The respondent issued summons out of the High Court seeking an order for the release of its plastic bags which were being retained by the appellant, payment of the sum of US$157,350=05 representing the business it lost as a result of such retention, and costs of suit on the scale of legal practitioner and client.
The respondent also sought payment of interest from the date of issue of summons to the date of payment in full.
After hearing evidence and submissions from the parties, the court a quo ordered the appellant to pay the sum of $157,350=05 to the respondent being damages for loss of business, interest on that sum at the prescribed rate, and costs of suit on the ordinary scale.
The present appeal is against that order.
FACTUAL BACKGROUND
The appellant is a company registered in accordance with the laws of Zimbabwe and carries on business from premises in Avondale, Harare. It is an agent of the Mediterranean Shipping Company (“Mediterranean Shipping”) a company that operates worldwide with its core business being the carriage of containers.
As agent, appellant's responsibility is to fulfil the obligations of Mediterranean Shipping by facilitating delivery of containerised cargo to the clients of Mediterranean Shipping in Zimbabwe.
In this particular instance, at the behest of Mediterranean Shipping, the appellant supervised the movement, by road, of the plastic bags, which were in a container, from the Port of Beira to Mutare Dry Port.
In Mutare, the appellant instructed the employees of the Port not to release the goods until certain monies were paid by the respondent.
It is common cause, that, initially, the appellant refused to release the container until a sum of money owed by the wife of one of the directors of the respondent had been paid. Upon realizing that the debt had nothing to do with the respondent, the appellant then demanded payment of the sum of $80=50 in respect of handling charges.
The respondent, believing the bags had been unlawfully retained by the appellant, instituted proceedings in October 2012 for the release of the bags, damages for loss of business, and interest thereon at the prescribed rate.
The sum of $80=50 was only paid in August 2013 after which the plastic bags were then retrieved.
PROCEEDINGS A QUO
In its declaration, the respondent alleged that it had imported a container of plastic bags from Hong Kong and that it had engaged the appellant as its agent to facilitate the importation and clearing of the goods with the Zimbabwe Revenue Authority(“ZIMRA”).
It alleged, that, notwithstanding the fact that it had paid the import duty and the appellant's clearing fees, the appellant had refused to release the container on the basis that it was owed money from a previous transaction by the wife of one of the respondent's directors.
It alleged, that, consequent upon the refusal by the appellant to release the container, a client who had placed an order with it for plastic bags had cancelled the order as a result of which the respondent had suffered damages in the amount claimed.
In its plea, the appellant, as defendant, denied that it had entered into a contract of agency with the respondent.
It alleged, that, it had been contracted by the shipper (a term used in the freight business to denote the person who prepares the necessary documentation for the carriage of goods), Hong Kong Richer Int'l Group Limited (”Richer International”) to transport the cartons of plastic bags cif Mutare. It alleged, that, it duly discharged its obligations to deliver the container to Mutare Dry Port after which the respondent became liable to pay its administration fee relating to the Bill of Lading and the container in the sum of $80=50.
The appellant accepted that it refused to release the container before payment of the administration fee in the sum of $80=50 had been made.
At a pre-trial conference before a judge in chambers, the parties agreed the issues to be determined at the trial.
The issues included, inter alia, whether a contract existed between the parties, and, if so, the terms thereof. Further, whether the appellant was entitled to refuse to release the container until payment of the handling fee of $80=50 had been made, and, if not, whether the respondent had suffered damages in the amount claimed in the summons.
During viva voce evidence, the respondent, represented by its managing director, Albert Kuwaza, stated as follows:
His company ordered the plastic bags from China, and, through the supplier, engaged the appellant at its offices in China to transport the merchandise from China to Mutare, Zimbabwe. Once the goods were in Mutare, the appellant then demanded payment of the sum of $1,750 which it alleged was owed by a Mrs Kuwaza, wife of one of the respondent's directors, in respect of a previous transaction.
The issue of the handling fee of $80=50 was raised by the appellant for the first time in October 2012, way after a client who had placed an order for the bags had cancelled the purchase.
