|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
South Africa: Supreme Court of Appeal |
[Database Search] [Name Search] [Recent Decisions] [Noteup] [Help]
ANGLO AFRICAN SHIPPING (1936) (PTY) LTD
and
SLAVIN PACKAGING (PTY) LTD
SMALBERGER, JA :-
74/85 N v H
74/85
N v H
IN THE SUPREME COURT OF SOUTH AFRICA
(APPELLATE DIVISION)
In the matter between:
ANGLO AFRICAN SHIPPING (1936) (PROPRIETARY) LIMITED
Appellant
and
SLAVINS PACKAGING (PROPRIETARY) LIMITED
Respondent
CORAM:
HEARD:
DELIVERED:
TRENGOVE, HOEXTER, VAN HEERDEN, SMALBERGER, JJA, et BOSHOFF,
AJA
4 SEPTEMBER 1986 26 SEPTEMBER 1986
JUDGMENT
SMALBERGER, JA :-
The respondent successfully sued the appellant
in the Witwatersrand Local Division for damages in the sum of
R52 000. The respondent's claim was based on the appellant's
breach /.....
2
breach of an alleged contract of sale. The appellant now appeals against
the decision of the trial Judge (ESSELEN, J), leave to do
so having been granted
by this Court.
The sole issue on appeal concerns the question whether or not
the agreement of sale entered into between the parties, in circumstances
which I
shall presently detail, in respect of a machine used for bookbinding and related
purposes, and known as a "casemaker", was
void on the grounds of mistake. The
appellant argued that it was, while the respondent con= tended to the contrary.
In order to appreciate
the respective contentions advanced by the parties, and
to view them in proper perspective, it is necessary to set out the relevant
facts, particularly those which preceded the agreement of sale, in
some detail. These facts, unless otherwise indicated,
are /
3
are either common cause, or not in dispute for the purposes
of the appeal.
The appellant, notwithstanding its name, is a finance company
which specialises in short term financing. It is a member of a group
of
companies with world-wide interests. One of its sister companies, which also
specialises in short term financing, is the International
Shipping Company
(Proprie= tary) Limited (International Shipping). The respondent is a
manufacturer of plastic products, as well
as stationery and packaging products.
Its managing director, who throughout the events I shall unfold acted on its
behalf, is one
Slavin. In September 1982 an advertisement appeared in the press
advertising the sale of "the most modern and sophisticated bookbinding
equipment" belonging to a company in liquidation,
Everton /
4
Everton Offset (Proprietary) Limited (Everton
Offset).
The sale was held on 14 September 1982. Three of the items
on the sale were a Kolbus Flowline (the flowline), a Kolbus
Combined End Sheet Glueing Machine (the glueing machine) and
a Kolbus Fully Automatic Casemaker DA with Cloth Feeder and
Boardcutter (the casemaker). Slavin attended the sale, and
inspected the machinery on offer. He was particularly
interested in the casemaker as it could be used for the
respondent's manufacturing purposes. The flowline, glueing
machine and casemaker were put up for auction individually
and collectively. Slavin put in the highest individual bid
for the casemaker, namely R30 000. It was, however, not sold
to him, as the highest bid for the three items together
exceeded the sum of the highest bids for each individual item.
There /.....
5
There is no evidence of what the highest individual bids were in respect
of the flowline and glueing machine. The successful collective
bid was put in by
International Shipping, which had financed the initial purchase of the three
machines by Everton Offset, and to
which Everton Offset still owed a
considerable sum of money. I digress for the moment to mention that the action
which has given
rise to the present appeal should strictly speaking have been
between the respondent and International Shipping, but the respondent
was misled
by certain correspondence into be= lieving that it was dealing throughout with
the appellant. Hence the point was not
taken that the respondent had sued the
wrong company. For practical purposes, therefore, International Shipping can be
equated with
the appellant, and I will regard
the machines as having been bought by the appellant.
