested from Zimbabwe in or about 2006 and sold all its
assets to the second defendant. I postponed the hearing of the matter to enable
the plaintiff to file and serve the intended application on all parties.
After
the application for joinder to be filed and served, the second defendant filed
a special plea, alleging that the plaintiff's claim had prescribed.
At
the resumption of the hearing of the matter, it emerged that the first defendant
had no objections to the proposed joinder which I accordingly granted. Both
parties also indicated that they did not wish to call for or lead any further
evidence in the matter. I then called for submissions from counsel. Written submissions
were only filed on 8 April 2010, hence the unusual delay in the handing down of
this judgment.
The Claim
The
plaintiff issued summons against the defendant on 16 March 2005, seeking an
order compelling the defendant to deliver to it 522 763litres of diesel. In the
declaration, it was alleged that the parties had an oral agreement in terms of
which the defendant would supply diesel to the plaintiff. It was further
alleged that over a period stretching from July 2000 to December 2002, the
plaintiff ordered and paid for 2,398 000 litres of diesel from the defendant
and that in breach of the agreement between the parties, the defendant
delivered 1, 875 237 litres only, leaving the balance that forms the subject of
the claim. In the alternative, the plaintiff claimed the sum of two billion
ninety-one million and fifty two thousand dollars ($2,091,052,000-00), being the
market value of the diesel allegedly not delivered.
The
claim was defended.
In
the main, while accepting the arrangement between the parties, the defendant
averred that it had delivered all the diesel that the plaintiff ordered and
paid for, thus putting the onus squarely on the plaintiff to prove the alleged
shortfall.
The Evidence.
At
the trial of the matter, the plaintiff called one Webster Nhamo Dongo as its
first witness. At the time he testified, he was the plaintiff's Purchasing Manager.
In that position, he was responsible for all the purchases of the plaintiff,
including that of fuel. At the time of the transactions between the parties
giving rise to the claim, he was the Senior Purchasing Officer. He and the then
plaintiff's Purchasing Manger set the transaction up with the defendant.
The
witness gave a detailed account of the processes involved that were involved in
the transactions between the parties from the generation of a pro forma invoice
through to the delivery of the product. He also testified that an audit carried
out by the plaintiff revealed the shortfall that forms the plaintiff's claims.
Under
cross-examination, the witness conceded that the parties had an arrangement
whereby the plaintiff could collect the ordered fuel on its own. To the best if
his knowledge, however, this had never happened. This question followed up on
his evidence that the shortfall alleged by the plaintiff arose from a
comparative study of the fuel that was delivered to the plaintiff by the
defendant an as captured on its internal documents called "goods received
vouchers" against the orders that the plaintiff had placed with the first
defendant.
In
my view, the witness gave his evidence well. He testified mainly as to the
general relationship between the parties. These are issues that are largely
common cause between the parties. He did not attempt to reconcile the orders
against the deliveries, reserving this for the second witness. It is my further
view that he fared well under cross-examination. I have no reason to disbelieve
him.
Next
to testify on behalf of the plaintiff was one Caspa Mangwiro, the plaintiff's
Materials and Logistics Officer. During the relevant period, he was responsible
for monitoring the fuel that was delivered to the plaintiff's depots. He
investigated the matter of the alleged shortfall in the diesel delivered by the
defendant. In carrying out this investigation, he compiled the telegraphic
transfers that reflected payment for the fuel ordered together with the
invoices that the plaintiff received from the defendant. He obtained
information from the plaintiff's various depots concerning the deliveries made.
He then reconciled the pro forma invoices against the deliveries to come up
with the shortfall.
It
was his testimony that for each delivery received, the plaintiff would raise a
goods received voucher. This was done by the store's person at each of every
plaintiff's depots throughout the country.
The
witness adduced into evidence as exhibit "1", a summary of the reconciliation that
he did for all the plaintiff's depots. He compiled the exhibit personally. In
compiling this exhibit, he used invoices from the defendant and copies of
telegraphic transfers from the plaintiff's bank on one hand and, the goods
received vouchers from the plaintiff's depots and the delivery notes from the
defendant on the other. These mismatched to the extent of the shortfall.
Finally,
the witness adduced into evidence fifteen flat files. In each file was the pro-forma
invoice and proof of payment made on that invoice. These fifteen files related
to fifteen
of the nineteen transactions that the parties
conducted over the period in question. In respect of the remaining four
transactions, the witness testified that the files had gone missing.
