LA Consortium & Vending CC t/a La Enterprises v MTN Service Provider (Pty) Ltd

• Jurisdiction: South Africa
• Citation: 2011 (4) SA 577 (GSJ)

LA Consortium & Vending CC t/a La Enterprises v MTN Service Provider (Pty) Ltd
2011 (4) SA 577 (GSJ)

2011 (4) SA p577

Citation	2011 (4) SA 577 (GSJ)
Case No	A 5014/08
Court	South Gauteng High Court, Johannesburg
Judge	Malan J, Van Oosten J and Mokgoatlheng J
Heard	June 1, 2009
Judgment	August 17, 2009
Counsel	AP den Hartog for the appellant.; HJ Fischer for the respondent.

Flynote : Sleutelwoorde B

Evidence — Production and admission — Data messages — Computer-generated documents representing data messages — Definition of data message wide, such that covering real and hearsay evidence — Data messages still having to pass criteria for admission of hearsay evidence — Law of C Evidence Amendment Act 45 of 1988, s 3; and Electronic Communications and Transactions Act 25 of 2002, s 15.

Headnote : Kopnota

The definition of 'data message' in s 1 of the Electronic Communications and Transactions Act 25 of 2002 (ECT Act) is sufficiently wide to include not only real, but also hearsay, evidence. This, however, does not mean that D hearsay is admissible just because it is contained in a data message. The principle of 'functional equivalence' does not free data messages from the normal strictures of the law of evidence, but only from those referred to in s 15(1) of the ECT Act. It follows that, despite the very wide words of s 15(4), any hearsay contained in a data message must pass the criteria set out in s 3 of the Law of Evidence Amendment Act 45 of 1988. (Paragraph [19] at 592D – 593A.) E

The factors listed in s 3(1)(c) of the Evidence Amendment Act must all be considered. Since they overlap, their combined effect must also be given appropriate weight. This entails an enquiry into the reliability of the manner in which the data message was generated, stored or communicated and in which its integrity was maintained, the manner in which its originator was F identified, and any other relevant factor (s 15(3) of the ECT Act). (Paragraphs [20] and [21] at 593C – E and 594B – C.)

(See also MTN Service Provider (Pty) Ltd v LA Consortium & Vending CC t/a LA Enterprises, and Others 2011 (4) SA 562 (W).)

Cases Considered

Annotations: G

Reported cases

MTN Service Provider (Pty) Ltd v LA Consortium & Vending CC t/a LA Enterprises, and Others 2011 (4) SA 562 (W): confirmed on appeal

Ndlovu v Minister of Correctional Services and Another [2006] 4 All SA 165 (W): dictum at 172f – g applied H

S v Ndhlovu and Others 2002 (6) SA 305 (SCA) (2002 (2) SACR 325; [2002] 3 All SA 760): dictum in para [50] applied

S v Ndiki and Others 2008 (2) SACR 252 (Ck) ([2007] 2 All SA 185): dictum in para [8] applied

Trend Finance (Pty) Ltd and Another v Commissioner for SARS and Another [2005] 4 All SA 657 (C): referred to. I

Statutes Considered

Statutes

The Electronic Communications and Transactions Act 25 of 2002, s 15: see Juta's Statutes of South Africa 2009/10 vol 1 at 1-76

The Law of Evidence Amendment Act 45 of 1988, s 3: see Juta's Statutes of South Africa 2009/10 vol 1 at 2-812. J

2011 (4) SA p578

Case Information

A Appeal turning on the evidential value of computer-generated documents.

AP den Hartog for the appellant.

HJ Fischer for the respondent.

Cur adv vult. B

Postea (August 17).

Judgment

Malan J (Van Oosten J and Mokgoatlheng J concurring):

C [1] The appellant appeals against the judgment of CJ Claassen J ordering the appellant to pay to the respondent the amount of R 3 403 903,30, with interest and costs in respect of goods sold and delivered. The appeal is with the leave of the court a quo. The appeal is based primarily on two grounds: first, that the respondent failed to establish on a balance of probabilities that it had delivered the goods to the appellant; and, D secondly, that the computer-generated documents relied upon by the respondent amounted to inadmissible hearsay evidence. [1]

