GOWORA JA: After hearing
counsel in this matter, we allowed the appeal with costs and issued an order in
the following terms:
“IT IS ORDERED THAT:-
- The appeal succeeds with
costs.
- The judgment of the court a quo is
set aside and substituted with the following:
“The application is hereby granted
in terms of the draft order.”
We intimated that our reasons would
follow in due course. These are they.
The
appellant, hereinafter referred to as (“Portland”) and the second respondent
hereinafter referred to as (“Bak Logistics”) are private companies duly
registered as such under the laws of this country. Portland is a producer
of cement which is sold both locally and externally. Bak Logistics
provides warehousing and bulk storage services to the general public.
The first respondent, hereinafter
referred to as (“Tupelostep”) is a company registered under the laws of South
Africa. It has its headquarters in that country. It provides
extensive haulage freight services throughout Southern Africa.
At the beginning of 2012,
Portland obtained orders for the export of cement to Mozambique. Sometime
in February or March 2012, Portland engaged Tupelostep to arrange the
transportation of cement into Mozambique on its behalf. The terms of the
contract obliged Portland to convey the cement to Tupelostep by rail. In
turn, Tupelostep would arrange for the storage of the cement pending receipt of
export documents from Portland. In order to comply with its obligations
under this contract, Tupelostep entered into an agreement with Bak Logistics
for storage and warehousing of the cement pending its conveyance to
Mozambique. On receipt of clearance documents from Portland, Tupelostep
would then arrange for the transportation of the cement by road. The
process would, on occasion, entail the hire of vehicles from third
parties. There was however, no contract between Portland and Bak
Logistics, and Portland was not privy to the contract between Tupelostep and
Bak Logistics.
In September
2012 Portland transported a consignment of 1 270 tons of cement to Tupelostep
by rail. It was stored with Bak Logistics. A dispute then arose
between Portland and Tupelostep regarding charges claimed by the latter in the
discharge of its obligations and services under the contract. The parties
attempted to settle the dispute but failed. In December 2012 Tupelostep
advised Portland that it would no longer allow movement of stock from the
warehouse unless it was paid certain sums of money being claimed by it for
demurrage and transportation costs.
On 16
January 2013 Portland gave notice to Tupelostep of its intention to terminate
the mandate for storage and transportation of the cement. On 29 January
2013, Portland addressed an email to Tupelostep demanding the release to it of
documentation availed to Tupelostep in respect of the consignment of cement
under its control and in the possession of Bak Logistics. In turn,
Tupelostep responded by refusing to release the documents in its custody for a
number of reasons which are not germane to the resolution of this
dispute. On 4 February 2013 Portland filed an urgent application with the
High Court in respect of which it sought relief expressed as follows:-
INTERIM RELIEF GRANTED
- Pending determination of this matter, the Applicant is
granted the following relief;
- That 1st and 2nd Respondent be
and are hereby ordered to release to applicant the applicant's cement
being 1 270 tons of cement held by 1st and 2nd
respondent at 2nd respondent's premises at 106 Dartford Road,
Willowvale Industrial Area, Harare.
- That the proceeds of sale of the cement be held at a
trust account in the law firm of Messrs Gill, Godlonton & Gerrans of
7th Floor, Beverly Court 100 Nelson Mandela Avenue.
TERMS OF THE FINAL ORDER SOUGHT
That you show cause to this
Honourable Court, if any, why a final order should not be made in the following
terms:
- That the proceeds of the cement held by Messers Gill,
Godlonton & Gerrans in their trust account be disbursed in terms of an
order of this Honourable Court confirming the entitlement of either party
to such proceeds.
- That the costs of this application be borne by the
party succeeding in the anticipated litigation between the parties.
(sic)
The
application was opposed by both respondents. The High Court heard the
parties on the question of urgency and decided that the application was not
urgent. The court then dismissed the application with costs on the basis
of lack of urgency. This appeal is against that decision.
It was
contended that the High Court erred in the exercise of its discretion and that,
to that extent, it had misdirected itself.
