REPUBLIC OF NAMIBIA
HIGH COURT OF NAMIBIA
MAIN DIVISION, WINDHOEK
Case no: I
In the matter between:
OBM ENGINEERING &
PETROLEUM DISTRIBUTORS CC ........................PLAINTIFF
TOTAL NAMIBIA (PTY)
Neutral citation: OBM
Engineering & Petroleum Distributors CC v Total Namibia (Pty) Ltd
(I 3625/2007)  NAHCMD 20 (28 January 2013)
Coram: MILLER AJ
to rectify written agreement alleged to be ambigious – Words
used by the parties in the agreement to be given their ordinary
meaning unless that would lead to an absurdity – Application
plaintiff and defendant concluded a written agreement –
Defendant claims that the words “source documents” and
“verified source documents” was intended to exclude
delivery notes – Agreement therefore ambigious,
Held that determining
what the intention of the parties was, requires of the Court to give
the words used their ordinary meaning unless that would result in
some absurdity – The intention of the parties is to be gathered
from how it is expressed in the agreement.
Held that in casu giving
the words used their ordinary meaning no ambiguity arises –
The application is
dismissed with costs, such costs will include the costs of one
instructing counsel and two instructed counsel.
MILLER AJ :
 The parties are
embroiled in litigation which dates back to the year 2007. Thus far
all attempts to resolve the matter proved to be elusive. Whether or
not the application I am now called upon to decide will facilitate
the process remains to be seen.
 The matter originated in October
2003 when the parties concluded a written agreement in terms whereof
the defendant agreed to supply fuel to the plaintiff at
pre-determined prices. In addition the defendant debited the
plaintiff with an additional amount referred to in the papers as the
“transport differential”. This agreement endured until
August 2007, when it was terminated.
 Shortly thereafter and during
December 2007 the plaintiff issued summons against the defendant. The
basis of the claim at that stage was that it, the plaintiff, had been
induced to pay the transport differential. As a result of a
misrepresentation made to it by the defendant that the transport
differential could be claimed back from the Government of Namibia.
This representation it alleged was false. As a consequence the
plaintiff claimed payment of the amount of N$4 609 940.72 together
with certain additional relief.
 In response, the defendant
delivered a plea and a counterclaim. It denied that any
misrepresentation had been made, apart from alleging that the alleged
representation made was a mistake and could in any event not have
caused any damage to the plaintiff because it had been made after the
agreement was terminated. In the first of the two counterclaims the
defendant claimed payment of the amount of N$265, 876.22 which it
alleged was due as a result thereof that it had intermittently under
claimed the transport differential. In the second counterclaim the
defendant claimed payment of the amount of N$3 573 465.22 which it
alleged, the plaintiff owed the defendant in respect of the purchase
of fuel products which it had failed to pay.
 The plaintiff subsequently amended
paragraph 9 of its claim dealing with the alleged misrepresentation
by adding an allegation that it was compelled to pay the amounts
claimed by the defendant as due and payable under the threat of
having its account suspended if it did not pay the amounts claimed by
the defendant in the invoices and reconciliations it prepared and
submitted to the plaintiff.
 In respect of the counterclaim in
respect of purchase of fuel products delivered to the plaintiff the
plaintiff denied that it owed the defendant anything in that regard.
I mention in passing that consequent upon the amendments the
plaintiffs’ claim escalated to N$6 760 920.88.
 The matter was then enrolled for
hearing before Hoff J during October 2010.
 Shortly before the hearing and on
19 October 2010, the defendant launched an application in terms of
Rule 33 (4) of the Rules of the High Court. In that application it
sought an order that the question as to whether the defendant was in
law entitled to raise the transport differential, be separated. It
contended that once that issue was resolved what remained was an
 This application became opposed.
Having heard argument on the application Hoff J reserved his judgment
until the next day at 10h00.
 However as matters turned out,
and prior to a ruling issued by Hoff J, the legal representatives of
the parties convened to explore a possible settlement of the matter.
 The upshot of that was that a
written agreement of settlement was concluded and signed by the
parties. The agreement was then made an order of court. It is this
agreement which is the subject of the present proceedings before me.
The agreement reads as follows:
court will be requested to postpone the hearing sine die and
to incorporate this agreement in the aforesaid order.
accountants for the parties will be instructed to verify all
transactions underlying the current account of plaintiff with
defendant (with reference to the source documents) in order to
determine, by agreement, any liability of defendant to plaintiff or
vice versa in accordance with the following:
litres transported by plaintiff from Walvis Bay to Otjiwarongo to
be calculated at 14 c / litre.
litres delivered and transported by plaintiff from Otjiwarongo to
defendant’s customers at the bulk transport rate of 14 c /
litre for the initial period p to 31 June 2006 and thereafter at
the bulk transport rate of 15 c / litre as from 1 July 2006.
respect of the same litres referred to in clause 2.2 above, a
delivery / handling fee as stipulated in clause 7.2 of the
agreement attached as annexure “A” to plaintiff’s
particulars of claim (annexure “A”).
respect of the rebate, as per clause 7.1 of annexure “A”.
