Fujitsu Services Core (Pty) Limited v Schenker South Africa (Pty) Limited

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Zondo CJ, Maya DCJ, Baqwa AJ, Kollapen J, Madlanga J, Majiedt J, Mathopo J, Mbatha AJ, Mhlantla J, Rogers J and Tshiqi J
• Judgment Date: 28 June 2023
• Citation: 2023 JDR 2332 (CC)
• Hearing Date: 01 November 2022
• Docket Number: CCT 32/22
• Court: Constitutional Court

Mathopo J (Baqwa AJ, Kollapen J, Madlanga J and Majiedt J concurring):

[1]

This application for leave to appeal raises two issues on the merits: first, whether the exemption clauses relied upon by Schenker South Africa (Pty) Limited (Schenker), the respondent, can be interpreted as excluding liability for wrongful acts committed outside the contractual context, including theft by an employee; and second, whether the exemption clause offends public policy. The issues surface in this application for leave to appeal by Fujitsu Services Core (Pty) Limited (Fujitsu), the applicant, against the judgment and order of the Supreme Court of Appeal. That Court reversed the decision of the High Court, Gauteng Local Division, Johannesburg, which held that, properly interpreted, the exemption clause relied upon by Schenker did not apply in circumstances where the contract is not being executed.

Background facts

[2]

On 10 July 2009, Fujitsu, an importer, seller and distributor of laptops, computers and accessories concluded a national distribution agreement with Schenker, a company conducting business as a warehouse operator, freight forwarder, logistics

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manager, distributor and forwarding agent. [1] This agreement was subject to the South African Association of Freight Forwarders (SAAFF) trading terms and conditions. It was a material term of the agreement that Schenker would collect, clear and carry goods and thereafter deliver them to Fujitsu after attending to the necessary custom clearance.

[3]

In April 2012, Fujitsu purchased and imported a consignment of laptops from Germany, whereupon it engaged the services of Schenker to assist it with the logistics, freight forwarding, warehousing and clearing of the consignment. This would entail Schenker importing the goods into South Africa, and receiving them from the airline. A consignment of Fujitsu’s laptops and accessories arrived at the South African Airways Cargo Warehouse (SAA Cargo Warehouse) at OR Tambo International Airport (ORTIA) on 21 and 22 June 2012.

[4]

At all material times Mr Wilfred Bongani Lerama, was employed by Schenker as a drawing clerk responsible for, among other things, the collection of cargo at the SAA Cargo Warehouse. Mr Lerama, having passed a vetting process was issued with a security card known as an identity verification (IVS) card, was given all relevant airways bills and custom clearances necessary for the cargo to be released from the SAA Cargo Warehouse. On 23 June 2012, driving an unmarked hired truck, Mr Lerama collected the consignment of laptops and accessories after producing the company’s security and release documents. He disappeared with the goods and never returned to work, thus effectively stealing the goods. As a result of the theft, Fujitsu instituted an action for damages against Schenker.

[5]

The central issue before the High Court and the Supreme Court of Appeal was the proper interpretation of the exemption clauses. Schenker initially resisted the case on the basis that Mr Lerama was acting on a frolic of his own and not within the

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course and scope of his employment. Later, it became common cause in those courts that at the time of the theft, Mr Lerama had acted within the course and scope of his employment with Schenker and that, unless liability was excluded in terms of the contract, Schenker was vicariously liable for the loss suffered as a result of Mr Lerama’s theft. Even though vicarious liability was conceded, the High Court conducted a comprehensive analysis of the principle and concluded that:

“[I]t follows from the aforegoing that Lerama’s actions were sufficiently and so closely related to the functions he was required to perform that vicariously liability should be visited on Schenker. Moreover, the aforegoing also, in my judgment, demonstrates that Schenker created or enhanced the risk which, when applying the Stallion principles, makes Schenker vicariously liable for the damages arising from the theft. If regard is had to the recent development of the law relating to vicarious liability in ‘deviation cases’ and the approach adopted in Stallion Security, there can in my view be no doubt that the defendant is vicariously liable for the theft perpetrated by Lerama.” [2]

[6]

The issues in this Court were expanded to include an attack on the exemption clause on the basis that it is contrary to public policy. Accordingly, at the heart of the matter is the proper interpretation of clauses 17, 40, and 41 of the SAAFF standard terms and conditions.