Portland approached the High Court
for urgent relief on the premise that Tupelostep was holding on to cement which
belonged to the former and that its actions were illegal and unjustified. It
was also alleged in the certificate of urgency that cement by virtue of its
hygroscopic nature had a limited lifespan and that any continued delay in its
release to Portland would result in financial loss to Portland. Whilst
accepting that commercial interests can be advanced as a basis for urgency, the
learned judge in the court a quo found that the urgency in the matter
before him was self-created. This is what the learned judge stated:-
“I am however persuaded by counsel
for respondents' argument that the urgency pleaded by the applicant is
self-created. In the first place it was not denied that the cement has been
with the respondents since September 2012. If therefore, cement has a short
shelf life why did the applicant not seek its release much earlier? Secondly,
the argument that it tends to attract moisture is as relevant now as it was
from the onset of the rainy season. The need to act was ever present from the
onset, taking into account the nature of the product that is in dispute. In
other words, the matter cannot assume more urgency towards the end of the shelf
life of a product whose delicacy has never been in doubt.”
It seems to
me that the court a quo determined the matter on facts which were not
before it. The consignment of cement was sent to the ware house in
September 2012, but the record shows that there was movement of stocks from the
warehouse without hindrance. The problem arose on 16 January 2013 when
Tupelostep wrote an email to Portland advising that a halt had been placed on
the movement of the product from the ware house on its instructions. That
is when in fact the need to act arose and not in September 2012 as stated by
the learned judge in the court a quo. This fact is confirmed by
the opposing affidavit filed on behalf of Tupelostep in which the statement is
made that:
“up until 15 January 2013 the first
respondent never prevented the removal of cement.”
It is therefore accepted by
Tupelostep that cement was being moved up until that date. If Portland had the
right to remove cement up until that date, it follows that the need to act
cannot by any stretch of the imagination have arisen prior to that date.
In its judgment, the court accepted that what triggered the application was the
negation on 31 January 2013 of an agreement by the parties allowing the removal
of the cement by Portland. The application was filed on 4 February 2013,
a mere four days after the agreement was negated by Tupelostep. The suggestion
that the cement should have been removed in September 2012 is therefore not
supported by the record as the storage in September was for purposes of
facilitating its transportation. The storage was part and parcel of the
modus operandi of the contract by the parties. I am satisfied that the
matter ought to have been dealt with on the basis of urgency. No delay
had been established on the respondents' papers.
Portland
also alleged urgency on the premise that cement had a limited shelf life and
that any delay in access to the product for purposes of sale would result in
economic loss. Whilst accepting that the law recognised economic loss as
a factor for urgency, the court rejected an argument for the granting of relief
on this basis on the grounds that the cement had been with Tupelostep and Bak
Logistics since September 2012 and that its release should have been sought
earlier. Again, the learned judge fell into error in his assessment of
the evidence before him. The Court placed reliance on the date when the
consignment was sent to Bak Logistics and fell into the error of regarding that
date to be the time at which it should have sought its removal from
storage. The court a quo failed to appreciate that the cement was
destined for export orders and that any failure on the part of Portland to
deliver would cause it harm in the eyes of its external customers.
In addition, the refusal to release
export documents would place Portland at cross purposes with the exchange
control authorities through its failure to acquit CD1 export forms. These
factors although adverted to in the application were not dealt with by the
court a quo.
Tupelostep
is a peregrinus, a fact which was not disputed before the court a quo.
It was contended on behalf of Portland that the fact that Tupelostep is
resident in South Africa would tend to complicate issues as the suit would have
be instituted in that country. It was contended further that
in the event that it was sued in this country, any judgment
obtained as a result would have to be registered there. All this entails
a lot of litigation and the remedy of damages then becomes theoretical.
The court a quo however felt persuaded that there was an
alternative remedy available to Portland and consequently there was no urgency
to the application.
The practical difficulties attendant
upon such a process for recovery should have been obvious to the court. The
failure by the court to appreciate these factors was a clear misdirection
warranting the interference by this Court with the exercise of its
discretion.
However,
over and above these criticisms, the High Court, having decided to determine
the matter on the issue of urgency, dismissed the application on the basis that
it was not urgent. This was not the proper course to follow. Instead, it
should have removed the matter from the roll on the basis that it lacked
urgency. Such a course would have left the door open for the appellant to place
the matter before the court for determination as an ordinary court
application. In Madza & Ors v The Reformed Church in Zimbabwe
Daisyfield Trust SC 71/14, ZIYAMBI JA remarked as follows:
“However, having concluded the
matter was not urgent, the proper course would have been to remove the matter
from the roll of urgent matters to allow the appellants, if so minded, to place
the matter before the High Court on the ordinary roll for determination. The
order of dismissal was improper in the circumstances.”[1]
I respectfully associate myself with
the dicta by her Ladyship. It follows that the dismissal of the
application for want of urgency is improper.