[2] The respondent sells cellular telephones and provides cellular-telephone services. The appellant conducted business as a distributor of the respondent's cellular telephones and services. Originally, the parties E concluded three written agreements (varied by subsequent addenda). Two of them are relevant for the purposes of the respondent's cause of action: the Electronic Distribution Agreement of 28 January 2002; and the Prepaid Distribution Agreement concluded on 2 April 2001. [2] In terms of the agreements, the respondent would sell and the appellant F would purchase: cellular handset kits; airtime in the form of physical vouchers, as well as 'airtime'. Over a period of time the appellant purchased these goods from the respondent. The parties conducted their commercial relationship for approximately two years and six months. Thereafter the respondent terminated the agreements in terms of the G respective termination provisions, ie by providing the appellant 90 days' written notice. During October 2003, and at the time of the notification of the intended cancellation of the agreements, and in terms of the agreements, all amounts outstanding at the date of termination became due, owing and payable by H the appellant to the respondent. [3] The terms of the agreements were never placed in dispute by the appellant. After the appellant received the respective letters of termination, the appellant placed no further orders, nor did the respondent deliver any further products to the appellant.

[3] The court a quo found in respect of claim A that the respondent 'had proved on a balance of probabilities that it had delivered the physical I stock reflected in the copy tax invoices vis-à-vis purchase orders 100948 and 100941 dated 10 October 2003'. The acknowledgements of

2011 (4) SA p579

Malan J (Van Oosten J and Mokgoatlheng J concurring)

receipt were signed by one Fiona Campbell and similarly bore the A appellant's company stamp. The court a quo found that, in terms of clause 7.8 of the Prepaid Distribution Agreement, same constituted 'absolute and incontrovertible proof of delivery of the stocks referred to therein'.

[4] In respect of claim B the court a quo found that Lodge's (the B respondent's senior manager, Operational Finance) evidence stood uncontradicted, and that the appellant had never queried the outstanding amounts on the statements delivered to it. There was no evidence to contradict the evidence of Lodge, as confirmed by Mpofu (the respondent's product manager), that the status of the purchase orders, namely 100954, 100947 and 100900 was in fact activated. In terms of the C Electronic Distribution Agreement, 'activation' constituted delivery of network packages. [4]

[5] The relevant parts of clause 6 of the Electronic Distribution Agreement provide: D

'6.1

The Distributor shall be entitled to place orders for Pre Paid Network Packages via electronic mail (e-mail) or any other means acceptable to the Service Provider and stipulated in the Business Specification annexed hereto . . . and in the format determined by the Service Provider, from time to time. A pro forma order form is annexed hereto as Annexure F. Any such e-mail orders shall be sent E to a designated e-mail address stipulated by the Service Provider, from time to time. Any e-mail order emanating from an e-mail address nominated by the Distributor from time to time, shall be prima facie proof of such order submitted by the Distributor.

. . .

6.3

After acceptance by the Service Provider of any order submitted in F accordance with 6.1 above, the Service Provider shall effect delivery of the Pre Paid Network Packages by way of electronic delivery in a format in accordance with the Business Specification. The parties wish to record that this format is considered by the Distributor to be a secure format and that the Distributor shall adhere to any security specifications set out by the Service Provider. . . . Such order shall be delivered to the Distributor by way G of e-mail or any other format stipulated by the Service Provider in the Business Specification from time to time, in an encrypted file in the denominations stipulated by the Distributor in each relevant order. Such Pre Paid Network Packages shall be inactive and shall only be elevated to a status zero i.e., activated status, once the H Distributor has acknowledged receipt of the encrypted file by way of return e-mail to a designated address nominated by the Service Provider, from time to time. In the event of the Distributor failing to acknowledge receipt of such encrypted file, within twenty four (24) hours of such file being sent by the Service Provider to the Distributor, the Service Provider shall be entitled to cancel such I order or any part thereof and the Distributor shall be obliged to re-submit an order in accordance with the provisions of 6.1 above.

6.4

Receipt of the Pre Paid Network Packages by the Distributor shall be deemed to have taken place either once acknowledgement of

2011 (4) SA p580

Malan J (Van Oosten J and Mokgoatlheng J concurring)

A the receipt as referred to in 6.3 above, has been forwarded by the Distributor to the Service Provider or such Pre Paid Network Packages have been activated by the Service Provider for use on the Network or any one of the Pre Paid Network Packages contained in any one file is utilised on the Network, whichever is the sooner. Receipt of the Pre Paid Network Packages by the B Distributor shall constitute delivery of such Pre Paid Network Packages to the Distributor.'

The appellant never disputed that delivery took place in respect of the orders referred to, nor did it dispute that it failed to pay the amount outstanding in this regard. No evidence was led by the appellant C disputing the correctness of the amounts paid by the appellant, as reflected in the summary of transactions. [5]

[6] In terms of claim A, the respondent claimed...