[7]

Clause 17 provides:

“Except under special arrangements previously made in writing [Schenker] will not accept or deal with bullion, coin, precious stones, jewellery, valuables, antiques, pictures, human remains, livestock or plants. Should [Fujitsu] nevertheless deliver such goods to [Schenker] or cause [Schenker] to handle or deal with any such goods otherwise than under special arrangements previously made in writing [Schenker] shall incur no liability whatsoever in respect of such goods, and in particular, shall incur no liability in respect of its negligent acts or omissions in respect of such goods. A claim, if any, against [Schenker] in respect of the goods referred to in this clause 17 shall be governed by the provisions of clauses 40 and 41.”

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[8]

Clause 40, in relevant part, provides:

“40.1

Subject to the provisions of clause 40.2 and clause 41, [Schenker] shall not be liable for any claim of whatsoever nature (whether in contract or in delict) and whether for damages or otherwise, howsoever arising including but without limiting the generality of the aforesaid —

40.1.1

any negligent act of omission or statement by [Schenker] or its servants, agents and nominees; and/or

. . .

40.1.3

ny loss damage or expense arising from or in any way connected with the marking, labelling, numbering, non-delivery or mis-delivery of any goods; and/or

. . .

Unless —

a)

such claims arise from a grossly negligent act or omission on the part of [Schenker] or its servants; and

b)

such claim arises at a time when the goods in question are in the actual custody of [Schenker] and under its control.”

[9]

Clause 41 provides that:

“41.1

In those cases where [Schenker] is liable to the customer in terms of clause 40.1, in no such case whatsoever shall any liability of [Schenker], howsoever arising, exceed whichever is the least of the following respective amounts:

41.1.1

the value of the goods evidenced by the relevant documentation or declared by the customer for customs purposes or for any purpose connected with their transportation;

41.1.2

the value of the goods declared for insurance purposes;

41.1.3

double the amount of the fees raised by [Schenker] for its services in connection with the goods, but excluding any amounts payable to sub- contractors, agents and third parties.

41.2

If it is desired that the liability of [Schenker] in those cases where it is liable to the customer in terms of clause 40.1 should not be governed by the limits

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referred to in clause 41.1 written notice thereof must be received by [Schenker] before any goods or documents are entrusted to or delivered to or into the control of [Schenker] (or its agent or sub-contractor), together with a statement of the value of the goods. Upon receipt of such notice [Schenker] may in the exercise of its absolute discretion agree in writing to its liability being increased to a maximum amount equivalent to the amount stated in the notice, in which case it will be entitled to effect special insurance to cover its maximum liability and the party giving the notice shall be deemed, by so doing, to have agreed and undertaken to pay to [Schenker] the amount of the premium payable by [Schenker] for such insurance. If [Schenker] does not so agree the limits referred to in clause 41.1 shall apply.”

Litigation history High Court

[10]

Fujitsu instituted a delictual claim for damages against Schenker on the basis that Schenker was vicariously liable for the loss suffered as a result of the theft. Schenker disputed the claim on the ground that clause 17, read with clauses 40 and 41, exempted it from liability.

[11]

The High Court held that theft was an act outside the performance of the parties’ contract and that the exemption clause did not apply. The High Court reasoned that Schenker should not be allowed to rely on the exemption clause in circumstances where the contract was not being executed. It concluded that, if Schenker intended the exclusion clauses to apply to the delictual claim of theft, it ought to have spelt it out with the necessary precision and clarity. It held that the parties did not contemplate that clauses 17, 40 and 41 would encompass a delictual claim based on theft. The Court found that the clauses did not exclude liability for theft. It relied on Hotels, Inns and Resorts, [3] where it was held that, absent a clear contrary intention, an exemption clause should be restrictively interpreted, and should not be interpreted to apply to conduct which does not constitute execution of the contract. Having found that the clauses did not exclude liability for theft, it upheld

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Fujitsu’s arguments. The High Court granted leave to appeal to the Supreme Court of Appeal.

Supreme Court of Appeal

[12]

Before the Supreme Court of Appeal, the sole issue for determination was whether Fujitsu’s delictual claim based on theft was excluded by...