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:
1.
The appeal succeeds with costs.
2.
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;
1.
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.
2.
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:
1.
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.
2.
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 warehouse 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 warehouse 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
SC71/14, 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.”
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:
“… 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) SA 555 by STEYN CJ where he stated as follows:
“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 p385,
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 p359,
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 Rule 359 was
of a discretionary nature, but they differed as to the category of
the discretion which the court of first instance exercised under Rule
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 p62F-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 p2 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 p3:
“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 p8 of the cyclostyled judgment
2.
At p385A-B
3.
At p563D-G