To /
6
To revert to the facts. Having acquired the
machines the appellant, represented by one of its executive
officers, a certain Scarrott, requested the Ipex Printing
Machinery (Proprietary) Limited (Ipex), a company which deals
in new and second-hand printing machinery, and whose managing
director was one Briissow, to endeavour to sell the machines on
its (the appellant's) behalf. The appellant was advised by
Brüssow that a realistic selling price for the casemaker
(which was virtually new) would be R66 000, and for the glueing
machine, R18 000. Towards the end of September 1982 Slavin
was approached by a salesman for Ipex, one Da Rocha, who tried
to interest Slavin in purchasing the casemaker for R66 000.
Slavin's response was that the price was "absurdly high" and
that he could obtain a used machine (presumably of a similar
make /.....
7
make) overseas for R45 000. At about the same time
Scarrott
telephoned Slavin in response to a call received from Slavin
and gave him the prices for the three machines as casemaker,
R66 000, glueing machine, R20 000, and flowline, R150 000.
Slavin commented that if the appellant wanted to sell the
machinery cheaply he was interested in buying. Although
Slavin could not recall the conversation, which is confirmed
by a note in Scarrott's diary, he did not dispute that it had
taken place. I pause here to mention that at the time the
printing and bookbinding industries were severely depressed
due to recessionary conditions. The market for related
machinery was equally depressed, and it was very much a buyer's
market.
Nothing further transpired between the parties until
the second half of January 1983, some four months later. On
24 January / .....
8
24 January 1983 Slavin flew to Europe on business-
Prior
to leaving he attempted to contact Scarrott in order to
ascertain whether the casemaker was still for sale. The
reason for doing so, according to Slavin, was that he intended
to discuss a new project with an overseas correspondent, with
reference to using the casemaker. Scarrott was not available
when Slavin telephoned, and did not return Slavin's call before
the latter's departure overseas. When eventually Scarrott
telephoned the respondent he spoke to one Winkler, the
respondent's general works' manager. Winkler was unaware of
the fact that Slavin had attempted to contact Scarrott, and
had not been alerted to the possibility of a call from the
latter. During the course of their telephone conversation
Winkler requested Scarrott to put any proposals he wished to
make /.....
9
make in writing for transmission to Slavin. As a result Scarrott caused
a telex to be sent to the respondent, the material portion
whereof reads as
follows:-
"Machinery on offer in Kolbus range :-1} End Sheet Glueing Machine R72 000 nett. 2) Casemaker R20 000 nett. Both ex warehouse with no guarantee. Approximately one year old. Commission or margin required by you to be added to above prices."
In quoting the prices in the telex Scarrott mistakenly transposed them. He had meant to reflect the price of the glueing machine as R20 000, and that of the casemaker as R72 000. Winkler immediately passed on the contents of Scarrott's telex to Slavin. The material portion of Winkler's telex in this regard reads as follows:-
"These /
10
"These people have unsuccessfully tried to sell these machines both here and overseas. If you can help they would be grateful. Their message follows:-
International Shipping Company (Pty) Ltd. Machinery on offer in Kolbus range :-
1) End Sheet Glueing Machine R72 000 nett. 2) Casemaker R20 000 nett.
Both ex warehouse with no guarantee. Approximately one year old. Commission or margin required by you to be added to above prices."
On 28 January 1983 Slavin responded to Winkler's telex with the following telex from Milan:-
"R Winkler
Re Kolbus machinery prices seem incorrect. Casemaker at R20 000 should immediately be bought. We offered R30 000 at auction. Pls tlx advise correct model no and serial nos. I will try and sell next week. Pamphlets on machines in Achilles file with Rina."
The /.....
11
The words "prices seem incorrect" in Slavin's telex were understood by Winkler as an instruction to check the prices. Winkler did not go back to Scarrott, but "checked" the prices merely by referring to Scarrott's original telex. Having done so he sent Slavin a telex on the same day which read:-
"Att : Mr Robert Slavin
Could you please pass message to Mr R Slavin Kolbus Machinery
Prices quoted are correct. Model X serial no will follow when obtained."