Under cross-examination, he conceded, that, in fact, the company with which he contracted in China was Hong Kong Richer Int'l Group Limited (Richer International) and that Richer International, in turn, contracted with Mediterranean Shipping to transport the goods to Mutare. He further conceded, that, the clearing fees were paid directly to Green Motor Services, the company that was operating Mutare Dry Port and not to the appellant. He told the court, further, that, as far as he was concerned, the appellant, Mediterranean Shipping, and Green Motor Services were part of the same company.
Following the dismissal of an application for absolution at the close of the plaintiff's case, the appellant's managing director, Dr Giorgio Spambinato, gave evidence before the court a quo. His evidence was as follows:
The appellant, which operates from offices situate at 27 Natal Road, Belgravia, Harare is an agent of Mediterranean Shipping. It has no offices outside Zimbabwe. The appellant's role was to assist Mediterranean Shipping to execute its contractual obligation of moving cargo into and out of Zimbabwe. In this case, the appellant only supervised the movement, by road, of the container from the Port of Beira to Mutare. It was not involved in the clearance of the goods with the Zimbabwe Revenue Authority (ZIMRA).
He confirmed that, initially, the appellant had insisted on payment of the sum of $1,750 owed by a Mrs Kuwaza in respect of a previous transaction, but, on realizing the error, had personally instructed that the container be released on payment of the sum of $80=50.
That sum represented the handling fee for facilitating the necessary documentation and supervising the speedy execution of delivery by sub-contractors and service providers.
He explained, that, in Zimbabwe, it is customary for the agent handling the cargo on behalf of Mediterranean Shipping to recover the costs directly from the recipients of the cargo. In other countries, the handling fee is paid by Mediterranean Shipping.
Whatever role the appellant played in this case was in fulfilment of its agency agreement with Mediterranean Shipping.
In its closing address a quo, the respondent submitted, that, the question whether there was a contract was “of no real consequence” and that “there needn't have been a contract between them because the scenario can be resolved by the principles of depositum…,.” Further, that, as depositary, the appellant had an obligation to return the goods to the respondent upon demand.
The respondent further submitted, that, it was clear from the summons and declaration that the claim “was vindicatory in nature, not contractual.”
Accordingly, the respondent prayed for its claim for damages and interest thereon to be granted on the basis of depositum.
In its address a quo, the appellant submitted, that, on the evidence led before the court, no contract had been proven. The person with whom the respondent had communicated in China was not the appellant but an employee of Mediterranean Shipping. More critically, the terms of the alleged contract between the respondent and the appellant had not been established. Moreover, at no stage had the respondent deposited the goods with the appellant.
In its judgment, the court a quo found, that, Mr Kuwaza, the managing director of the respondent had been unclear as to the nature of the relationship between the appellant, Mediterranean Shipping, Hong Kong Richer Int'l Group Limited (Richer International) and the respondent.
The court remarked as follows at page 10 of its judgment:
“What is apparent from Mr Kuwaza's evidence is that he did not produce any documents to show the existence of a contract between the plaintiff and the defendant. From the evidence that is before me, it is clear that the plaintiff entered into a shipping agreement with Mediterranean Shipping Company in Hong Kong, China in April 2012 for the shipment of its plastic container from China to Zimbabwe. That contract did not involve the defendant.”
However, at pages 10-11 of the cyclostyled judgment, the court a quo stated:
“I am of the considered view, that, the circumstances of this case show, that, there was a contract between the plaintiff and the defendant. Although the defendant said that it was acting as an agent of Mediterranean Shipping Company, its conduct towards the plaintiff shows that it also contracted with the plaintiff separately. It is not disputed that the defendant facilitated the importation of the plaintiff's cargo from the Port of Beira to Mutare.
Thereafter, it demanded payment from the plaintiff for the service that it had rendered.
The parties did not enter into this contract verbally or in writing, but, they did so by their conduct.
By demanding payment from the plaintiff for the costs it incurred in facilitating the importation of the plaintiff's cargo, the defendant created a contract between itself and the plaintiff. It made it a condition of the contract, that, if the administration fee was not paid, the plaintiff's cargo was not going to be released.
