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IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 2017/2274

Not reportable

Not of interest to other judges

Revised.

14 December 2017

In the matter between:

SAXENI EQUIPMENT (PTY) LIMITED                                                                      Plaintiff

and

ANGLOGOLD ASHANTI LIMITED                                                                       Defendant

JUDGMENT

ADAMS J:

[1]. In this action the plaintiff claims payment from the defendant of the sum of R7 980 000, together with mora interest thereon and cost of suit. The action is founded on an agreement of purchase and sale of a 55 Ton SANY SRC550R Rough Terrain crane (‘the crane’). The agreement, which was partly written and partly oral, was concluded between the parties during or about May 2016 at Boksburg, and in terms of the agreement the plaintiff sold to the defendant the crane at an agreed purchase price of R7 980 000.

[2]. The plaintiff’s claim for the said agreed purchase price is against a tender by it to deliver the crane to the defendant. The written part of the agreement consisted of an ‘official offer’ dated the 11^th May 2016 sent to the defendant by the plaintiff by email and a purchase order dated the 12^th of May 2016 from the defendant to the plaintiff, as well as a brochure which relates specifically to the crane and titled ‘SRC550H Rough – Terrain Crane 55 Tons Lifting Capacity – SANY’, which was sent to the defendant under cover of an email from the plaintiff dated the 14^th of March 2016, which is the date on which the very first offer was made by the plaintiff. The email read as follows: ‘Please note the attached quote for SRC550H. I have attached the brochure for the SRC550H. The load chart on page 8 bottom right shows the lifting load to pick and carry. … Should you have any questions, please feel free to contact us’.

[3]. The defendant disputes liability for the purchase price of the crane on the basis that the plaintiff delivered to it a crane which was not the same as the one they had purchased. Alternatively, the defendant avers that the sale agreement was vitiated by a material misrepresentation on the part of the plaintiff, which induced them to enter into the contract.

[4]. Before me Mr Steyn appeared on behalf of the plaintiff and Mr Dalrymple acted for the defendant.

[5]. The very crisp issue which I need to decide is a factual one relating to whether or not the parties had agreed to the purchase and sale of a crane which had the capacity to ‘pick and carry’ a load of up to 18 ton. ‘Pick and carry’ is a technical term in the context of the operations of cranes and refers to a crane lifting a load of a particular tonnage and to carry that load by driving the crane from one point to another. ‘Pick and carry’ is to be contrasted with the operation of crane in a static position with its ‘outriggers’ extended and placed, which increases the load capacity, except that more space is required and the crane is not mobile when its outriggers are extended and placed. The bigger the ‘pick and carry’ load capacity, the better.

[6]. It is the case of the defendant that, notwithstanding the fact that the written portion of the agreement, especially the load charts in the brochure, specify that the ‘load and carry capacity’ of the crane, with a working range of 6m, is approximately 10 ton, the agreement was that they would be sold a crane with its capacity at 18 ton ‘pick and carry’, with a working range of 6m. This, so it was contended for on behalf of the defendant, is borne out by the facts in the matter and the circumstances leading up to the conclusion of the agreement.

[7]. It requires emphasising that the case of the plaintiff is that it sold to the defendant a SANY 55 Ton Rough Terrain crane with an 18 ton ‘pick and carry’ load capacity only if the range is limited to 3m. If the range is increased to 6m, then the load carry capacity is reduced to about 10 ton. The plaintiff’s case corresponds in all respects with the written part of the agreement. In other words, if regard is had to the offer which the plaintiff made and which was accepted by the defendant, the plaintiff had delivered to the defendant exactly what it had sold to the defendant in terms of the agreement of sale.

[8]. The defendant claims that the written portion of the agreement does not reflect the agreement reached between the parties. The agreement between the parties, so the defendant avers, was concluded on the basis it specifically required a crane for purposes of moving specific pieces of equipment from the workshops into mineshafts in rather limited spaces. The plaintiff’s attention was specifically drawn to the type of equipment which the defendant intended transporting and moving with the crane, and it was explained to the plaintiff that, because of the limited space, the crane was required to ‘pick and carry’ 18 tons. Accordingly, the agreement was that the plaintiff would supply exactly that type of crane.

[9]. During or about March / April 2016, that is prior to the purchase and sale of the crane, defendant's representatives had opportunity to observe and assess the operation of the same make and model crane at the Kusile Power Station. After having so viewed and seen the crane in action, the defendant was seemingly satisfied that it wanted to acquire that particular type of crane.

