Court name
High Court
Case number
1016 of 2011
Title

Easigas (Pty) Ltd v Autogas Namibia (Pty) Ltd (1016 of 2011) [2012] NAHC 257 (05 October 2012);

Media neutral citation
[2012] NAHC 257
Coram
Ueitele J













HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK



JUDGMENT



Case no: I 1016/2011








In the matter between:







EASIGAS (PTY) LTD FIRST
......................................................................APPLICANT








And








AUTOGAS NAMIBIA (PTY) LTD
............................................SECOND
RESPONDENT








Neutral citation: Easigas (Pty)
Ltd v Autogas Namibia (Pty) Ltd
(I 1016/2011) [2012] NAHCMD 17 (5
October 2012)












CORAM:
UEITELE, J


Heard:
18 SEPTEMBER 2012


Delivered:
5 OCTOBER 2012



___________________________________________________________________



ORDER



The following order is made:




  1. The exception succeeds and the defendant’s counterclaim is set
    aside with costs;



  2. The defendant is given leave, if so advised, to file an amended
    counterclaim and declaration within 15 days from the delivery of
    this judgment.



















JUDGMENT






UEITELE
J:


INTRODUCTION:



[1] The plaintiff has excepted to the defendant’s counterclaim
on the basis that it does not disclose a cause of action,
alternatively that he defendant’s counterclaim is vague and
embarrassing.













[2] The background to this matter is briefly that the plaintiff
instituted action against the defendant, in which action the
plaintiff claims payment for an amount of N$ 1 196 208, 55 from the
defendant. The facts pleaded by the plaintiff are amongst others
that:




  1. During March 2006, the plaintiff and the defendant concluded a
    written supply agreement (the supply agreement incorporated a
    confidential letter dated 28 February 2006) in terms of which the
    plaintiff was to supply the defendant with Liquefied Petroleum Gas.
    (I will in this judgment use the acronym LPG). The LPG was to be
    delivered to the defendant’s bulk storage facilities situated
    at Erf 196, Southern Industries, Windhoek. The first consignment was
    delivered on 18 September 2006.



  2. The supply agreement was to endure for a period of ten years from
    the commencement date. The commencement date is defined (in the
    written agreement) as the date of fist delivery of the LPG to the
    defendant’s bulk storage facility.



  3. The plaintiff would install LPG storage tanks, related piping and
    required equipment with an estimated value of N$ 1 200 000; the
    tanks would be installed at the defendant’s depot in Windhoek.



  4. The storage tanks and the related equipment would remain the
    property of the plaintiff.



  5. The plaintiff would purchase the LPG Tanker from the defendant at an
    amount of N$ 345 000.



  6. The defendant would buy back from the plaintiff the LPG Tanker at a
    purchase price of N$ 345 000 – the loan was to be repaid
    within 36 months from the date of commencement of bulk supply to
    Windhoek and any financial amounts outstanding after the 36 months
    period would need to be settled in full at the end of that 36 month
    period.



  7. The defendant breached the supply agreement (incorporating the
    confidential letter) by failing to pay the:





  1. amount of N$ 875 202.75 in respect of goods sold and delivered;





  1. amount of N$ 321 005.80 in respect of the loan advanced to it.









[3] The defendant requested further particulars, which particulars
were supplied. After it received the particulars which it requested,
the defendant pleaded to the plaintiff’s particulars of claim
and its plea was accompanied by a counterclaim. In the counterclaim
the defendant admits certain allegations made by the plaintiff. The
defendant pleaded the following facts in its counterclaim:



(a) That during or about 2007 the plaintiff and the defendant entered
into an addendum to the supply agreement. The addendum was for the
increase of the LPG that was supplied by the plaintiff to the
defendant in terms of the supply agreement.



(b) The defendant further pleaded that the addendum was annexed as
Annexure “A” to the counterclaim.








[4] After the defendant filed its counterclaim the plaintiff took an
exception to the counterclaim. The plaintiff initially raised ten
different grounds upon which it was excepting to the defendant’s
counterclaim. At the hearing of the exception Mr. Coleman who
appeared for the plaintiff and Mr. Elago who appeared for the
defendant informed me that they have agreed to confine the exception
to the tenth ground of complaint. The tenth ground of exception
relied on by the plaintiff reads as follows:








[The defendant] relies on
a document which it alleges is an agreement. Annexure “A”
to the defendant’s counterclaim is at best recording concerns.
By no stretch of imagination can it be construed to be an agreement.
Therefore it also does not comply with the non-variation clause in
paragraph 17.6 of the supply agreement. (Annexure ‘PC1’
to the particulars of claim)’.








