---

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

REPUBLIC OF SOUTH AFRICA

 

(1)    REPORTABLE: YES/NO

(2)    OF INTEREST TO OTHER JUDGES: YES/NO

(3)    REVISED

Case Number: 25801/2013

4/3/2020

 

In the matter between:

 

YORK TIMBERS (PTY) LTD                                                                                      Plaintiff

 

And

 

INTERNATIONAL INDUSTRIAL BROKERS CC t/a INDUSTRY                        Defendant

INTERNATIONAL

JUDGMENT

JANSE VAN NIEUWENHUIZEN J

[1]        The plaintiff has Instituted a warranty of eviction claim against the defendant in terms of which it claims payment of the amount of R 1 150 000, 00, interest and costs.

[2]        The claim pertains to a stitching machine (''the machine; which the plaintiff allegedly purchased from the defendant.

[3]        It is common cause that Singisi Forest Products (Pty) Ltd, being the owner of the machine, instituted a rei vindicatio against the plaintiff, which claim led to the plaintiff being dispossessed of the machine.

[4]        The only issue In dispute Is whether the defendant sold the Machine to the plaintiff.

 

BACKGROUND

[5]        The facts underlying the plaintiff's claim are mostly common cause.

[6]        A company known as H M Plywood (Pty) Ltd ("HM") was liquidated during 2010. Some of HM's equipment was financed by the Industrial Development Corporation of South Africa Ltd (“IDC”) and a Notarial Special Collateral Bond ("Notarial Bond") was registered over the equipment as security for the loan.

[7]        Pursuant to HM's liquidation, ICC perfected the Notarial Bond and took possession of the equipment. The asset list in the Notarial Bond reads as follows:

 

"Debarker

Boiler

Peeling line

Drier

Veneer prep

Pressing Line

Sending Line

Packing line

Panelsizer

Glue Bulk Room

Glue Kitchen

(Details deleted)

 

[8]        These items were purchased by the defendant and advertised for resale.

[9]        The plaintiff was interested in the equipment and upon enquiry received an asset list from the defendant containing the same assets as those contained in the Notarial Bond. A letter accompanying the list did, however, indicate that the Debarker and Chipper machine were no longer available.

[10]     On 23 June 2011 Heinrich Nell ("Nell"), the group engineer of the plaintiff and Oscar Tait ("Tait"), the operational manager of the plaintiff attended the site in Kokstad were the equipment was kept to inspect the equipment. During the inspection Linton Roberts ("Roberts"), a director of the defendant was present.

[11]       The machine and a dust extractor were on site but did not form part of the assets on the list.

[12]       Negotiations proceeded and on Friday, 1 July 2011 after 17:00 in the afternoon, Nell forwarded an offer to Roberts.

[131    The offer was signed by Roberts on Monday, 4 July 2011 and the plaintiff proceeded to remove the equipment, including the machine from the Kokstad site.

 

EVIDENCE

[14]      Several witnesses testified on behalf of both the plaintiff and defendant and their evidence will be dealt with insofar as it pertains to the merits of the Issue in dispute. In respect of the quantum of the plaintiff's claim only one witness testified and his evidence will be dealt with separately.

 

Merits

[15]      Nell testified that during hi$ first Inspection of the equipment on 23 June 2011 he noticed the machine and a dust extractor which were not on the list of assets that were for sale. Nell testified that the plaintiffs Sable plant did not have a stitching machine and in his opinion the machine would greatly enhance the plant. The plaintiff also required a larger dust extractor at Its Sable plant. Upon his return to Sable he telephoned Roberts and informed him that the plaintiff considers making an offer on the equipment on condition that the machine and dust extractor form part of the equipment.

[16]      Roberts informed him that the dust extractor may be added to the items, but that he will need to investigate the position in respect of the machine. Nell requested Roberts to update the asset list and Roberts undertook to get someone in his office to attend thereto.

[17]      On 27 June 2011 Nell received an email from a certain Judy in the defendant's employment. An asset list was attached to the email and the list was amended to include the dust extractor. The contents of the email read as follows:

"Heinrich.

Removed debarker, but not sure about chipper as h Is not clearly marked. Will ask Lynton when he comes Into the office."