[10]. It was an express term of the agreement, as contained in the acceptance of the order, being the purchase order from the defendant, that a ‘final quality assessment release inspection was required’ to be done by the defendant, before the crane would be accepted by it. This term, so it was contended for by the defendant, implies that the defendant was entitled to inspect and test the Crane in order to establish whether or not it met the ‘18 - Ton specification’. If not, so the argument went on behalf of the defendant, it had the right to reject the crane based upon the inspection. There is no merit in this contention for the simple reason that the intention with this term was clearly to deal with the quality of the product in general terms and not with reference to specifics.

[11]. In the main, the defendant’s contention was that if the crane was incapable of meeting the ‘18 Ton specification’, it was entitled to reject the Crane, cancel the order and would not be liable to pay the purchase price.

[12]. Both parties presented oral evidence in support of their cases. As I indicated above the plaintiff’s case, as supported by the evidence of its salesperson who negotiated the deal, one Mr Otto (‘Otto’), was simply that the contract was for the sale of the crane as described and specified in the documents which form the basis of the agreement of sale, notably the brochure, which described the crane exactly as sold to the defendant. The evidence on behalf of the plaintiff was furthermore that the defendant was given ample opportunity to inspect and see the product they were buying and what it was capable of. They were at liberty at all times during the period when they were negotiating the deal and deciding on what it is they wanted to buy to bring in their own experts and test the capabilities of the machine.

[13]. The defendant led evidence in relation to the factual matrix and the context in which the contract was concluded. One Mr Isak Du Plessis (‘Isak’) testified that he worked in the vertical transport division at the defendant’s Mponeng Mine. His evidence was that they required a new crane for purposes of transporting and moving between the workshop and the mine shafts heavy duty equipment and machinery such as ‘skips’, cages, winders, mine vehicles, as well as trackless moving machines, referred to as ‘TMMs’. His evidence was that what they required was a Crane with the capability and capacity to ‘pick and carry’ 18 Ton, with a range radius of 6m. This, so Isak testified, was explained to the plaintiff’s representative, Otto, who understood their requirements and undertook to source a machine for them and that he would revert in due course. They even showed Mr Otto photographs of the type of machinery and equipment which would be transported by the crane. They emphasised the need to be able to operate and manoeuvre the crane in limited spaces, hence the requirement that the crane should be able to lift 18 Ton on ‘its tyres’, which was another way of referring to the load being ‘picked and carried’.

[14]. These pieces of equipment were demonstrated by the defendant to Otto, by reference to electronic photographs, as being very large pieces of equipment with big and wide ranging dimensions. The evidence of Isak was also to the effect that up to a point in time shortly before they went looking for a new crane, the mine owned an old 1968 PNH Rough Terrain crane with a carrying capacity of 45 tons. Otto was familiar with this crane as he had at some point in time assisted them with the replacement of a part of that crane. The defendant used that crane for a long time to ‘sling’ heavy equipment on the bank on its tyres without outriggers. This was important to the defendant since there is limited space at the shaft entrance on the bank. There is simply not enough space to extend the outriggers.

[15]. Mr Otto, during his evidence, had confirmed that he was familiar with the 1968 PNH Crane. In his words, that crane was a ‘good lifter’. He conceded that the PNH had a better range radius than the SANY Crane. This, the defendant submitted, is evidence which confirms their version that Otto knew exactly what the defendant required, and that he had agreed to source them a Crane which complies with those specifications.

[16]. In sum, the evidence on behalf of the defendant was aimed at demonstrating that it had very specific requirements relative to the new Crane which they intended acquiring. They conveyed those requirements and specifications to Mr Otto, who undertook that he would source and supply to them a Crane as per their specifications, which he subsequently failed to do.

[17]. It was against that background, so the evidence went, that the defendant required a new crane. The defendant needed to replace the old PNH crane with a crane that could at least perform its functions – indeed do better – ‘pick and carry’ an 18 Ton load. The requirements were very specific – very large objects like skips, cages and TMMs (the latter weighing 15.4 tons) were required to be slung off the bank into the mine shaft in a narrow, limited space. It was for these reasons that the defendant needed a crane with ‘the 18 - Ton specification’. The last thing the defendant needed was a Rough Terrain Crane that could only lift 18 Ton with its outriggers extended and placed.

[18]. Mr Dalrymple, Counsel for the defendant, submitted it is against the aforegoing background, as testified to by the defendant’s witnesses, that the clauses relating the ‘quality assessment to be conducted before delivery’ should be interpreted. Mr Dalrymple submitted that on a proper interpretation of the agreement, once the Crane arrived, and before accepting it, the defendant was entitled to inspect and test it so as to ensure that it met its own quality requirements. In other words, it was not simply bound to take the Crane. It was entitled to test the Crane and reject it if it desired, based on its inspection. I am not persuaded by this argument, which, in my view, puts the cart before the horse. The point is this: the background as sketched by the defendant’s evidence is not common cause. It is the subject of a dispute between the parties, which dispute I am required to adjudicate.