On 31 January 1983 Winkler telexed the model and serial numbers of the casemaker and glueing machine to Slavin after having received them from Scarrott.
Winkler did not carry out Slavin's instruction to buy the casemaker immediately. Instead he telephoned Scarrott on 8 February 1983 and arranged for a two-week option to
purchase /
12
purchase the casemaker. This was confirmed by a letter of the
same date from the respondent's accountant, one Lee, to Scarrott
Neither during the telephone call, nor in the letter, was any
reference made to the price of the casemaker. Slavin subse=
quently returned from overseas, inspected the casemaker and its
accessories at the premises where it was being housed, and on
22 February 1983 sent Scarrott a letter by hand exercising the
option to purchase the casemaker for R20 000. The letter was
delivered to Scarrott personally by a Mrs Richardson, who at the
time was one of the respondent's sales representatives. In the
presence of Mrs Richardson Scarrott telephoned Brüssow and told
him that he had obtained a good price for the casemaker. It
was only after he had mentioned the price to Brüssow, and
Brüssow had reacted thereto, that it dawned on Scarrott, no
doubt /....
13
doubt to his great distress, that he had mistakenly transposed
the prices of the casemaker and the glueing machine in his
telex to Winkler. Almost immediately thereafter Scarrott
telephoned Slavin to tell him that the prices in his telex had
been inverted. Slavin told Scarrott to discuss the matter with
Winkler, and put him through to Winkler. Scarrott repeated to
Winkler that he had made a mistake, and that the price of the
casemaker should have been R72 000, and that of the glueing
machine R20 000. Winkler said he would discuss the matter with
Slavin. The following day, in the course of a further telephone
call from Scarrott to Slavin, the latter informed Scarrott that
he was holding the appellant to its quotation, and the resultant
agreement in respect of the sale of the casemaker. The
appellant /....
14
appellant subsequently refused to be bound by the agreement,
declined to give the respondent an undertaking that it would
not dispose of the casemaker pending the outcome of an action,
and eventually resold the casemaker to a third party. In
the result the respondent was left with a claim for damages
against the appellant.
In the Court a quo the appellant contended that it
was not bound by the option or sale, as it had by mistake
transposed the prices of the casemaker and the glueing machine
in its telex to Winkler, and that the respondent knew of the
mistake or, alternatively, ought reasonably to have known
thereof. It was ultimately common cause at the trial that
the appellant had made a mistake, but the trial Judge found
that the appellant had failed to establish actual or constructive
knowledge /....
15
knowledge of the mistake on the part of the respondent (the
appellant having accepted that the onus to do so was on it).
In the result the trial Judge held that there had been a valid
agreement between the parties in respect of the sale of the
casemaker for R20 000. It was not disputed that if such an
agreement existed, it had been breached by the appellant, and
that the respondent had in consequence thereof suffered damages
in the sum of R52 000. So much for the facts, and the
background to the appeal.
On appeal it was common cause between counsel for
the parties that, in our law, if one person makes a material
mistake in an offer to another, a valid contract does not
result if the latter's acceptance takes place with knowledge
of the mistake. Counsel were further agreed that, estoppel
apart /......
16
apart, constructive knowledge of a material mistake in an offer
suffices to exclude a contract if such offer is accepted, i.e. if
a reasonable
man in the position of the offeree would have known of the mistake in the offer.
Our law, counsel contended, does not
permit a person to "snatch a bargain" or
"snap up" a mistaken offer. Although there is no decision of this Court on the
point, the
authorities referred to by counsel in their heads of argument
(notably those of counsel for the appellant) afford strong support
for their
contentions. It is not, however, necessary to decide whether those conten= tions
are correct, or correct in all respects.
For the purposes of the present appeal
I shall assume, without expressing any view thereon, the correctness of
counsel's contentions
in the above regard. On this assumption, if the
appellant
can /
17
can establish that the respondent knew, or ought reasonably to have
known, of Scarrott's mistake, no valid contract of sale would
have been
concluded, and the appeal must succeed.