 

[18]     Nell testified that Roberts phoned him in the late afternoon of the 1^st of July 2011, to enquire whether the plaintiff is still prepared to make an offer on the equipment. Roberts indicated that the defendant was pressed for time and needed to know what the plaintiff's Intentions were. Nell confirmed the plaintiff's stance that the machine must form part of the assets that were for sale. Roberts agreed that the machine could be added to the items for sale and due to the fact that the defendant's employees had already left, requested Nell to amend the asset list to reflect such.

[19]      Subsequent to the telephonic discussion; Nell amended the asset list by printing the words "Complete Boiler Excluded from Offer" over the Boiler item and inserting the machine. The offer and amended list were emailed to Roberts.

[20]     The offer reads as follows:

 

"We refer to the various discussions between the parties regarding the purchase and sale of certain equipment in connection with Merensky Kokstad. The seller warrants that It is the owner of the assets and the purchaser wishes to make an offer to purchase the assets as listed in the11st which is attached and marked A (listed assets) on the following terms:

1.        The purchase price for the listed assets is Two Million Five Hundred Thousand Rand, which is payable against delivery by electronic funds transfer free of deduction and set off into the bank account nominated in writing by the seller.

2.        On the date of delivery and before payment, the purchaser will first inspect the listed assets and if all the listed items are present and in a reasonable condition acceptable to the purchaser, take delivery thereof.

3.        The purchaser will take delivery of the listed assets at the Merensky Kokstad premises by removing the listed assets from their foundation at the factory floor and elsewhere on the premises on or before 31 August 2011.

4.        This offer is open for acceptance by the seller by signing at the foot of this letter In the space provided therefor and by returning it to the purchaser by no later than twelve o'clock, Monday morning, 4 July 2011, failing which this offer shall lapse and be of no further force and effect. "

 

[21]     The offer was accepted and signed by Roberts on behalf of the defendant on 4 July 2011.

[22]       On 4 July 2011 Nell and three colleagues proceeded to Kokstad to inspect the equipment that was bought by the plaintiff. They met with Steward Henderson (“Henderson") of the defendant and Inspected the site to make sure all the equipment was present. The following day the plaintiff proceeded with dissembling and transporting the equipment to its plant in Sabia. The machine was the first item to be removed from the Kokstad site.

[23]       Towards the end of July 2011 and after the machine was already installed at the plaintiffs Sabie site, the problem with the ownership of the machine came to light.

[24]       During cross-examination it was put to Nell that Roberts will deny that he agreed during the telephonic conversation with Nell that the machine will form part of the assets to be sold. Roberts will furthermore deny that he requested Nell to include the machine In the asset list. It was put to Nell that both Roberts and Henderson will testify that the plaintiff's employees were prohibited by a security guard at the Kokstad site to remove the machine. Nell denied this.

[25]       It was finally put to Nell that he did not have consent to add the machine to the list, which Nell denied. Nell indicated that it was unsure whether the plaintiff would have made an offer if the machine was not Included.

[26]     Tait testified next and confirmed that he was present at both Inspections on 23 June 2011 and 4 July 2011. Tait testified that he was the project manager and that he had to supervise the dismantling and transport of the equipment from Kokstad to Sable. Tait testified that at the time he was not aware of any problems with the removal of the equipment. It was put to Tait that he had a meeting with Henderson on 27 July 2011 at which meeting he admitted that that the machine was not on the asset list that was in Henderson's possession. Tait denied this.

[27]      That concluded the evidence on behalf of plaintiff on the merits of its claim.

[28]      Henderson was the first witness to testify on behalf of the defendant. Henderson testified that he and Roberts each held 50% of the shareholding In the defendant. The defendant has been purchasing and selling equipment for the past 18 years and is well known in the industry.

[29]      During June 2011, he was contacted by one Mohammed Sooliman from IDC in respect of the possible purchase of the assets listed in the Notarial Bond. The defendant made an offer to IDC in respect of the listed assets which offer was accepted. Henderson testified that he met a certain Willem Coetzee ("Coetzee•) of Merensky Holdings, who was tasked with the liquidation of HM to determine which Items at the site formed part of the assets contained in the Notarial Bond. Certain items on site did not form part of the assets purchased by the defendant and on 4 July 2011 Henderson made an offer to purchase the following additional items at a purchase consideration of R 115 000, 00:

"2x Compressors@ Kokstad

1 x Stitching machine

1 x Miscellaneous Scrap In and around Containers."

