Spes Bona Bank v Portals Water Treatment

• Jurisdiction: South Africa
• Judgment Date: 15 August 1980
• Citation: 1981 (1) SA 618 (W)

Spes Bona Bank v Portals Water Treatment
1981 (1) SA 618 (W)

1981 (1) SA p618

Citation	1981 (1) SA 618 (W)
Court	Witwatersrand Local Division
Judge	Nestadt J
Heard	May 14, 1979; May 15, 1979; August 4, 1980; August 5, 1980; August 6, 1980; August 7, 1980; August 8, 1980; August 11, 1980; August 12, 1980
Judgment	August 15, 1980

Flynote : Sleutelwoorde G

Contract — Formation of — By conduct — Defendant selling certain plant to T — T arranging finance for purchase thereof from plaintiff — Plaintiff arranging with T that it would purchase equipment from defendant and lease it to T — T arranging for defendant to invoice plaintiff for 75 per cent H of purchase price of plant — Plaintiff paying amount invoiced to defendant believing it to be total purchase price — Defendant not being aware of lease arrangements and that plaintiff, not T, was to become owner of plant — T liquidated before delivery of plant — Plaintiff alleging that invoice had constituted offer to sell which it had accepted by payment — Circumstances not amounting to the conclusion of a tacit agreement by conduct — Plaintiff's claims dismissed.

Words and phrases — "Invoice" — Meaning of.

Headnote : Kopnota

An invoice can, depending on the circumstances, be: (i) a notification that the

1981 (1) SA p619

goods therein mentioned have been sent or are being sent to the addressee thereof or some other destination; (ii) a claim for payment, usually, though not necessarily, based on an underlying, already concluded contract of purchase and sale between the parties; (iii) an offer to sell.

A The defendant had sold certain mining plant to T, which had in turn arranged with plaintiff to finance the purchase price. It was agreed between plaintiff and T that plaintiff would purchase the equipment itself and lease it to T. There were no direct negotiations between plaintiff and defendant, but defendant was asked by T to invoice plaintiff for 75 per cent of the purchase price. This defendant did, however, not B indicating on its invoice that only 75 per cent of, and not the whole, purchase price was reflected therein. Nor did the invoice state, as requested by T, that the plant was "as delivered to T on your behalf"; what was stated in the invoice was merely "for delivery" to T. The plaintiff paid the invoiced amount to the defendant, believing it to be the total purchase price of the equipment. It appeared further that defendant had not been made aware that plaintiff, and not T, was to become C owner of the plant. By the time that T was subsequently placed in liquidation the plant had not yet been delivered to it. When plaintiff claimed delivery of the plant from defendant it was advised that delivery would not be effected until the remaining 25 per cent of the purchase price had been paid. In an action for cancellation of the contract and return of the amount paid by it to defendant, alternatively delivery of the plant, plaintiff alleged that the invoice had constituted an offer to it by defendant to sell the plant to plaintiff for the amount stated D therein, which offer plaintiff had tacitly accepted by paying that amount, which payment had been accepted by the defendant.

Held, that the invoice did not unequivocally constitute an offer to sell.

Held, further, that the circumstances did not amount to the conclusion of a tacit agreement of purchase and sale by conduct between the parties.

Held, accordingly, that the plaintiff's claims should be dismissed. E

Case Information

Action for the cancellation of an alleged contract, repayment of money paid thereunder and certain other relief. The facts appear from the reasons for judgment.

R Kruger SC (with him J C Labuschagne) for the plaintiff. J H Coetzee SC (with him M S Stegmann) for the defendant. F

Cur adv vult.

Postea (August 15).

Judgment

Nestadt J:

The plaintiff sues for payment of the sum of R50 250. It G alleges that in or about November 1975 it purchased from the defendant certain plant and equipment; that on 7 January 1976 it paid the defendant the purchase price thereof (being the amount sued for), but that the defendant has failed to effect delivery of the goods. Plaintiff's case is that it has, by reason of the defendant's failure to deliver and as it was entitled to do, cancelled the agreement, and that it is therefore entitled H to repayment of the purchase price. Alternatively, in the event of it being found that the plaintiff was not entitled to cancel, it claims delivery of the goods.