Under
cross- examination, the witness admitted that the plaintiff could at times
collect diesel from the defendant. He testified that he had not prepared a schedule
showing any such collections and that these did not form part of his
reconciliation. He also admitted that at one stage the plaintiff ordered diesel
on behalf of its chairman but could not confirm whether delivery of such fuel
had been effected directly to him by the defendant, in which case, such
delivery would not be captured on any goods received voucher issued by the
plaintiff.
The
witness also confirmed that whilst he had these documents in his possession, he
had not adduced into evidence the goods received vouchers for a number of the
plaintiff's depots that received delivery of diesel from the defendant.
Also
under cross-examination, the witness was shown an assessment that had been
carried out by the defendant on the documentation relating to two depots of the
plaintiff. The assessment revealed that a total of 38 000 litres delivered to
the plaintiff had not been captured in plaintiff's schedule. This, he
conceded. He also conceded that that the
summary of transactions that he had compiled may not be entirely correct
When
it was suggested to him in cross-examination that he did not complete the
reconciliation in that orders that were made in December 2001 could have been
delivered in January or February 2002, he testified that he went by a certain cut
off date and that diesel delivered after the cut -off date, if any, was not
taken into account. The cit off date as captured on the reconciliation schedule
is 31 December 2001.
The
witness impressed me as a measured man. He gave his evidence very slowly and
took time to verify figures and information from his volumes of files.
Understandably, he had to rely on his records for details of the transactions
between the parties as the transactions were many and were for the period 2000
to 2001, some seven years before the trial. Any shortcoming that I find in his
evidence is not a reflection on his credibility but an attack on the integrity
of the records he had to use and the record keeping system that was employed by
the plaintiff at the time.
After
this witness, the plaintiff closed its case.
The
first defendant called one Benjamin Matanda as its only witness. He is employed by the second defendant as
Customer Care Manager. At the relevant time, he was employed by the first defendant
in the same capacity. He is familiar
with the business relationship and arrangements that obtained between the plaintiff
and the first defendant. To the best of his knowledge, the defendant delivered all
the diesel that the plaintiff ordered from it. The deliveries wee completed in
early 2002. Again according to his knowledge, some of the invoices were not
paid on by the plaintiff. These are however included in the plaintiff's
schedule as outstanding deliveries.
The
witness also testified that the defendant carried out an independent
investigation into the matter of the alleged short deliveries and examined
ledger cards availed to it by the plaintiff. From his personal examination of
the ledger card relating to Bindura depot, he established that the total volume
of diesel delivered as recorded on the plaintiff's reconciliation schedule for
this depot was understated. The same was found to be true for Gokwe and Kadoma
depots.
The
witness also compared the documents that he had for the Chinhoyi depot and
found that 77 000 litres of diesel that had been delivered to the depot was not
captured and recorded in plaintiff's reconciliation schedule. He did not agree
with the suggestion by Caspa Mangwiro on behalf of the plaintiff that such
diesel had been mis-recorded on the ledger card as the invoice numbers appear
to have dropped by one digit. He testified that it was quite normal for one
customer to pick up the same volume of diesel twice a day on two different but
consecutive invoices as delivery depended on the configurations of the delivery
truck.
Under
cross- examination, the witness parried all questions put to him with
ease. I did not notice any hesitation on
his part in responding to any of the questions. Generally, I gained the
impression that the witness was honest. I shall rely on his evidence.
After
the evidence of this witness, the first defendant closed its case.
Prescription.
The
first issue that arises in this matter is whether or not the plaintiff's claim
against the second defendant has prescribed.
The
first defendant did not raise the issue at all.
In
resisting the plea, the plaintiff has sought to rely on the provisions of
section 16 (3) of the Prescription Act [Chapter 8.11], which reads:
"(3) A
debt shall not be deemed to be due until the creditor becomes aware of the
identity of the debtor and of the facts from which the debt arises:
Provided
that a creditor shall be deemed to have become aware of such identity and of
such facts if he could have acquired knowledge thereof by exercising reasonable
care."
It has been submitted on behalf
of the plaintiff that the identity of the second defendant as a debtor was unknown
to the plaintiff until the trial of this matter when the disposal of assets by
the first respondent to the second respondent was disclosed.
In his submissions on the plea,
Mr Chinake makes out the case that the plaintiff's cause of action against the
first defendant has prescribed. As stated above, it is not necessary that I
determine whether this is so as the plea of prescription has been filed by the
second defendant only. I cannot determine the issue in respect of the first
defendant mero motu and outside of the pleadings between the
parties..
The issue that has exercised my
mind in this matter is whether the same facts that can sustain a plea of
prescription against the first respondent can be relied upon by the second
defendant.
