Consol Ltd t/a Consol Glass v Twee Jonge Gezellen (Pty) Ltd and Another (2)

• Jurisdiction: South Africa
• Judge: Blignault J
• Judgment Date: 22 July 2005
• Citation: 2005 (6) SA 23 (C)
• Docket Number: 11080/99
• Counsel: S P Rosenberg SC for the plaintiff. R S van Riet SC for the defendants.
• Court: Cape Provincial Division

Blignault J: H

[1] This is the beginning of the second round in the litigation between these parties in regard to bottles supplied by plaintiff to first defendant for the making of sparkling wine by means of the method known as cap classique. The first round culminated in success for plaintiff in the Supreme Court of Appeal. Its reliance upon an exemption clause in the agreement between the parties was upheld. The judgment is reported as Consol Ltd t/a Consol Glass v Twee I Jonge Gezellen (Pty) Ltd and Another 2005 (6) SA 1 (SCA) ([2004] 1 All SA 1) (the SCA Consol judgment). The second round commenced with an application by first defendant to amend its pleadings in order to attempt to avoid the effect of the exemption clause. J

Blignault J

The existing pleadings A

[2] Plaintiff, a company trading as Consol Glass, carries on business as a manufacturer of glass procucts. It instituted this action against first defendant, a company which carries on business as a winemaker at Twee Jonge Gezellen, Tulbagh, Western Cape and second defendant, a shareholder in and director of first defendant, for payment of B R624 829,51. This amount represents the balance owing to plaintiff in respect of bottles sold and delivered to first defendant. Second defendant is alleged to be liable by virtue of a suretyship concluded by him in favour of plaintiff.

[3] First and second defendants did not in their plea dispute plaintiff's claim save that they pleaded that the amount of C first defendant's indebtedness was R605 854,53 and not R624 829,51 as alleged by plaintiff. They pleaded, however, that they were excused from paying that amount to plaintiff by reason of the fact that first defendant had a counterclaim against plaintiff which exceeded the amount of plaintiff's claim. The counterclaim arose from D alleged defects in a quantity of 29 720 of the bottles which it purchased during 1996 from plaintiff in terms of the supply agreement between the parties. The bottles were used by first defendant in the production of sparkling wine according to the method known as cap classique. E

[4] First defendant's principal cause of action was set forth as follows in para 2.5.1 of its counterclaim:

'2.5.1

In material and fundamental breach of the terms of the supply agreement, the aforesaid bottles delivered to first defendant were not manufactured by plaintiff according to its F standard manufacturing procedures and/or techniques and/or utilising standard raw materials, more particularly in that:

2.5.1.1

Freon 134A gas instead of 152A gas was used; and/or

2.5.1.2

the method of application of the Freon gas used was not in accordance with plaintiff's standard procedures and/or techniques; and/or G

2.5.1.3

excessive and/or irregular quantities of Freon gas was used; and/or

2.5.1.4

Freon 134A gas was used, which had not been utilised by plaintiff previously.' H

First defendant alleged that as a consequence of this breach of contract by plaintiff it lost 29 720 bottles of 1994 vintage cap classique sparkling wine due to the fact that:

'2.6.1.1

riddling, being the process whereby bottles are regularly turned whilst the neck of the bottle is lower than the bottom to cause particles of yeast to gradually move towards the neck of the bottle, could not be effectively executed; and/or I

2.6.1.2

disgorgement, being the process whereby yeast residue is removed from the neck of the bottles by freezing after riddling has taken place, could not be effectively executed; and/or J

Blignault J

2.6.1.3

the fermentation process was undermined, in that wine from a homogeneous blend fermented incompletely and/or inconsistently A in the bottles with fluctuations from bottle to bottle.'

The loss of these quantities of sparkling wine allegedly resulted in a net loss to first defendant of R1 747 639. First defendant alleged that it suffered additional losses under various heads. The sum total of its losses amounted to R10 216 215. B

[5] First defendant put forward an alternative claim in para 3 of the counterclaim on the basis that plaintiff is liable as a manufacturer of wine bottles, including bottles used for the bottling of cap classique sparkling wine, alternatively, that plaintiff is a merchant seller of such bottles and that it publicly C professed to have attributes of skill and expert knowledge in respect of such bottles. First defendant alleged that the bottles sold to it by plaintiff were latently defective and incapable of performing their intended function in the three respects set out above.