 

[30]      Henderson testified that he deemed all the aforesaid items as scrap and thought the defendant could make a profit if it purchased the items for R 115 000, 00 and thereafter sold it as scrap.

[31]      Henderson's offer was rejected by Coetzee on 11 July 2011.

[32]      Henderson was referred to an email addressed to him by Nell on 9 August 2011 which reads as follows:

"Morning Stuart,

As you have seen yesterday on she, we have completed removing all the equipment as per our agreement within the specified time.

No damage was done to the building during the project as I have showed you yesterday and the only contractor still on site is your contractor disassembling the boiler and boiler pipes in the building.

Will you please just reply to this mail confirming the above statements?"

 

[33]      Henderson's reply on the same day reads as follows:

 

"Heinrich

 

Yes, your guys have done well removing all the equipment in 4 weeks. Well done.

 

I spoke to Mohammad (IDC) about th8 edge Joinder and he will be sorting out something there."

 

[34]      It Is common cause that the “Edge Joinder" refers to the machine. Henderson testified that he received a phone call from Coetzee on a Saturday evening at 19:00 during July 2011. He cannot recall the exact date, but estimates that it must have been between the 12^th to the 15^th of July. He was informed by Coetzee that employees of the plaintiff are removing the machine from the site. Henderson immediately phoned Nell, but could not get hold of him. Henderson left a message for Nell informing him that a site meeting must be held on the Monday at 10:00.

[35]     Tait attended the meeting on the Monday which was held on the factory floor at the Kokstad site and confirmed that the machine did not form part of the items bought from JDC. Henderson told Tait that the plaintiff must return the machine. Henderson phoned Mohammed in the presence of Tait and informed Mohammed that a problem has arose due to fact that the plaintiff had removed the machine which did not form part of the assets purchased from ICD. Henderson told Mohammed that he must make sure that he gets the machine back. Mohammed told Henderson that he will sort the problem out because he has equity in both the plaintiff and HM.

[36]       Henderson was referred to an email sent by Coetzee to Mohammed on 15 June 2011 confirming that the stitching machine did not form part of the assets listed in the Notarial Bond. Henderson testified that he met with representatives of the plaintiff at the Kokstad site at 21:00 on the evening of 4 July 2011. A certain Mr van Zyl who was present on behalf of the plaintiff pointed the machine out and Henderson immediately informed him that the machine was not part of the purchased assets. He Indicated to Van Zyl that he had made an offer for the machine earlier that day and should the offer be accepted; the plaintiff Is at liberty to make an offer for the machine. this version does not accord with Henderson's earlier version that the defendant made an offer on the machine in order to sell it as scrap.

[37]       Henderson insisted during his evidence that only the assets listed in the Notarial Bond were sold to the plaintiff.

[38]       During cross-examination Henderson was referred to a chronology of events sent by him to the defendant's attorneys at the time. Henderson confirmed that he was satisfied with the contents of the document. Several aspects emerged from the document. Henderson stated that the asset list attached to the written offer forwarded by Nell on 1 July 2011 was in a much smaller font. In the result and according to Henderson, Roberts did not notice the inclusion of the machine on the asset list when he countersigned acceptance of the offer. I pause to mention that the asset list attached to the written offer does not support Henderson's version that a smaller font was used.

[39]       The following paragraph of the document was also brought to Henderson's attention:

"On Saturday 25 July 2011 at approxlmat6/y 19:00 Mr Coetzee phoned me saying that York had removed the stitching machine from site. We agreed to meet on site In Kokstad the following Monday 27 July 2011. At this meeting, It emerged that the stitching machine was one of the very first Items removed from site and that there had been an altercation between some Yom employees and the on-site security. The respective paperwork was presented to members of both Yom and Merensky. Mr Mohammad Suleiman of the I.D.C was Informed of this Issue with regards to the removal of the stitching line. "

 

[40]     It was put to Henderson that the chain of events described by him does not correspond with the fact that the machine was already removed between 8 and 10 July 2011. Henderson answered that he might have had the incorrect dates. What is telling from the paragraph is Henderson's failure to refer to Tait's so-called admission that the machine was not part of the purchased items and further that Tait will ensure that the machine is returned.