The appellant relies heavily on the
contents of the telex from Slavin to Winkler on 28 January 1983 for its
contention that Slavin
must have known (and therefore by inference did know)
that the prices quoted by Scarrott to Winkler, and in turn conveyed by him
(Winkler) to Slavin, had mistakenly been transposed. In this respect the point
was made that the telex had not been analysed with
sufficient care and
perception by the trial Judge. Slavin's telex must, of course, not be viewed in
isolation, but against the background
of the knowledge he possessed at the time.
It may also have
to be viewed in the light of other considerations, a matter to
which /
18
which I shall advert later. The evidence establishes that
when he received Winkler's telex, Slavin was fully alive to
the fact that he had some four months earlier bid R30 000 for
the casemaker, and that it had shortly thereafter been offered
to him by Da Rocha for R66,000. He presumably would also have
remembered his response to Da Rocha at the time,viz., that
the price was "absurdly high", and that he could acquire a
similar used machine overseas for R45 000. It was argued
that Slavin must also have recalled to mind the prices that
Scarrott had quoted to him for the casemaker and the glueing
machine (R66 000 and R20 000 respectively). It should
therefore have been patently obvious to Slavin, so the argument
goes, that the price reflected in the telex:he received from
Winkler for the glueing machine was glaringly high, and that
for /....
19
for the casemaker correspondingly low - a clear indication
thus that the prices had been transposed. It was further
argued that Slavin had promptly appreciated that there had
been a mistake, and that the opening words in his telex to
Winkler "prices seem incorrect" were a manifestation of
Slavin's realisation that the prices had been transposed,
particularly when regard was had to the use of the plural
"prices". Hence the instruction, in order to snatch a
bargain, "casemaker at R20 000 should immediately be bought".
A further consideration mentioned was Slavin's request for
the model and serial numbers of the machines coupled with the intimation "I will try and sell next week", which it was suggested indicated that Slavin was buying the casemaker in order to resell it, in the obvious realization that the appellant's
mistake could be turned to the respondent's advantage. It was
further /
20
further contended that Slavin had neither intended nor expected
Winkler to check the prices quoted in any way, but to act
without delay and accept the offer in respect of the casemaker.
This, it was argued, was evident from Slavin's attitude, as
expressed in his evidence, that when a purchaser suspects a
mistake there is no need to alert the seller thereto and put him
on his guard, as well as his telephone call from Denmark to
Winkler to enquire whether his instruction had been carried out,
and his annoyance when told that Winkler had not purchased the
casemaker, but taken an option on it. Other factors on which
reliance was placed to indicate actual knowledge on Slavin's
part that a mistake had been made were his alleged readiness
to buy the casemaker despite the intimation in Winkler's telex
that the machines were proving difficult to sell; his failure
to instruct /.....
21
to instruct an inspection of the casemaker before purchase;
his alleged lack of candour when Scarrott informed him that
he {Scarrott) had made a mistake and transposed the prices
in his telex to Winkler; and his inappropriate reaction in
referring Scarrott to Winkler instead of dealing with him
himself. Criticism was also voiced of Slavin's obstinate
refusal during cross-examination to concede that Scarrott had
made a mistake when it was obvious that he had done so.
Compelling though many of these arguments are, I am
unpersuaded that actual knowledge of Scarrott's mistake can
be imputed to Slavin. I have previously mentioned that
Slavin's telex to Winkler on 28 January 1983 must be viewed
against the background of the events which preceded it. It
must also be seen in the context of Slavin's evidence concerning
what /.....
22
what he intended to convey in the telex, bearing in mind the
trial Judge's finding that Slavin was a "satisfactory and
convincing" witness. I pause here to remark that the opposite
finding was made in respect of Scarrott as a witness, although
such finding would not seem to have a significant bearing on
the outcome of the appeal. A finding that Slavin knew that
a mistake had been made by the appellant has as its concomitant
a finding that Slavin was a deliberately untruthful witness in
maintaining the contrary. Such finding would fly in the face
of the trial Judge's assessment of Slavin's evidence and
credibility. A Court of appeal will normally hesitate to
disturb a trial Judge's findings of fact and credibility.
particularly having regard to the advantages enjoyed by him in
seeing and hearing the witnesses and being steeped in the
atmosphere /.....