It is also contended on behalf of
Portland that, in addition to this, the court fell into further error by
commenting on the merits of the case. It is contended that even if this
court were to remit the matter for hearing before the High Court a plea of res
judicata could be successfully raised by the respondents. I agree, in
Purchase v Purchase 1960 (3) SA 383, CANEY J had this to say:[2]
“… He submitted that that dismissal
of an application had the effect of an absolution; he likened that to dismissal
of an action, which is an absolution from the instance. Becker v Wertheim,
Becker and Leveson, 1943 (1) P.H. F 34 (A.D.). I am disinclined to agree
with him, for I think that dismissal and refusal have the same effect, namely a
decision in favour of the respondent.”
This principle was approved in African
Farms & Townships v C.T. Municipality 1963 (2) S.A 555 by STEYN
C.J where he stated as follows:[3]
“Counsel for the appellant
further argued that the order in the original proceedings, which as such is an
order dismissing the application, is to be equated with absolution from the
instance, leaving the issue undecided. In my view there is no substance in that
argument. As Sande, De Diversis Regulis ad L 207, points out, the
res judicata is not so much the sentia, the sentence or the order made, as the
lis or negotium, the matter in dispute or question at issue about which the
sentia is given, or the causa which is determined by the sentia judicis. As
pointed out in Purchase v Purchase, 1960 (3) SA 383 (N) at p 385,
dismissal and refusal of an application have the same effect, namely a decision
in favour of the respondent. The equivalent of absolution from the instance
would be that no order is made, or that leave is granted to apply again on the
same papers. In Commissioner of Customs v Airton Timber CO Ltd, 1926
CPD 351 at p 359, WATERMEYER J, draws a distinction between the
actual judgment and the reasons for judgment, and the question is not
necessarily determined by the judgment, the matter is not res judicata.”3
Being a
Court of Appeal, this Court cannot interfere with the exercise of judicial
discretion by a lower court except in very limited circumstances. Counsel
for the parties in this case have advocated two approaches to the manner of
determining the appeal. The approach favoured by Mr Mpofu is set
out in Crouch v Dube 1997 (1) ZLR 427 (S). AT 436d-437F KORSAH JA
described it as follows:
“Learned counsel were in agreement
that the remedy provided under r 359 was of a discretionary nature, but they
differed as to the category of the discretion which the court of first instance
exercised under r 359. The reason for their disagreement is exemplified in the
following statement by STEGMAN J in Tjospomie Boerdery (Pty) Ltd v
Drakensberg Botteliers (Pty) Ltd 1989 (4) SA 31 (T) at 351-36H:
“… when the exercise of a
discretionary power by a court of first instance is taken on appeal, the court
of appeal is faced with at least two distinct tasks. The first task relates to
the general characterisation of the discretionary power in question in the
case. The purpose is to determine whether the function of the court of appeal
is to re-examine any aspect which the parties may seek to re-argue on the
existing record; or whether such court's function is limited to an enquiry into
the question whether the court below exercised its discretion judicially. When
that task of characterisation has been performed, the second task (if it arises
at all) relates to the examination of the particular exercise of the
discretionary power by the court of first instance, and the decision whether or
not to interfere with it. The nature of such second task varies according to
the characterisation of the discretionary power in terms of the first task.
There are at least two categories to
one or other of which the discretionary powers exercised by courts of first
instance may be assigned. The first of such categories relates to matters
having the character of being so essentially for determination by the court of
first instance that it would ordinarily be inappropriate for a Court of Appeal
to substitute its own discretionary power for the exercise thereof decided on
by the court of first instance. The first matters identified as falling within
this category were those discretionary powers that related to a judge's control
of the conduct of the business in his own court. Later the first category was
broadened to include certain other discretionary powers.
The second category relates to
matters having the character of being equally appropriately determinable by the
court of first instance and the court of appeal.