[41]      It was pointed out to Henderson that notwithstanding his insistence that only the assets listed in the Notarial Bond were sold to the plaintiff, the asset list sent by Judy on behalf of the defendant on 27 June 2011 to Nell included the dust extractor. Henderson could not explain this and merely stated that the list was prepared by Judy.

[42]      Henderson was referred to the asset list attached to offer and when the portion excluding the boiler was pointed out to him, he confirmed that the boiler was sold to another entity on or about 20 June 2011. Henderson could not explain how it was possible that Nell would have known that the boiler was no longer available if a conversation between Nell and Roberts pertaining to the aS8et list did not take place before the list was amended by Nell.

[43]      Henderson admitted that he was not part of the negotiations between Nell and Roberts that preceded the written offer.

[44]      It was pointed out to Henderson that his email of 9 August 2011 congratulating Nell on a job well done, does not correspond with his stance that the plaintiff illegally removed the machine from the Kokstad site. Henderson could not give a satisfactory explanation for his conduct at the time.

[45]     Lastly, Henderson confirmed that it was In the defendant's Interest to sell all assets purchased by It as soon as possible to avoid the incurring of removal, transport and storage costs.

[46]     The next witness who testified was Judy Meadows (“Judy”). Judy testified that she was employed by the defendant as an administrative administrator at the relevant time. Judy confirmed that the asset list received from IOC was retyped to include the dust extractor. This was done on the Instructions of Roberts.

[47]       Judy confirmed that she saw the email sent by Nell on 1 July 2011 on the Monday morning of the 4^th of July 2011. She printed the email and asked Roberts to sign the offer. Judy testified that she realised that the asset list attached to the offer was amended by deleting the boiler. She, however, did not notice that the machine was added to the list.

[48]       Shortly thereafter Judy changed her testimony and. stated that she did not peruse the email she printed on 4 July 2011. She was not even sure if the asset list was attached to the email. On further questioning she stated that she only realised much later that the list had been amended.

[49]     During cross-examination Judy confirmed that she would have printed all the documents attached to Nell's email.

[50]     Roberts testified next, Roberts emphatically denied that he instructed Nell to add the machine to the asset list. Roberts confirmed that Nell told him that the plaintiff wished to purchase the machine. Roberts testified that he undertook to put in an offer on behalf of the plaintiff to purchase the machine from Merensky. This version was never put to Nell.

[51]     When Roberts was referred to the offer made by Henderson to Coetzee on 4 July 2011, he confirmed that it was the offer made on behalf of the plaintiff. His version does not correspond with Henderson's version that the offer was made in order to enable the defendant to sell the Items as scrap.

[52]       Roberts was referred to the offer signed by him on 4 July 201'i. Roberts confirmed that the offer was for R 2 500 000, 00 and testified that he signed the offer because Henderson was not available. Roberts testified that the asset list attached to the offer was exactly the same as the asset list in the Notarial Bond. When confronted with the fact that the asset list accompanying the offer differs from the Notarial Bond asset list, Roberts testified that he was not aware that an asset list was attached to the offer. Roberts further testified that had an asset list been attached, · he would have initialled each page of the asset list.

[53]       I pause to mention that it was never put to Nell that the offer was not accompanied by an asset list Roberts· , upon further questioning, denied that he saw the asset list when he signed the offer and testified that he saw the asset list for the first time in counsel's chambers whilst preparing for trial.

[54]       During cross-examination it was put to Roberts that the offer specifically refers to the items on the asset list attached to the offer. Roberts could not explain why he would sign an offer that refers to an asset list without first perusing the asset list.

[55]       Upon further questioning Roberts changed his version and testified that the asset list that was sent by Judy to Nell on 27 June 2011 was attached to the offer. When it was put to Roberts that the list could not be the same because the boiler was clearly excluded from the offer, he merely stated that he does not know why the boiler was excluded.