The Legal Principles



[5] I will now proceed to consider
whether the exception raised by the plaintiff can be upheld or not.
Before doing so I will briefly set out the legal principles
applicable to exceptions.








[6]
The
onus of
showing that a pleading is excipiable rests on an excipient (see
Kotsopoulus v Bilardi1








[7]
The Cape Provincial Division of the High Court of South Africa
articulated the general approach to exceptions in the case of
Colonial Industries Ltd v
Provincial Insurance Co Ltd
2
as follows:



Now
the form of pleading known as an exception is a valuable part of our
system of procedure if legitimately employed:
its
principal use is to raise and obtain a speedy and economical decision
of questions of law which are apparent on the face of the pleadings
:
it also serves as a means of taking objection to pleadings which are
not sufficiently detailed or otherwise lack lucidity and are thus
embarrassing. Under the name of “Demurrer” it grew under
the old English practice into a most pernicious evil: the Courts of
Law abnegating their functions as Courts of Justice directly
countenanced and encouraged the ingenuity of counsel in drafting fine
demurrers which ignored the rights on which they were called to
adjudicate. I think that the possibility of such abuse of legal
proceedings should be jealously watched and that save in the instance
where
an exception is taken for the purpose of raising a substantive
question of law which may have the effect of settling the dispute
between the parties, an excipient should make out a very clear,
strong case before he should be allowed to succeed.

(My emphasis.)








[8]
This approach to exceptions has been consistently followed in this
court (see for example,
Namibia
Breweries Ltd V Seelenbinder, Henning & Partners
3
Total Namibia (Pty) Ltd v Van der
Merwe t/a Ampies Motors
4
July v Motor Vehicle Accident
Fund
5,
and the approach
is neatly summed up by one writer
6
in the following manner:



The
court should not look at a pleading with a magnifying glass of too
high power. It is the duty of the court when an exception is taken to
a pleading first to see if there is a point of law to be decided
which will dispose of the case in whole or in part. If there is not,
then it must see if there is an embarrassment which is real as a
result of the faults in the pleadings to which exception is taken.
Unless the excipient can satisfy the court that there is such a point
of law or such real embarrassment the exception should be dismissed.








[9] This court7
has accepted the principle stated in the case of Mckelvey v Cown
NO
8
that:








It is a first principle
in dealing with matters of exception that, if evidence can be led
which can disclose a cause of action alleged in the pleading, that
particular pleading is not excipiable. A pleading is only excipiable
on the basis that no possible evidence led on the pleadings can
disclose a cause of action.’








The Legal Principles applied to the Law



[10] In the present matter the defendant alleges that during May 2007
it and the plaintiff concluded an addendum to the supply agreement
(incorporating the confidential letter) which is annexed to the
counterclaim as Annexure “A”.








[11] The general rule is that I must accept these factual averments
by the defendant as correct. If I do accept them as correct, they
will in my view, constitute a cause of action against the plaintiff.








[12] The question, however, is does Annexure ‘A’ to the
defendant’s counterclaim constitute an agreement? Mr. Coleman
who appeared for the plaintiff argued that ‘the addendum marked
as “A” and annexed to the defendant’s counterclaim
is not an agreement but a letter by defendant registering
‘concerns’’. Mr. Elago who appeared for the
defendant on the other hand argued that none of the grounds raised by
the plaintiff go to the heart of the defendant’s claim for
breach of contract.








[13] I will, in examining whether addendum ‘A’ is a
contract or not, in detail quote the contents of that addendum. The
document is on Easigas’s letter head and it reads as follows:



Dear Sir



Implementation for phase 2








This letter serves to confirm
our conversation between Yourself [i.e. Antonio Mendonca] and Mike
Criswell where it was agreed that Easigas main focus for Namibia is
in autogas and it’s financial will be focused for the
establishment of autogas sites only subject to volume verification.
Based on what was discussed Easigas will be investing directly on
Eros, Barry’s Auto, Otavi, and Oshakati only as priority sites
for phase 2.








The following installations are
proposed based on the volume indications that you provided.