When a particular discretionary
power has been found to be of the character which places it in the first
category, the court of appeal has no jurisdiction to substitute its own
exercise of discretionary power for that decided upon at first instance unless
it has been made to appear that the exercise of the power at first instance was
not judicial. That can be done by showing that the court of first instance
exercised the power capriciously or upon a wrong principle or with bias or
without substantial reasons.
When a particular discretionary
power has been found to be of the character which places it in the second
category, the court of appeal has jurisdiction to substitute its own exercise
of the discretion for that decided upon at first instance without first having
to find that the court of first instance did not act judicially. Sufficient
reason for the court of appeal to do so must be shown, but the reason need not
reflect on the judiciality of the decision at first instance. The court of
appeal may interfere on the simple basis that it considers its own exercise of
the discretionary power to be wiser or more appropriate in the
circumstances.”
Mr Uriri
however has placed reliance on Barros & Anor v Chimphonda
1999 (1) ZLR 58 (S). At p 62F-63A, the learned GUBBAY CJ stated:
“The attack upon the determination
of the learned judge that there were no special circumstances for preferring
the second purchaser above the first – one which clearly involved the exercise
of a judicial discretion, see Farmers' Co-operative Society (Reg.) v Berry 1912
AD 343 at 350. These grounds are firmly entrenched. It is not enough that the
appellate court considers that if it had been in the position of the primary
court, it would have taken a different course. It must appear that some error
has been made in exercising the discretion. If the primary court acts upon a
wrong principle, if it allows extraneous or irrelevant matters to guide or
affect it, it if it mistakes the facts, if it does not take into account some
relevant consideration, then its determination should be reviewed and the
appellate court may exercise its own discretion in substitution, provided always
it has the materials for so doing.”
The
substance of the principles in the authorities relied upon by both counsel is
the same. What was at issue in the lower court was whether or not the
court, in the exercise of its discretion, considered the application placed
before it to constitute urgency justifying the matter being heard and
determined outside the normal roll. In the case of Crouch v Dube
(supra) it was held by the court that this category of exercise of discretion
by an appeal court cannot be interfered with unless it has been made to appear
that the exercise of the power at first instance was not judicial. Both
counsel are agreed that the case in point is not one where the Appeal Court is
in as good as the court of first instance of being equally able to determine
the matter and substitute its own discretion for that of the court of first
instance. An appeal court cannot interfere with an exercise of judicial
discretion unless it can be shown that some error was made in the exercise of
that discretion or that the court acted on a wrong principle or allowed
extraneous or irrelevant material to guide or affect its decision.
Although
purporting to dismiss the application on the basis that it lacked urgency, the
court a quo did make pronouncements on the merits of the application.
At p 2 of the judgment the learned judge states:
“A perusal of the papers convinced
me that there was no basis for granting the interim relief sought and I
declined to set the matter down.”
Later on in the judgment at page the
learned judge again comments on the merits of the application and states:
“I would have held the same in the
present case save that the reasons advanced for seeking interim relief cannot
be sustained.”
And later at p 3:
“If the respondents are owed
substantial sums of money by the applicant they would be entitled to a right of
retention over the applicant's goods. There is nothing unlawful about such
retention as claimed by the applicant. It seems the applicant is basing
illegality on the respondents' refusal of the security that is being offered.
But, as contended by Mr Uriri no adequate security arrangements have
been made by the applicant. For example, he highlighted that security
equivalent to the value of the goods is far less than what is owed to the
respondents. He further pointed out that there has not been payment of
transport costs acknowledged by the applicant.”
As a consequence of the comments by
the learned judge as to the merits of the dispute, I am not persuaded by the
argument advanced by Mr Uriri that the learned judge in the court a
quo did not deal with the matter on the merits. The judgment has
specific findings on the merits of the application, which findings are not
confined to the issue of urgency. The judgment speaks to the security
being offered by the applicant being less than what is allegedly owed as
transport costs. It mentions that no costs had been paid even though the
sum due was acknowledged by the applicant.
It is for
the above reasons that the court determined that the appeal had merit and
granted the same with costs.
ZIYAMBI JA:
I
agree
OMERJEE
AJA:
I agree
Gill, Godlonton &
Gerrans, appellant's legal practitioners
Muza & Nyapadi, respondents' legal practitioners
[1] At p 8 of
the cyclostyled judgment
[2] At p
385A-B
[3] At
p 563D-G