23
atmosphere of the trial. (R v Dhlumayo and Another 1948(2)
SA 677(A); S v Kelly 1980(3) SA 301 (A)). But such findings
are not unassailable- There are circumstances where inter=
ference with such findings would be justified- In the words
of INNES, CJ, in Estate Kuluza v Braeuer 1926 AD 243 at 256,
"the Court cannot escape the responsibility of interfering
where, after making every allowance for the fact that it has
not seen the witnesses, it is satisfied that a wrong conclusion
has been reached." To hold otherwise would be to detract from
the fact that an appeal is essentially in the nature of a re-
hearing, although upon special lines. But sound reasons must
exist before the conclusion can be reached that a trial Judge's
findings of fact and credibility were wrong.
The major / .......
24
The major flaw, in ray view, in the appellant's
argument, and the inference it seeks to draw from the contents
of Slavin's telex to Winkler, is the absence of any evidence,
or sufficient evidence, to show that Slavin, at the relevant
time, knew what the relative values of a casemaker and a
glueing machine were, and that the former was a much more
expensive machine than the latter. Without such evidence
the argument that Slavin, on receipt of Winkler's initial
telex, realised that the price of the casemaker was glaringly
low, and that of the glueing machine glaringly high, and
accordingly that the prices had been transposed, must needs
fall away. Slavin was never questioned in this regard, and while he
knew in general that Kolbus machines were "fairly expensive" there is
no direct evidence that he knew what the relative values of
the /.......
25
the two machines were. Nor is. there, in my view, sufficient
evidence from which such knowledge on Slavin's part can be
inferred. Slavin did not normally deal in machines such as
the casemaker and the glueing machine. Throughout the piece
Slavin maintained that he was only interested in the acquisition
of the casemaker. In his own words, the glueing machine "was
not part of my industry's tools of trade." There is nothing
to refute his evidence in this regard - nor even to cast doubt
upon it. If Slavin was not interested in the glueing machine
he is unlikely to have taken particular note of its price,
either at the time of the auction or later, or to have known
(or appreciated) how its price compared with that of the
casemaker. There is no evidence that Da Rocha ever offered
to sell him the glueing machine, or conveyed its price to him.
As I /......
26
As I have mentioned, Scarrott testified that he gave Slavin
prices for the casemaker, glueing machine and flowline, which
Slavin does not deny, although he cannot recall the conversation
(Scarrott's evidence that Slavin specifically asked him for all
three prices was never put to Slavin under cross-examination.
nor conceded by him, and, in the circumstances, cannot be
accepted, particularly when regard is had to the adverse credi=
bility findings made against Scarrott). If Slavin's evidence
that he is unable to recall this conversation is to be believed,
and no reason was suggested why it should not be, then the
conversation clearly made no lasting impression on Slavin, and
it can accordingly not be said (at least not with any degree of
conviction) that the price of the glueing machine, or its
relationship in value to the casemaker, must have impressed
itself /......
27
itself on Slavin's mind to the extent that he would inevitably
have recalled it on receipt of Winkler's telex four months
later.
Slavin realised, on receipt of Winkler's telex, that
the casemaker on offer for R20 000 was the selfsame machine for
which he had put in the highest individual bid of R30 000 at the
auction, and which had subsequently been offered to him by
Da Rocha for R66 000. While at first blush the low price is
indicative of a mistake, a possibility to which Slavin was alive,
it does not necessarily follow that he must have known that a
mistake had been made. According to Slavin, it "appeared
strange to me that we should be offered a machine at a cheaper
price than we bid at the auction but not so strange as to
be unbusinesslike". It must be borne in mind that Slavin knew
that /.......