Site Monthly Estimated Volume
Size Tank Dates



Otavi 30 000 Liters 9 000 Liters
March



Eros 30 000 Liters 5 000 Liters
March



Barry’s Auto 20 000 Liters
5 000 Liters March



Keetmanshoop 50 000 Liters 22
500 Liters March



Namutuni 80 000 Liters 22 500
Liters March



Oshakati 100 000 Liters 22 500
Liters March



Ondangwa Depot 90 000 Liters
June



Gobabis 18 000 Liters 9 000
Liters June



Swakopmund 50 000 Liters 22 500
Liters June



Walvis Bay 30 000 Liters 9 000
Liters June








We will obtain quotations from
the contractor for the priority installations after which the
contractor will be sent to carry out installations after
authorization of capex and subject to the availability of Tanks.








Yours faithfully.’








[14] The addendum clearly states what it is, it states that it is a
letter which confirms the conversation between Messers Mendonca and
Criswell. The addendum furthermore suggests that the conversation
between Messers Mendonca and Criswell resulted in an agreement that
the plaintiff’s focus for Namibia is autogas. I agree with Mr.
Coleman that the addendum is not an agreement but a letter which
confirms a conversation that took place between Messers Mendonca and
Criswell.








[15] Mr. Elago further argued
that if the matter were to proceed to trial the plaintiff will be
able to lead evidence as to what terms the parties agreed upon during
the conversation between
Messers Mendonca and Criswell. Mr.
Coleman’s reply to this argument was simply that a verbal
agreement will not be a valid amendment to the supply agreement,
especially if one has regard to paragraph 17.6 of that agreement
(i.e. the supply agreement). Paragraph 17.6 of the supply agreement
reads as follows:








17.6 No addition to or
variation or agreed termination of this agreement shall be of any
force or effect unless put in writing and signed by or on behalf of
the authorized representatives of the parties’.








[16] In the matter of Mushimba v Autogas Namibia (Pty) Ltd 9
this Court per Damaseb JP10
said the following:



Where the parties have
incorporated a non-variation clause in their written agreement, any
attempt to agree informally on a topic covered by the non-variation
clause is not permissible. See
Brisley
v Drotsky
2002 (4) SA
1 (SCA) (2002 (12) BCLR 1229);
HNR
Properties CC and Another v Standard Bank of SA Ltd

2004 (4) SA 471 (SCA) ([2004] 1 All SA 486) at 479C (SA). An oral
agreement to alter the terms of payment (e.g. extension of time)
where the parties have bound themselves to a non-variation clause is
therefore not permissible unless it is reduced to writing and agreed
by both parties:
Van
Tonder en 'n Ander v Van der Merwe en Andere
1993
(2) SA 552 (W)’








[17] I am therefore of the view that the purported verbal agreement
is not a valid and binding agreement between the parties and such the
defendant’s pleadings do not disclose a cause of action.








[18] The plaintiff prayed that the defendant’s counterclaim be
dismissed with costs. That would mean that the defendant would have
to start de novo with proceedings. In a decision11
by this Court accepted the principle that, in exceptions on the basis
that the pleadings do not disclose a cause of action, the Court
should set aside the pleadings and not dismiss the action.








[19] In the result the following order is made:









  1. The exception succeeds and the defendant’s counterclaim is set
    aside with costs;



  2. The defendant is given leave, if so advised, to file an amended
    counterclaim and declaration within 15 days from the delivery of
    this judgment.









_____________________________



S F UEITELE



Judge








APPEARANCES








PLAINTIFF: ADV COLEMAN



Instructed by Fisher, Quarmby
& Pfeiffer, Windhoek













DEFENDANT: MR PST ELAGO



Of Tjombe-Elago Law Firm Inc,
Windhoek









11970
(2) SA 391 (C) at 395D





21920
CPD 627 (at 630):





3infra,





41998
NR 176 (HC)





5infra





6See
Joubert (ed) Law of South Africa vol 3 part 1 (first re-issue by
Harms and Van der Walt, 1997) at para 186.)





7In
the case of July v Motor Vehicle Accident Fund 2010 (1) NR
368 (HC) at page 371





81980
(4) SA 525 (Z) at page 526





92008
(1) NR 253 (HC)





10At
page 260





11Total
Namibia (Pty) Ltd v Van der Merwe t/a Ampies Motors supra
footnote
4 at page 180.