COC to be debited and the same COC to be credited in respect of
purchases by plaintiff and deliveries to defendant’s
deems the opening balance to be zero as at 1 June 2005.
is entitled to prove a different opening balance with reference to
source documents, but subject thereto that such source documents
will only relate to the contract period in annexure “A”.
OF COC PRICE
COC price in clause 2.5 above shall be the price as debited by
defendant in respect of upliftment at Walvis Bay.
shall pay an amount to be determined from annexure “Z”
to plaintiff’s amended particulars of claim but limited to the
time period stipulated in paragraph 14 of plaintiff’s amended
particulars of claim, plus interest at the Namibian mora rate,
calculated as from 1 September 2007 to date of final payment.
result of the lubrication claim shall not affect the liability for
costs referred to below and any amount found to be due shall be paid
within fourteen (14) calendar days of final determination.
requires time until 30 November 2010 to reconsider its verification
as summarized in annexure “A” to the summary filed in
respect of Mr. Dreyer’s expert summary.
legal practitioner will deliver to plaintiff’s legal
practitioner on or before 31 January 2011 defendant’s response
to plaintiff’s said verification.
plaintiff’s amendment, if any, and defendant’s response,
shall be valid only insofar as supported by verified source
or before 15 February 2011, or such later date as may be requested
by plaintiff on reasonable notice, a meeting will be held between
the parties’ legal presentatives in Windhoek at a venue and
time to be agreed upon for the following purpose:
debate any issues raised in defendant’s response and by
plaintiff in reply to defendant’s response (to be provided to
defendant at least seven (7) calendar days prior to such meeting,
compile a list of issues, if any, which the parties are unable to
trial will continue for the purpose of adjudicating any remaining
issues, including the costs of such litigation.
plaintiff does not deliver its additional verification on or before
30 November 2010, annexure “A” will stand as plaintiff’s
defendant does not deliver its response on or before 31 January
2011, plaintiff’s verification shall be accepted.
on the outstanding balance determined as envisaged in clause 2
above, will be calculated in accordance with the Namibian mora
rate, calculated as simple interest as from 1 September 2007 to
date of final payment.
party ultimately liable for payment to the other shall be liable for
costs on the following bases:
party and party scale.
taxation by a tax consultant in Windhoek to be agreed upon between
the event of defendant being entitled to costs, one instructing and
two instructed counsel, plus the actual fees billed by the
correspondent (Fisher, Quarmby & Pfeifer).
the event of plaintiff being entitled to costs, one instructing and
two instructed counsel.
purposes of any taxation or agreement, the parties agree that the
parties’ experts are qualified and necessary witnesses.
of the amount envisaged in clause 2 above shall be made within
fourteen (14) calendar days of final determination thereof, which
payment shall not be affected by the outcome of any litigation
envisaged in clause 11.3 above.
of the amount envisaged in clause 15 above shall be made within
fourteen (14) calendar days of taxation or agreement.
Dated at WINDHOEK on this 27 day of
AND ON BEHALF OF THE PLAINTIFF
at WINDHOEK on this 27 day of October 2010.
AND ON BEHALF OF THE DEFENDANT
 In the result the matter was
postponed sine die to enable the parties to give effect to the
agreement, and to continue if needs be on any remaining issues which
might still remain thereafter.
 In the interim and subsequent to
the implementation of the judicial case management system, the matter
was assigned to me as the managing judge.
 A number of case management
meetings ensued during the course of which settlement of the matter a
referral to private arbitration were mooted, none of which
 Ultimately the defendant
intimated that it intended to move an application to rectify the
settlement agreement and the order issued by Hoff J pursuant thereto.
I accordingly made the necessary orders and the matter was enrolled
for hearing on 20 November 2012.
 I heard argument from Mr. du Toit
SC who was assisted by Mr. Meiring on behalf of the defendant and by
Mr. Heathcote SC who was assisted by Ms. de Jager who appeared on
behalf of the plaintiff. I record my appreciation to all counsel for
the heads of argument they prepared and for the submissions made
during the course of the hearing.
 I now turn to consider the
defendant’s application. I will continue to refer to the
parties as the plaintiff and the defendant respectively.