28
that the market for that type of machine was sorely depressed,
in all probability more so than in September 1982, and that
the appellant (in view of what was stated in Winkler's telex)
had unsuccessfully tried to sell the casemaker in the Republic
and overseas. Furthermore, Slavin knew that the casemaker was
in the hands, not of a dealer in that type of commodity, but a
financial institution, which might, in view of its unsuccessful
attempts to sell the casemaker, wish to dispose of it as expe=
ditiously and beneficially as possible. As Slavin put it:
"I knew there was a financial institution involved to
them having such a machine overhanging their organization was
a pure nuisance value and they would want to liquidate
and get their money back at a lower but not an unreasonable
price." These considerations militate strongly against a
finding /.....
29
finding that Slavin must have known that a mistake had been
made in quoting the casemaker's price. He may legitimately
have thought that, while a mistake was possible, valid reasons
existed for the striking reduction in the casemaker's price.
As stated in Corbin on Contracts: Vol 3 : para 605 :
"market value is a variable quantity. It varies with time and
place and circumstances. It varies with the appetite of him
who buys and with the needs of him who sells".
Nor, in my view, can the phrase "prices seem incorrect"
simply be extracted from Slavin's telex to Winkler and relied
upon to conclude that Slavin knew that the prices had been
transposed. The use of the word "seem" suggests uncertainty
as to the correctness of the prices (which Slavin admits) rather
than knowledge that they were incorrect. As previously
pointed /......
30
pointed out, there is no evidence, or insufficient evidence,
either to establish, or justify the inference (as the more or
most probable one), that Slavin knew what the respective
values of the casemaker and the glueing machine were, and
should consequently have realised that the prices had been
inverted. Slavin was never asked to explain precisely what
he had in mind with the use of the phrase "prices seem in=
correct", more particularly the use of the plural "prices",
nor was it ever pertinently suggested to him that those words,
in themselves, were indicative of knowledge on his part that
the prices had been transposed. In the circumstances it
would not be proper to draw an adverse inference against Slavin
merely from the use of those words. It is also relevant to
note that the price quoted for the glueing machine, viz., R72 000,
was /.....
31
was a figure which had never previously featured in any
discussion or conversation concerning the casemaker. Had
its price been given as R66 000, which was the price pre=
viously quoted for the casemaker, it may have been more
obvious that there had been a transposition of prices, and
the inference that Slavin knew that to be the case, corre=
spondingly stronger.
The words in Slavin's telex "Casemaker at R20 000
should immediately be bought. We offered R30 000 at auction"
could well support an inference that Slavin knew that a mistake
had been made, and wanted to "snatch" the bargain on offer
without delay. But they could equally imply (when taken in
conjunction with the preceding words) that the price was to be
checked (because Slavin entertained some doubt as to its
correctness /......
32
correctness), and if found to be correct, the casemaker was
to be bought (as the respondent had been prepared to pay
R30 000 for it four months previously). Slavin ultimately
maintained that in essence this is what the words were in=
tended to convey, having acceded readily to the suggestion
put in cross-examination that the words contained the impli=
cation that Winkler should check the prices. While Slavin's
evidence in this regard was somewhat lacking in spontaneity,
I can find no valid reason to disbelieve it. It is by no
means far-fetched to read such an implication into the words
of the telex. Winkler actually understood them in that
sense, and checked the prices by referring to Scarrott's telex.
Having done so, he telexed Slavin that the prices were correct
This, according to Slavin, removed all doubt from his mind as
to /.......
33
to the correctness of the prices, a reasonable and natural
reaction if previously there had only been doubt, and not
certainty, in his mind. Slavin was entitled to assume that
Winkler had taken such steps as were necessary to satisfy
himself that the prices were correct. Slavin's telex to
Winkler did not, either specifically or by implication, place
any restrictions on Winkler in this regard.
I turn next to the submission that Slavin's request
in his telegram to Winkler for the model and serial numbers
of the machines, together with the intimation "I will try and
sell next week" indicated that Slavin was buying the casemaker
to resell it, thereby taking advantage of what he knew was a
mistake. This submission runs counter to Slavin's evidence and
the probabilities. Slavin's evidence was that he intended
to /.......