[19]. Mr Isak du Plessis testified that he told Mr Otto that the defendant required a crane that could pick, lift and carry a weight of 18 Tons, and, as indicated above explained to Otto that the Crane would be required to lift and move heavy duty machinery, which were demonstrated to him with reference to certain photographs. All of this was denied by Mr Otto. He denied in particular that he was shown photographs.

[20]. Isak confirms that during the run up to the offer being made, Mr Otto had produced and shown them the relevant brochure, which correctly and accurately described the Crane to be sold. In fact, the defendant was specifically referred to the applicable load chart, which, if read, would have made it crystal clear to the defendant that they are purchasing from the plaintiff a Crane which cannot do what they supposedly indicated to Otto they required it to do. It was the evidence of the defendant’s witnesses that Otto, who specifically drew their attention to the load chart, then disingenuously told them that the Crane could do what it clearly could not. I find this rather interesting especially if regard is had to the concession by the defendant’s witnesses that they had every confidence in the integrity of Mr Otto, whom they had known as a reliable crane expert for many years. What is, in my view, even more telling, is Mr Otto’s response to the suggestion that he ‘misled’ the defendant into buying the Crane which was not suitable for their purposes. He genuinely seemed taken aback by this intimation. If he had been told that they required an 18 Ton ‘pick and carry’ Crane, so he stated during his evidence, he would have walked away from the deal.

[21]. The evidence for the defendant was that neither of its representatives had read or paid any attention to the load charts on the brochure. They allege that they trusted Mr Otto as he was the expert and they relied on what he had told then about the capabilities of the Crane and what is could do. In that regard, it was the evidence of Mr Otto that he explained to the defendant that the Crane would be able to lift an 18 Ton load with the outriggers extended. He gave and referred them to the brochure and took them through the rating charts relating to the ‘pick and carry’ capacity of the Crane.

The Law

[22]. The dispute between the plaintiff and the defendant is a factual one, and to a certain degree a matter of interpretation of the written portion of the agreement.

[23]. It is trite that the principles applicable to the interpretation of written documents finds application, namely that the primary meaning of the document must be determined from the language in accordance with the well – known rules of interpretation.

[24]. I have before me two mutually destructive versions relating to whether or not the contract was concluded on the basis that the plaintiff would sell and supply to the defendant a Crane that could ‘pick and carry’ an 18 Ton Load, with a range radius of 6m.

[25]. The plaintiff’s version is supported by the objective documentary evidence of the written portion of the agreement, as well as the viva voce evidence of Mr Otto. The defendant relies only on the oral evidence of its witnesses.

[26]. It must be decided whether, on all the evidence, the plaintiff's version is more probable than that of the defendant.

[27]. In Stellenbosch Farmers' Winery Group Ltd and Another v Martell and Others, 2003 (1) SA 11 (SCA) at para 5, the Supreme Court of Appeal explained how a court should resolve factual disputes and ascertain, as far as possible, where the truth lies between conflicting factual assertions:

‘To come to a conclusion on the disputed issues a court must make findings on:

(a) the credibility of the various factual witnesses;

(b) their reliability; and

(c) the probability or improbability of each party's version on each of the disputed issues.

In light of the assessment of (a), (b) and (c), the court will then, as a final step, determine whether the party burdened with the onus of proof has succeeded in discharging it. The hard case, which will doubtless be a rare one, occurs when a court's credibility findings compel it in one direction and its evaluation of the general probabilities in another. The more convincing the former, the less convincing will be the latter. But when all factors equipoised probabilities prevail’.

[28]. Also in National Employers' General Insurance Co Ltd v Jager, 1984 (4) SA 437 (ECD), at 440D-441A the court remarked as follows:

‘It seems to me, with respect, that in any civil case, as in any criminal case, the onus can ordinarily only be discharged by adducing credible evidence to support the case of the party on whom the onus rests. In a civil case the onus is obviously not as heavy as it is in a criminal case, but nevertheless where the onus rests on the plaintiff as in the present case, and where there are two mutually destructive stories, he can only succeed if he satisfies the court on a preponderance of probabilities that his version is true and accurate and therefore acceptable, and that the other version advanced by the defendant is therefore false or mistaken and falls to be rejected. In deciding whether that evidence is true or not the court will weigh up and test the plaintiff's allegations against the general probabilities. The estimate of the credibility of a witness will therefore be inextricably bound up with a consideration of the probabilities of the case and, if the balance of probabilities favours the plaintiff then the court will accept his version as being probably true. If however the probabilities are evenly balanced in the sense that they do not favour the plaintiff's case any more than they do the defendant's, the plaintiff can only succeed if the court nevertheless believes him and is satisfied that his evidence is true and that the defendant's version is false.

