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

• Jurisdiction: South Africa
• Judge: Blignault J
• Judgment Date: 04 June 2002
• Citation: 2002 (6) SA 256 (C)
• Docket Number: 1080/1999
• Counsel: W R E Duminy SC (with S P Rosenberg) for the plaintiff. J A Newdigate SC for the defendants.
• Court: Cape Provincial Division

Blignault J:

[1] Plaintiff is a company trading as Consol Glass. It carries on business as a manufacturer of glass products. It has a number of factories in South Africa, including one at Bellville South in the Western Cape. J

Blignault J

[2] First defendant is Twee Jonge Gezellen (Pty) Ltd, a company which carries on business as a winemaker at Twee Jonge A Gezellen, Tulbagh, Western Cape. Second defendant, Nicholas Charles Krone, is a shareholder in and director of first defendant. At all material times he represented first defendant in its dealings with plaintiff.

[3] During August 1991 first defendant concluded a general supply agreement with plaintiff for the supply of bottles to it for its B production of wine. This agreement contains the following clause under the heading 'Claims':

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

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 delivery the customer shall advise the customer's nearest sales office within 24 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 D 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 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 E respect of all claims and any decision undertaken by the company in this regard shall be binding on the customer.'

[4] During the period from 23 March 1998 to 25 August 1998 and pursuant to the supply agreement plaintiff sold and delivered bottles to first defendant for a total purchase price of R838 534,28. Plaintiff alleged that certain payments had been made F by first defendant in respect of this debt and that certain credits had been passed in its favour for a total amount of R213 704,77. First defendant was accordingly alleged to be indebted to plaintiff in an amount of R624 829,51. Second defendant bound himself as surety and co-principal debtor with first defendant for the payment of all G amounts which might be owing by first defendant to plaintiff. Plaintiff accordingly claimed this amount from first and second defendants jointly and severally.

[5] First and second defendants did not in their plea dispute plaintiff's claim as such save that they pleaded that the amount of first defendant's indebtedness was R605 854,53 and not H 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. I

[6] First defendant's counterclaim arose from a quantity of 29 720 of the bottles which it purchased during 1996 from plaintiff in terms of the supply agreement. These purchases were reflected in six invoices that cover the period from 20 June 1996 to 3 July 1996. The bottles were used by first defendant in the production of sparkling wine according to J

Blignault J

the method known as cap classique. This method entails that a second fermentation of the A sparkling wine takes place in the bottle itself.

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

'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 B 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 C techniques; and/or

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.' D

First defendant alleged that as a consequence of this breach of contract 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 E to cause particles of yeast to gradually move towards the neck of the bottle, could not be effectively executed; and/or

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 F

2.6.1.3

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

The loss of these quantities of sparkling wine allegedly resulted in a nett loss to first defendant of R1 747 639. First defendant alleged that it suffered additional losses under various heads. Its damages totalled R10 216 215 in all.

[8] First defendant formulated an alternative claim to the main counterclaim on the basis that plaintiff is liable as a H manufacturer of wine bottles, including bottles used for the bottling of cap classique sparkling wine. Alternatively, it is alleged that plaintiff is a merchant seller of such bottles and that it publicly professed to have attributes of skill and expert knowledge in respect of such bottles. The bottles sold by plaintiff, it is alleged, were latently defective and incapable of performing their intended I function in the three respects set out above. First defendant alleged that it accordingly suffered consequential damage in the sum of R10 216 215.

[9] Plaintiff filed a plea, as amended, to the counterclaim, as amended, in which it admitted the sale and delivery of the bottles in question but J

Blignault J

disputed the alleged breach of contract. In para 6 of the plea (ad para 2.5.1 of the counterclaim) it pleaded as A follows:

'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. B

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.

6.4

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

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

'8.3

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

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 D plaintiff to the first defendant would be manufactured by the plaintiff according to the plaintiff's standard manufacturing 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 E question;

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 F 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.'

Paragraph 22 of the plea to the counterclaim (ad subpara 3.8 of the counterclaim) reads as follows: G

22.1

These allegations are denied.

. . .

22.1.2

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

. . . H

22.2.1

The damage pleaded by the first defendant constitutes consequential loss.

22.2.2

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

22.3

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

[10] First defendant filed a replication to the plea, as amended, to the counterclaim, as amended. In para 1 of the replication it replies as follows to para 8.3 of plaintiff's amended plea: J

Blignault J

'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 A 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 B standard raw materials.''

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. C

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...