34
to purchase the casemaker for the respondent's manufacturing
purposes, and not to resell it. This is borne out by the
fact that he bid on the casemaker at the auction in September
1982, and had attempted to contact Scarrott before his departure
for Europe to ascertain whether the casemaker was still for sale
The probabilities are that he would not have done so had he not
genuinely been interested in the acquisition of the casemaker
for the respondent's purposes. It was only at a later stage of
his overseas trip that he considered the possibility of reselling
it, or trading it in, if it was not possible to utilize it
beneficially in the respondent's interests. In any event the
words "I will try and sell next week" are somewhat ambiguous.
It is not clear whether they relate, or were intended to relate.
to both the casemaker and the glueing machine, or to one or the
other /......
35
other. Slavin was never asked to explain what precisely the
words were intended to convey. In the circumstances the in=
ference the appellant seeks to draw from the use of the words is
not justified.
I believe I have dealt with all aspects of Slavin's
telex to Winkler, and their possible significance in relation
to Slavin's knowledge, or lack of it, that the appellant had
made a mistake. I now move on to the other considerations
relied upon by the appellant as signifying actual knowledge on
Slavin's part. Appreciation by Slavin that a mistake had been
made was said to be implicit in his attitude, as revealed in
his /......
36
his evidence, where he said :
"People do make mistakes, but on the other hand, in commercial negotiations, when one is negotiating, does one say to a seller (and I'm not arguing the legal point), does one put words in the seller's mouth, or does one put the seller on guard perhaps, for want of a better word."
This passage, however, must be read in conjunction with what was said by Slavin almost immediately thereafter, viz. :
"In commercial negotiations, if someone quotes you a price that is in all intents and purposes reasonable, what does one do?"
Views may differ on whether Slavin's attitude, as it emerges from the passages I have quoted, is necessarily out of keeping with normal business morality and thinking (involving as it does the field of moral philosophy). While the passages
quoted may reflect sadly on Slavin's business ethic, or lack of
it /
37
it, I am unable to read into them knowledge on his part that a mistake had been made. The fact that Slavin appreciated that he was striking a bargain does not mean that he "snatched" at one in the legal sense. The latter concept denotes an uncon= scionable act (which the law will not countenance) in deliberately seeking to take advantage of another's known mistake (I refer, of course, to the case where actual knowledge is present); striking a bargain is a legitimate occurrence frequently en= countered in the business and commercial world which the law recognises and enforces.
Slavin's failure to instruct Winkler to inspect the casemaker before its purchase, and his (Slavin's) readiness to buy it despite the intimation in Winkler's telex that it was
proving difficult to sell, upon which the appellant relies,
cannot /
38
cannot be regarded as of any significance in relation to the
issue of Slavin's knowledge. There was no need to inspect
the casemaker as Slavin was acquainted with it, having in=
spected it four months previously at the time of the auction,
and his readiness to buy was consistent with his previously
evinced intention to purchase the casemaker if it could be
obtained at a price he was prepared to pay. I see nothing
sinister or significant in the fact that Slavin telephoned
Winkler from Europe to enquire whether the casemaker had been
purchased. Such conduct would seem to be in keeping with
normal business interest and practice. The fact that Slavin
displayed annoyance when he heard that Winkler had not purchased
the casemaker, but taken out an option on it (which in any
event secured the respondent's right to acquire it), while
perhaps /.......
39
perhaps a matter for comment, carries insufficient weight to
have any significant bearing on the question of Slavin's
knowledge. So too, while Slavin's somewhat obdurate refusal
to concede that Scarrott had made a mistake may, to some extent,
reflect adversely on his credibility, it cannot seriously
detract from the trial Judge's finding that he was a "satisfac=
tory and convincing witness".
To sum up thus far. The evidence does not, in
my view, justify the inference, as the most probable inference,
that at the time of his return from overseas Slavin knew
that a mistake had been made in the price quoted for the casemaker,
nor the rejection of Slavin's evidence to the contrary.