[56]     Roberts admitted that he Spoke to Nell late on the afternoon of 1 July 2011, but persists that an agreement was not reached between them. Roberts testified that he knew nothing about the negotiations of the assets at the Kokstad site because he was busy at other sit. According to Roberts, Henderson negotiated the Kokstad deal.

[57]       It was pointed out to Roberts that the offer was addressed to him and referred to discussions between the parties. Roberts testified that th1;1 offer was addressed to him In Henderson's absence.

[58]       Roberts did not indicate what was discussed during the telephonic conversation he had with Nell shortly before the offer was made on 1 July 2011.

[59]       The last witness called on behalf of the defendant was Mohammed Sooliman from IDC. Mr Sooliman was not a party to the negotiations between the parties and his evidence did not take the matter any further.

 

LEGAL PRINCIPLES

General

[60]       It is common cause between the parties that the offer that was accepted by the defendant did Include the machine. Applying the caveat subscriptor principle to the common cause fact, the defendant is in the normal course bound by the terms of the contract that was entered Into between me parties. [See: Burger v Central South African Railways 1903 TS 571]

[61]     Once the contract is signed, the doctrine of quasi-mutual assent, which entails that the offerer is reasonably entitled to assume that the signatory, by signing the document, was signifying his intention to be bound by It, applies. [See: Burger v Central South African Railways supra]

[62]       In some instances, our courts have found that the offeror could not reasonably have formed the assumption that the signatory, by signing the contract, intended to be bound by each and every term contained in the contract. [See: Christie's Law of Contract in South Africa, G i3 Bradfield, 7^th edition at 206]

[63]       The mere fact that a contracting party did not read a contract prior to signing it does not entitle the party to resile from the contract. [See: Afrox Heahhcare Bpk v Strydom 2002 (6) SA 21 SCA at para [34]]

 

Defence

[64]     Save for denying that the machine formed part of the purchased items, the defendant admits all the other terms of the contract. In its denial that it was agreed between the parties that the machine will form part of the purchase items, the defendant pleaded the following:

"In amplification of the denial, the Defendant alleges that·

14.1     the Plaintiff was aware at all material times that the Defendant was not the owner of the stitching machine;

14.2     the Plaintiff was aware at all mater/al limes that the Defendant was not authorised to sell the stitching machine to the Plaintiff;

14.3     notwithstanding the knowledge in paragraphs 14.1 and 14.2 above, the Plaintiff Included the stitching machine in the list of assets purchased and sold initially prepared by the Defendant Without disclosing same to the Defendant; and

14.4     had the Defendant noticed that the Plaintiff had included the stitching machine in the list of assets purchased and sold, the, Defendant would not have signed the agreement."

 

Discussion

[65]     In view of the general principles referred to supra, the question In casu is whether it was reasonable for the plaintiff to assume that the defendant. by signing the document, signified its intention to be bound by it.

[66]       The reasonableness of the plaintiff's assumption must be determined from the established facts.

[67]       Roberts is a seasoned businessman and has been involved in the purchasing and selling of assets for 18 years. On his own admission as a seasoned businessman, he would read an offer carefully before signing it.

[68]       The offer made by the plaintiff was for the Items contained in the asset list attached thereto. This is clearly stated in the offer to wit: "the purchaser wishes to make an offer to purchase the assets as listed in the list Which is attached hereto marked A (listed items)"

[69]     In the circumstances, the plaintiff was reasonable in assuming that Robert's signature on the contract indicated the defendant's intention to be bound by the terms contained in the offer.

[70]       It is further apposite to note that the defendant does not deny that the purchase price of R 2 500 000, 00 was in respect of the items listed in the asset list attached to the plaintiff's off r. The defendant admits receipt of the full purchase price, but denies that a portion of the purchase price was in respect of the machine.

[71]       Even if the principle of quasi-mutual assent was not applicable, the evidence on a balance of probabilities, in any event, establishes that the written offer contained the terms Nell and Roberts agreed upon on 1 July 2011 in their telephonic conversation.