[6] In defending the counterclaim plaintiff relied inter alia on the provisions of an exemption clause in the agreement D between the parties. This clause, which bears the heading 'Claims', provides as follows:

'All goods supplied are manufactured according to the company's standard manufacturing procedures and techniques, utilising standard raw materials.

No claims shall be recognised by the company unless lodged within 21 days after receipt of goods. If goods are damaged at the time of E delivery the customer shall advise the customer's nearest sales office within twenty-four hours of delivery. No guarantee or warranty regarding supply or quantity is given or implied unless specifically stated in writing by an authorised company representative. Where any written warranty is given, the company's liability will be limited to replacement of defective goods on proven non-compliance with the warranty or accepted specification. Under no circumstances, with or without written guarantee or warranty, shall the company be liable for F any consequential loss or damage howsoever arising.

The customer shall have no claim for short delivery unless the quantity short delivered is endorsed on all copies of a delivery note presented for signature. The company shall be the sole adjudicator in respect of all claims and any decision undertaken by the company in this regard shall be binding on the customer.' G

[7] Plaintiff filed a plea to the counterclaim in which it admitted the sale and delivery of the bottles in question but disputed the alleged breach of contract. In para 6 of the plea (ad para 2.5.1 of the counterclaim) plaintiff pleaded as follows: H

'6.1

It is denied that the plaintiff breached the terms of the supply agreement.

6.2

It is admitted that the bottles were internally treated with Freon 134A gas.

6.3

The Freon 134A gas was applied in accordance with the plaintiff's standard procedures and techniques, which had been in use since March 1994. I

6.4

Save as aforesaid all the allegations contained in this paragraph are denied.'

Paragraph 8.3 of plaintiff's plea to the counterclaim (ad para 2.6.1 of the counterclaim) read as follows: J

Blignault J

'8.3

In any event, the plaintiff repeats paras 5.3 to 5.7 of its particulars of claim and pleads as follows: A

8.3.1

In the event of it being found that it was an express term of the supply agreement that all glass bottles supplied by the plaintiff to the first defendant would be manufactured by the plaintiff according to the plaintiff's standard manufacturing B procedures and techniques, utilising standard raw materials, and that the plaintiff was in breach thereof, such term is a written warranty as contemplated by clause 8.3 of the supply agreement and accordingly the plaintiff's liability is limited to the replacement of the bottles in question; C

8.3.2

the damage pleaded by the first defendant in para 2.6 constitutes consequential loss;

8.3.3

no claim in respect of the said bottles was lodged by the first defendant with the plaintiff within 21 days after the receipt of the bottles by the first defendant.

8.4

In the premises, the claim advanced by the first defendant in para 2.6 is not competent.' D

Paragraph 22 of the plea to the counterclaim (ad subpara 3.8 of the counterclaim) contained the following allegations:

'22.2.1

The plaintiff furnished the first defendant with no written warranty against latent defects. E

22.2.2

The damage pleaded by the first defendant constitutes consequential loss.

22.2.3

No claim was lodged by the first defendant with the plaintiff within 21 days of the receipt of the bottles by the first defendant. F

22.3

In the premises, the claim advanced by the first defendant in para 3.8 is not competent.'

[8] First defendant filed a replication to the plea to the counterclaim. In para 1 of the replication it replied as follows to para 8.3 of plaintiff's plea: G

'1.1

The provisions of the agreement described in paras 5.3 to 5.7 of the particulars of plaintiff's claim form part of a clause of the agreement, with the heading ''Claims'', which commences with the following words:''All goods supplied are manufactured according to the company's standard manufacturing procedures and techniques, utilising standard raw materials.'' H

1.2

Upon a proper construction of such clause, plaintiff would only be entitled to rely upon the limitations placed upon its liability as set out therein in the event of its complying with the first sentence thereof, ie in the event of the goods supplied being manufactured according to the company's standard manufacturing procedures and techniques, utilising standard raw materials. I

1.3

Plaintiff failed to comply with its obligations described in such clause, as more fully set out in para 2.5 of first defendant's claim in reconvention. J

Blignault J

1.4

In the premises, plaintiff is not entitled to rely upon the provisions of the agreement described in the abovementioned paragraph. A

1.5

As regards the provision of the agreement described in para 5.3 of the particulars of claim, first defendant alleges, in any event, that it was a tacit term of the agreement that...