It is common cause that the
second defendant has been cited as a defendant before me as the successor in
title to the first defendant. No culpability is alleged against the second
defendant which has been joined in the proceedings merely to enable the
plaintiff, if successful, to obtain satisfaction of its judgments against the
assets of the second defendant, formerly owned by the first defendant.
It appears to me that
ordinarily, the defences that are available to the first defendant are also
available to the second defendant. In fact, it appears to me that on the merits
of the matter, the second defendant has no independent defence to offer as it
did not transact with the plaintiff prior to its taking over of the first
defendant's assets and business in 2006. It also appears to me quite clear that
had the first respondent successfully raised the issue of prescription, this
would have equally shielded the second defendant. It is the reverse of the
situation that I need to determine in this matter.
It appears to me that the
second defendant cannot rely on the facts that would have sustained a plea of
prescription against the first defendant as the causes of action that the
plaintiff has against each defendant, whilst the same, arose on different
dates. Whilst it may be correct that the plaintiff's cause of action against
the first defendant arose in or about December 2001 when the last invoice was
made out between the parties, as submitted by Mr Chinake, the same is not true or correct with regards to the
second defendant. As was observed by
LEWIS JP in Street v Evans 1977 (3)
SA 950 (RA) at 951,
"When dealing with the question of prescription, one has to
ask oneself what is it that is being prescribed. What is being prescribed is
one's right to sue. The right to sue depends on having a cause of action which
has accrued to one,..."
It presents itself clearly to
me that the plaintiff's right to sue the second defendant only accrued in March
2009 during the trial of the matter between the plaintiff and the first
defendant when the disposal of assets to the second defendant was revealed.
Prior to that revelation, the plaintiff had no cause of action against the
second defendant as it was unaware of its identity and of the facts that would
make the second defendant liable for the debts of the first defendant. Prescription against the second defendant can
only have commenced running from the date of the disclosure. It was then
successfully interrupted by the joinder of the second defendant to these
proceedings.
Again in arriving at the
conclusion that I do, I am guided by the remarks by GREENLAND J in Hodgson v Granger and Another 1991 (2)
ZLR 10 (HC) at 16 to the effect that the whole purpose of the Prescription Act
and other statutes of limitations is to penalize the dilatory creditor but not
a creditor who is unaware, through no fault of his own, of the cause of action
at his disposal.
On the basis of the foregoing,
I would dismiss the plea of prescription as against the second defendant.
Whether the
defendant failed to deliver all the diesel that the plaintiff ordered.
In
my view, the above represents the sole issue that falls for determination in
this trial. It is not legal a legal issue strictu
sensu. It is a reconciliation issue. It is my further view that the
exercise of reconciling what can be proved to have been ordered and what can
prove to have been delivered could effectively have been done by the parties'
logistical officers prior to trial. It is an issue that should have been
settled at pre-trial conference had all parties effectively played their role
in the matter.
In
essence, the plaintiff is alleging a short delivery of the diesel that it ordered
and paid for. To prove its case, all the plaintiff had to do was to set up its
paper trial, showing the order, proof of payment on that order and the deliveries
received against that order, thereby revealing the alleged non- delivery of the
diesel duly ordered and paid for. This may sound simple and in my view it is indeed
a simple exercise where proper and comprehensive records are kept of all
transactions of this nature, something that I expected an establishment of
plaintiff's stature to do.
It
became apparent however during the trial that the plaintiff did not keep a comprehensive
paper trail of each order of diesel made from date of order to date and place
of delivery. What the plaintiff sought to do at the trial was to show a general
deficiency between the total of all orders allegedly made and deliveries
received without necessarily showing which particular orders were paid for but
were not received at all or were received in part.
In
my view, having chosen to show a general deficiency, the plaintiff bore the
onus of showing accurately what it is that it had ordered and paid for, to
establish the opening entry of the account as it were. Having done so, it still
would have borne the onus of proving what was delivered, again accurately, to establish
the closing entry of the account, thereby revealing the deficiency claimed. Anything
short of this would be fatal to its claim.
It
is trite that a general deficiency cannot be proved without first proving what
was due even if one can accurately prove what has been received.
During
the trial, the plaintiff's second and key witness conceded that the plaintiff did
not have a full set of documents relating to four of the transactions listed in
its summary of transactions as the files for these transactions had gone
missing. As indicated above, he only adduced into evidence fourteen files
instead of nineteen. The transactions for which no documents were adduced into
evidence relate to invoices number 8 dated 2 April 2001, number1039 dated 4 May
2001, invoice number 1061 dated 4 May 2001 and invoice number 13861 dated 10
December 2001. There was no evidence adduced before me in respect of these
transactions to show that either the order had been made or that payments had
been made in respect of the orders. All I had was the evidence of the witness
that these wee valid transactions for which he could not produce supporting
documents.