The /......
40
The option to purchase the casemaker was exercised
on 22 February 1983. Nothing occurred between Slavin's
return from overseas and then to alert him to the fact that a
mistake had been made. It was not established that Slavin
knew or appreciated that Winkler had checked the prices only
by reference to Scarrott's telex, and not by reference to
Scarrott himself. I would hesitate, on the issue of Slavin's
knowledge, to draw any adverse inference from Slavin's alleged
lack of candour when told by Scarrott that he (Scarrott) had
made a mistake and transposed the prices, and Slavin's referral
of Scarrott to Winkler. Slavin was never questioned about his
alleged lack of candour, or his reasons for referring Scarrott
to Winkler. He could conceivably have provided some acceptable
explanation for his conduct. One such explanation might be
that /.......
41
that as Scarrott had originally discussed and conveyed the
prices to Winkler, the question of any mistake was best dealt
with by them. There are in my view no considerations of
sufficient persuasion to justify the conclusion that when
the option was exercised the position had changed from the
time of Slavin's return from overseas, and that he had in the
interim acquired knowledge of Scarrott's mistake.
In the result I am not persuaded that the trial
Judge erred in finding that the appellant failed to discharge
the onus on it of proving that the respondent (through Slavin)
knew that the appellant (through Scarrott) had made a mistake
with regard to the price of the casemaker when offering it for
sale. In arriving at this conclusion I have had regard not
only to the individual arguments raised by the appellant, with
which /.......
42
which I have endeavoured to deal, but I have also taken into account
the cumulative effect of all such considerations as favour the
appellant. Nor
has it been proved by the appellant that the respondent ought reasonably to have
known of such mistake. A reasonable
man in Slavin's position (i.e. with Slavin's
knowledge and understanding of all relevant circumstances which either preceded,
or
existed at the time of, the receipt of Winkler's initial telex) would, in my
view, have shared Slavin's original doubt concerning
the correctness of the
prices quoted in the telex, but he would not necessarily have appreciated that a
mistake had been made. In
his case too such doubt would have been allayed on
receipt of Winkler's confirmation that the prices were correct. Nor did any
events
occur subsequently which would have caused him to know
that /
43
that a mistake had been made.
It was not suggested that Winkler had actual
knowledge of Scarrott's mistake. Winkler was unacquainted
with a casemaker and a glueing machine, and had no knowledge
of their relative values. He had specifically requested
Scarrott to commit the prices he required for the machines to
writing. He had no reason to anticipate any mistake on
Scarrott's part. On receipt of Slavin's telex, which
indicated a possible error in the prices and implied that they
be checked, Winkler was reasonably entitled to assume that
Slavin was alluding to a possible error on his (Winkler's)
part in transmitting the prices. In those circumstances he
cannot be faulted for merely consulting Scarrott's telex before
advising Slavin that the prices were correct. A reasonable
man /......
44
man in Winkler's position would have acted no differently. He would
have been entitled to have regard to what could reasonably have
been considered
as reliable information available to him - in this instance Scarrott's telex. In
the circumstances Winkler's failure
to ascertain from Scarrott whether the
prices set out in the latter's telex were correct does not justify an adverse
inference, as
his
conduct cannot be construed as unreasonable.
In the result, even assuming
that constructive knowledge on the respondent's part of Scarrott's mistake
would
have sufficed to vitiate the agreement of sale, such constructive knowledge was not proved-
I am /......
I am accordingly of the view that there is no
basis for interfering with the findings of the trial Judge
The appeal is dismissed, with costs.
SMALBERGER JUDGE OF APPEAL
TRENGOVE, JA) HOEXTER, JA) VAN HEERDEN, JA) BOSHOFF, AJA)
45
SAFLII:
|
Terms of Use
|
Feedback
URL: http://www.saflii.org/za/cases/ZASCA/1986/118.html
.PDF of original document
.RTF of original document