This view seems to me to be in general accordance with the views expressed by Coetzee J in Koster Ko-operatiewe Landboumaatskappy Bpk v Suid-Afrikaanse Spoorweë en Hawens (supra) and African Eagle Assurance Co Ltd v Cainer (supra). I would merely stress however that when in such circumstances one talks about a plaintiff having discharged the onus which rested upon him on a balance of probabilities one really means that the court is satisfied on a balance of probabilities that he was telling the truth and that his version was therefore acceptable. It does not seem to me to be desirable for a court first to consider the question of credibility of the witnesses as the trial judge did in the present case, and then, having concluded that enquiry, to consider the probabilities of the case, as though the two aspects constitute separate fields of enquiry. In fact, as l have pointed out, it is only where a consideration of the probabilities fails to indicate where the truth probably lies, that recourse is had to an estimate of relative credibility apart from the probabilities’.

[29]. Also, in Govan v Skidmore, 1952 (1) SA 732 (N), the following principle was enunciated:

‘In finding facts or making inferences in a civil case, it seems to me that one may, as Wigmore conveys in his work on evidence … by balancing probabilities select a conclusion which seems to be the more natural or plausible conclusion from amongst several conceivable ones, even though that conclusion may not be the only reasonable one.’

Applying the law in this matter

[30]. I reiterate that I have before me two mutually destructive versions. The version of the plaintiff is irreconcilable with that of the defendant. Accepting the one means of necessity a rejection of the other.

[31]. The one aspect of this matter which weighs heavily on my mind is an issue relating to the probabilities. I find it hard to believe that Mr Otto, who was described by the defendant’s witnesses as a reliable person, could conduct himself in such an unscrupulous manner. On the version of the defendant, Mr Otto had conned the defendant into buying a Crane which was not able to meet its requirements. There appears to exist no conceivable reason for such conduct. It seems so unnatural and artificial and therefore inherently improbable. I have also above alluded to the issue relating to the fact that the version of the plaintiff corresponds one hundred percent with the objective documentary evidence. Moreover, I find it incredulous that Mr Otto would enter into a multimillion rand deal and run the risk of it being cancelled, at great expense and cost to his employer of many years and at an even greater expense to his reputation in the industry, only because he had misled the buyer. Equally unconvincing is the claim by the defendant’s representatives that they concluded an agreement on a basis at variance with the written agreement without them confirming such other terms and conditions in writing – there is not one single piece of written correspondence from or to them confirming their very specific requirements.

[32]. I am furthermore of the view that, on the probabilities, the defendant’s representatives did not consider the specific requirements until after the Crane had been delivered to them. They then realised that there may have been other specifications which they ought to have insisted on prior to ordering the crane. They then resolved to resile from the contract ostensibly on the basis that it was not what they ordered. It is unlikely that they would have concluded an agreement which is at variance with the written instrument.

[33]. Applying the principles in National Employers' General Insurance Co Ltd v Jager (supra), I am of the view that the probabilities in this matter favour the plaintiff. I say so for the above reasons.

[34]. In my view, and having regard to the above considerations and the probabilities in their totality, the version of the plaintiff is more probable than that of the defendant. Therefore, as per the dicta in the National Employers' General Insurance Co Ltd v Jagers matter (supra), I am satisfied that the plaintiff’s evidence is true and that the defendant’s version is false. The plaintiff has, in my view, discharged the onus on it to prove the agreement as pleaded by it.

[35]. Plaintiff’s claim should therefore succeed.

Costs

[36]. The plaintiff has been successful with its claim against the defendant. This means that, applying the general rule, it is entitled to a cost order.

[37]. I can see no reason to deviate from the general rule and cost should therefore be awarded in favour of the plaintiff.

Order

In the circumstances, I grant judgment in favour of the plaintiff against the defendant for:

1. Payment of the sum of R7 980 000.

2. Payment of interest on R7 980 000 at the rate of 10.5% per annum from the 7^th September 2016 to date of payment.

3. Cost of suit.

_________________________________

L ADAMS

Judge of the High Court

Gauteng Local Division, Johannesburg

 

HEARD ON:	4th, 5th & 6th December 2017
JUDGMENT DATE: FOR THE PLAINTIFF:	14th December 2017 Adv J S Steyn
INSTRUCTED BY:	Couzyns Incorporated
FOR THE DEFENDANT:	Adv T Dalrymple
INSTRUCTED BY:	Knowles Husain Lindsay Incorporated

 

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