The
issue that arises is to what extent the court can rely on second hand hearsay
evidence to prove a fact that a contemporaneously made document ought to have
proved.
It
appears to me that where a document was made contemporaneously with a
transaction, recording that transaction, that document and that document alone
is the only admissible evidence of that transaction. Any first hand hearsay
evidence purporting to give the details of the transaction is inadmissible.
It
is the general rule that no evidence is admissible to prove the contents of a
document other than the original document itself. The authors LH Hoffman and DT
Zeffertt in the South African Law of Evidence (4th Ed), page 390, refer
to this general rule as one of the most important surviving remnants of the
best evidence rule. As with any general rule, there are a number of exceptions
to this rule but these are in my view, of no application in this case. The
plaintiff seeks by oral evidence of its second witness, to prove what was
contained in various documents that have since gone missing. The witness
purported to testify on orders for diesel that had been placed seven years ago.
Such evidence is inherently unreliable especially in view of the fact that some
of the documents whose contents he purported to testify on were still awaited
from the plaintiff's bank. He had not even seen the document. It may not exist.
Even assuming that he had at some time seen the documents he seeks to testify
on, his recollection of what he saw on the documents constitute inadmissible
hearsay evidence as to the contents of the documents as he was not the author
of any of the documents in issue.
I
may have been inclined to accept the oral evidence of the witness that he saw
some documents that prove that some transactions occurred between the parties
but such documents are no longer in his possession. It is another thing for me
to accept the oral evidence of the witness to prove the contents of the missing
documents.
In
view of the fact that the plaintiff could not prove that it ordered or paid for
the diesel in the four transactions under dispute, it cannot be said that the
first defendant failed to deliver such diesel.
The total of the diesel in the four disputed
transactions is 338 000litres. I would have simply deducted this amount from
the plaintiff's total claim were I satisfied that the plaintiff has accurately
proven before me what diesel it received from the first defendant. I am not.
The
plaintiff did not produce before me all the source documents from which it concluded
that there had been a shortfall in the delivery of the diesel that it had
ordered. It is common cause that the plaintiff compiled its reconciliation from
the goods received vouchers generated by its depots. Not all of these vouchers
were produced before the court. All I have is the oral evidence of the
plaintiff's witnesses testifying as to the quantity of the diesel allegedly
received by the plaintiff. Such oral evidence is not the best evidence of
delivery as each delivery was recorded in a document that was made
contemporaneously with the delivery. I would even venture to suggest that such
evidence is hearsay as the witnesses did not make any of the entries that are
allegedly on the vouchers.
Further
and in any event, assuming that the oral evidence of the plaintiff's witnesses
is admissible, the accuracy of the figures given by the witnesses is in doubt.
It
is common cause that the parties had an arrangement whereby the plaintiff could
collect some of the diesel directly from the defendant. In this event, some
other document and not a "goods received voucher" would be generated. The first
witness testified that whilst he was aware of the arrangement, he was not aware
of any collections that the plaintiff may have made. The second witness again admitted
knowledge of the arrangement and testified that he had not taken these into
account when he did his reconciliation. He did not prepare a schedule of such
collections, which according to him, were done by the plaintiff's Muzarabani
and Glendale
depots.
It
was also not in dispute that one of the transactions had been for and behalf of
the plaintiff's chairman. The invoice indicated that delivery would be effected
to him. It was not clear from the plaintiff's evidence whether such delivery
had been effected directly to the chairman, in which event there would be no
goods received voucher generated.
As
indicated above, the issue before me is one of reconciling two entries in an
account that must balance at the end of the exercise. It is an accounting issue
to be resolved on the basis of what the records reveal and not on the basis of
the credibility of the witnesses who testified before me. Where the relevant records
are incomplete, the calculations cannot be done on the speculative basis of
what the witnesses say.
On the basis of the above, it is my finding that the plaintiff has failed
to prove the accurate quantity of diesel that it ordered from and paid for. It
has also failed to prove that the diesel that it ordered was not all delivered.
In the result, I make the following order:
- The defendant is absolved from the instance.
- The plaintiff shall meet the defendant's costs of
suit.
Dube Manikai & Hwacha, plainitff's legal practitioners.
Kantor &
Immerman, defendant's legal practitioners.