It is common cause that the defendant received payment from the plaintiff of the sum in question and that it has not made delivery, and indeed that it refuses to deliver. In the light of the plea and replication, the main issues that arise for determination are, firstly, whether an agreement of purchase and sale was concluded between the parties and, secondly, if not, whether the defendant is estopped from so denying.

1981 (1) SA p620

Nestadt J

Before referring to the pleadings and in order to more easily appreciate their import, it would be helpful, I think, to refer to the following by A way of background to the dispute. A company called Transterra Mining (Pty) Ltd wished to acquire certain machinery to be used in mining operations which it conducted. In about March 1975 it approached the defendant with a view to it purchasing certain of such machinery, namely a B Stella Clarification and Precipitation plant, from the defendant. The defendant carried on business in Johannesburg, inter alia, as the manufacturer of equipment used for water purification and in the clarification and precipitation of gold. Certain negotiations took place between them. The defendant was represented by a consulting engineer in its employ, a Mr Pape. This resulted in Transterra in June 1975 placing C an order with defendant for it to supply the plant in question at a price of R68 000, later reduced to R67 000. The defendant accepted such order and proceeded to design and manufacture the machine. Transterra required financial assistance to enable it to pay for it, as also for the other equipment that it needed. It therefore, in about October 1975, approached the plaintiff at its Johannesburg office. The plaintiff carries on D business as a registered savings bank. It was agreed that the plaintiff would finance the acquisition of machinery to the extent of R150 000. Included in this amount was the machine to be supplied by the defendant. The financing was to be done by the plaintiff leasing the machinery to Transterra, which would thus be enabled to pay for it over a period of E three years. On 17 November 1975 the defendant, at the request of Transterra, issued an invoice in respect of the plant ordered by Transterra. As will be seen, this invoice forms the foundation of the plaintiff's case. It is therefore of importance to set out its terms. It is addressed to Spesbona Bank Ltd (the plaintiff) "for delivery to" Transterra, whose address is stated. The body of the document reads:

"Customer's Order No. 084	Our Invoice No. 75/102
Supply, manufacture and deliver f.o.r. Johannesburg of a Stella clarification & precipitation plant, serial No. P.3088.
Price	R50 250"

The document is headed "claim No 1". The invoice was sent by the G defendant to Transterra, which in turn, so it would seem, handed it to the plaintiff. Thereafter, and on 28 November 1975, the plaintiff entered into a written agreement with Transterra, in terms whereof it leased the machinery to Transterra. In terms thereof the total rental over 36 months is R68 340,54, payable at a monthly rate of R1 898,35, commencing on 28 H November 1975. The total rental represents the sum of R50 250, being the price of the plant referred to in the invoice plus plaintiff's finance charges. By cheque dated 28 November 1975 and drawn by the plaintiff in favour of the defendant, the plaintiff on 7 January 1976 (being the date the cheque was delivered to the defendant) paid the defendant the sum of R50 250. The defendant has, however, not delivered the plant to either the plaintiff or Transterra. Its justification for not so doing is dealt with later. Transterra made some three monthly payments under the lease to the plaintiff, but thereafter has made no more. In or about July 1976 it was liquidated.

I turn to a consideration of the pleadings. A number of comparatively

1981 (1) SA p621

Nestadt J

minor amendments were granted at the commencement of the trial. In what follows I deal with the pleadings as amended. The plaintiff relies on a tacit agreement of purchase and sale having been entered into between it A and the defendant. In amplification of the allegation in the summons that the invoice "evidences the agreement of purchase and sale", the following is alleged in the further particulars to the particulars of claim: the delivery of the invoice by Transterra to the plaintiff was as agent of the defendant; the invoice constituted an offer to the plaintiff to sell it the equipment; such offer was tacitly accepted by the plaintiff on 7 B January 1976 paying the defendant the amount reflected in the invoice, namely R50 250. Plaintiff's case is that, in terms of the agreement thus entered into, delivery had to take place within a reasonable time of 17 November 1975 to Transterra; that on 30 April 1976, a reasonable time C having elapsed, the plaintiff demanded delivery and that the defendant's failure so to do entitled the plaintiff to cancel, which the summons, issued in May 1976, did.

As I have indicated, the plea admits the payment by the plaintiff, the subsequent demand for delivery, and the defendant's refusal to deliver. It also admits the issue of the invoice and its delivery to Transterra. It is, however, denied that any agreement was entered into with the plaintiff. In particular it is...