 The relief sought by the
defendant is the following:
Declaring that any verification of transactions referred to in the
agreement between the parties dated 27 October 2010 which relies on
invoices, credit notes and debit notes properly complies with the
requirements of the agreement (and the court order pursuant thereto)
and need not be additionally supported by any proof of delivery.
to paragraph 1:
Declaring that the agreement purportedly arrived at between the
parties on 27 October 2010 is of no force or effect, and rescinding
the court order relating thereto.
to paragraph 1 and 2:
Rectifying and varying the agreement between the parties dated 27
October 2010, and the court order pursuant thereby by the insertion
of the following words after the words “source documents”
or “verified source documents” wherever they appear,
“(which need only to be invoices, debit notes or credit
 In essence and as was
foreshadowed the defendants’ heads of argument, the defendant
contends that the accounting exercise contemplated by the agreement
must be done with reference to invoices, credit notes and debit notes
only. The defendant contends that delivery notes should be left out
of the equation contrary to what the plaintiff contends.
 What this amounts to is that the
phrases “source documents” and “verified source
documents” where it appears in the agreement is ambigious and
must be construed to exclude delivery notes. As an alternative
submission the defendant contends that if it was intended that
delivery notes were to be regarded as source documents it would not
have consented thereto. Consequently it is submitted there was no
consensus between the parties. This apparent belief is premised on
the fact that, so it is submitted, on the pleadings the amount of
fuel delivered to the plaintiff was never an issue and consequently
any reference to delivery notes was superfluous. Consequently its
intention when entering into the agreement was that delivery notes
would not need to be referred to.
The Legal Principle Applicable
 Firstly I agree with the
submissions made on behalf of the defendant that should the agreement
be found to be ambigious and in need of rectification, so would the
court’s order issued pursuant thereto.
 Secondly and insofar as evidence
of the surrounding circumstances and negotiations which culminated in
the conclusion of the written agreement are admissible and relevant,
I will on the papers before me proceed to accept as correct the facts
admitted by the plaintiff and its version of the disputed facts. I do
so in accordance with the well established and so called Plascon
 As a general role where terms of
a contract are not ambigious in relation to the intention of the
parties, extraneous evidence of what the parties intended is not
admissible. Instead in those circumstances the words used in the
agreement should not be given their full effect.
Hodrais v Freeman and Freeman
1948 (3) SA 720 (W)
Sonorep (SA) (Pty) Ltd v Motorcraft
(Pty) Ltd 1981 (1) SA 889 (N)
In Scottish Union and National
Insurance Co. Ltd v Native Accruiting Corp. Ltd 1934 AD 458 the
Court formulated the approach as follows:
“It has been repeatedly in our
Courts that in construing every kind of written contract the Court
must give effect of the grammatical and ordinary meaning of the words
used therein. In ascertaining this meaning, we must give to the words
their plain ordinary and popular meaning unless it appears clearly
from the context that both the parties intended them to bear a
different meaning. If therefore there is no ambiguity in the words of
the contract, there is no room for a more reasonable interpretation
than the words themselves suggest.”
In Southline Retail CC v BP Namibia
(Pty) Ltd 2011 (2) NR 562 (SC) The Supreme Court held that:
rule of interpretation is to ascertain not what the parties’
intention was, but what the language used in the contract means, i.e.
what their intention was as expressed in the contract.”
 It follows that as a first step I
must consider the agreement giving the words used their ordinary
grammatical and popular meaning. If having done so, I come to the
conclusion that there is no ambiguity or absurdity or repugnance with
the rest of the agreement and the purpose thereof, that will be the
end of the enquiry. Any reference to extraneous evidence will not be
Applying the Law to the Facts
 It remains to consider the
agreement reached against the applicable legal principles I dealt
 The agreement states its
underlying purpose in express terms in paragraph 2 thereof.
 It expressly states that the
purpose of the exercise the agreement provides for is to:
all the transactions underlying the current account of the plaintiff
with the defendant.
verifying process will be done with reference to the source
documents to determine.
agreement any, liability of defendant to plaintiff or vice versa (my
 It is immediately apparent that
the parties chose to use terminology much wider than a more confined
issue relating only to the transport differential.
 Provision is then made for the
parties to be provided time to the plaintiff to verify its
calculation and for the defendant to respond thereto with reference
only to verified source documents.
 The phrases “source
documents” and “verified source documents” are
phrases of wide import.
 In the context of the agreement
as a whole it will be any document which relates to or establish the
existence of a transaction concluded. There is nothing in the
agreement which suggest that a delivery note, which plainly in a
source document in relation to a transaction concluded between the
parties is to be excluded. If the parties had intended to exclude
delivery notes I have no doubt that they would have made provision
for that in the agreement.
 It would seem to me that the
invoices could only be verified with reference to inter alia the
delivery notes from which the invoices were prepared.
 I conclude in the result that the
agreement is not ambigious and that the interpretation contacted for
by the defendant is not borne out by the words used in the agreement.
 In the result the application is
dismissed with costs which will include the costs of one instructing
and two instructed counsel.
P J MILLER
PLAINTIFF : R HEATHCOTE
SC (with him B de Jager)
Instructed by Ellis Shilengudwa
DEFENDANT: S DU TOIT SC
(with him JJ Meiring)
Instructed by Fisher,
Quarmby & Pfeifer, Windhoek.