[72]       The probabilities In favour of the plaintiff is premised on the following evidence:

72.1      Nell indicated to Roberts at the first inspection that the plaintiff is interested in the dust extractor and the machine;

72.2      the duet extractor was included in the asset list forwarded to Nell 27 June 2011;

72.3      Notwithstanding the aforesaid, Nell still did not make an offer;

72.4      Henderson testified that It Is in the defendant's Interest to sell goods purchased by it as soon as possible in order to avoid the cos occasioned by the dissembling, transport and storage of the assets:

72.5      the phone call from Roberts late on a Friday afternoon confirms that the defendant was anxious to sell the items It had bought from IOC;

72.6      in order to convince Nell to make an offer, Roberts agreed that the machine may be added to the list;

72.7      Nell was satisfied with this and was prepared to offer the amount of R 2,5 million for all the Items listed on the asset list attached to the offer;

72.8      Roberts admitted that he had a conversation with Nell late on Friday afternoon, but failed to give a version as to what exactly was discussed. To the contrary Roberts testified that he was not part of the negotiations between the plaintiff and the defendant, but merely signed the offer because Henderson was not available;

72.9      his version is countered by the fact that the offer was addressed to Roberts and that it refers to discussions between the parties i.e Nell and Roberts;

72.10  the terms and timing of the offer supports Nell's version of events, which version I accept as true and correct.

 

[73]      Save for the probabilities, the quality of Nell's evidence Is beyond reproach whereas Roberts evidence is fraught with inconsistencies, improbabilities and contradictions.

[74]       In the premises, I find that Nell and Roberts did agree that the machine will form part of the assets for sale.

 

Quantum

Legal principle

[75]       In Alpha Trust (Edms) Bpk v Van der Wah1975 (3) SA 734 AD It was held at 747 H that an evicted buyer may claim the purchase price as well as an increase in the value of the Item at the date of eviction or the value of the item as at date of eviction. [Also see: Lammers and Lammers v Giovannoni 1965 (3) SA 385 AD]

[76]       It is common cause between the parties that the plaintiff was evicted at the end of 2014.

 

Evidence

[77]      The plaintiff tendered the evidence of Rowan Bennet ("Benner) a senior appraiser employed at the Valuator Group as head of plant machinery and technical asset valuations. Benner has 25 years' experience in the valuation of plants and machinery and is a registered with the Royal Institute of Chartered Surveyors.

[78]     Bennet's expertise In the valuation of inter alia stitching machines was not put in dispute and in view of his vast experience In the field I am satisfied that he has been properly qualified as an expert.

[79]     Bennet inspected the machine on 2 December 2013 subsequent to its return to Singisi. Bennet prepared a certificate of valuation stating that a fair valuation of the machine as at 2 December 2013 is R 1 200 000, 00.

[80]     In assessing the value of the machine as at the end of 2014, Bennet explained that the machine has a 15-year lifespan. Taking depreciation and the increase in value as a result of currency fluctuations into account he assessed the value of the machine at the end of 2014 to be R 1 150 000, 00.

[81]     I accept his evidence in this regard and the quantum of the plaintiff's claim has been established on a balance of probabilities to be R 1 150 000, 00.

 

COSTS

[82]     Costs should follow the cause.

 

ORDER

[83]       In the premises, the defendant is ordered to pay the plaintiff:

1.        An amount of R 1 150 000, 00.

2.        Interest on the aforesaid amount calculated at 10% per annum from 26 February 2015. to date of payment;

3.        Costs of suit.

 

 

 

JANSE VAN NIEUWENHUIZEN

JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

 

DATES HEARD                                           10, 11, 12 and 13^th of February 2020

JUDGMENT DELIVERED                         04 March 2020

 

APPEARANCES

 

Counsel for the Plaintiff:                                  Advocate Y. Coertzen

(082 821 5212)

Instructed by:                                                  Van der Merwe and Associates

(087 654 0209)

Ref: Mr GT VD MERWE/dm/Y18

 

Counsel for the Defendant:                              Advocate A.R. Skukdeo

(083 288 2345/0112904000)

Instructed by:                                                   Barkers Attorneys.

c/o MacRobert Incorporated

Ref. E Ward

---