If there was no contract between the plaintiff and the defendant, the defendant should have simply demanded payment of its fees from Mediterranean Shipping Company which it alleges to be its principal.
At law, an agent's duty is to perform his mandate on behalf of his principal and he accounts to his principal. The agent's remuneration is paid by the principal and not by a third party.
I therefore take it, that, the moment an agent starts demanding payment from the third party and not from his principal, then, it means that he is no longer acting in terms of the contract between himself and his principal, but he would have created his own contract with the third party.
That contract he would have created with the third party is separate from his contract with his principal.
In casu, this is what the defendant did. It created its own contract with the plaintiff, which contract was separate from the one it had with Mediterranean Shipping Company.”
At page 12 of its judgment, the court, without commenting on the submission by the respondent, that, it now relied on a contract of depositum, concluded by stating:
“If there was no contract between the 2 companies, then, the defendant should and would have demanded its fee from Mediterranean Shipping Company which is its principal. If there was on (sic) contract, the defendant had no business demanding that money from the plaintiff. It also had no business withholding or refusing to release the plaintiff's container on the basis that the handling fee had not been paid. All the defendant's payments would have been due from Mediterranean Shipping Company. The plaintiff managed to prove that there was contract between itself and the defendant.”
Based on the above findings, the court concluded, that, the appellant had wrongfully refused to release the container and that the respondent had proved its contractual damages. It consequently made the order which is the subject of this appeal.
GROUNDS OF APPEAL
In its notice of appeal, the appellant raised five grounds. These are:
(i) The court a quo erred in finding, that, there was a contract between the appellant and the respondent when the latter was unable to identify the nature of the contract it relied upon and its terms – i.e. whether the contract was one of carriage, depositum, or agency.
(ii) The court a quo erred in finding, that, there was a contract between the appellant and the respondent despite a contrary indication in the Bill of Lading and the respondent's lack of knowledge of the terms of the contract it alleged.
(iii) The court a quo erred in placing the onus of proving the terms of the contractual relationship between the appellant and the respondent on the former, albeit obliquely.
(iv) The court a quo erred in finding that -
(1) The contract for the sale of the plastic bags between the respondent and Nedol Investments (Private) Limited was not a sham; and
(2) The loss suffered by the respondent, if any, was reasonably foreseen by the appellant at the time of the conclusion of the alleged contract, and, despite the fact that the reasonable foreseeability was not specifically pleaded and proved.
(v) The court a quo erred in finding that the respondent had mitigated its loss.
APPELLANT'S SUBMISSIONS BEFORE THIS COURT
In its submissions before this Court, the appellant has argued, that, the respondent did not sufficiently identify the nature of the contract between the parties, in particular, whether it was one of agency or depositum. The terms of the agreement, be it agency or depositum, remained unknown.
It further submitted, that, the case for the respondent was muddled and that the judgment of the court a quo was equally confusing and confused. Lastly, it submitted that whilst the facts show some relationship between the parties, the respondent had not proved the nature of the relationship that existed between them.
RESPONDENT'S SUBMISSIONS BEFORE THIS COURT
In its heads of argument, the respondent has submitted as follows:
Its declaration in the court a quo made it clear, that, what it sought was the release of its goods arising from their unlawful detention. Further, that, even if there was no contract of agency between the parties, the respondent “was not without a remedy” and that there was a tacit contract of depositum between the parties.
In paragraph 3 of its heads of argument, it has further stated:
“The respondent had contended that the claim was of a vindicatory nature and that any contract between the parties was one of depositum…,. As the appellant states, the court did not deal with these issues. It is here noted, that, by the time the matter came before the court, the goods had been released, and, if the claim had originally been vindicatory in nature, it no longer was, which was probably the reason why the court a quo allowed itself to be misled by the appellant to believe that the claim fell to be decided in contract.”…,.
At paragraph 10 of its heads of argument, the respondent has also stated:
“The absence of a contract, however, would not have left the respondent without a remedy because he would have a claim in delict for any loss incurred as a result of the unlawful possession of his property…,.”
Finally, at paragraphs 13 and 14 of its heads, the respondent has further argued:
“13. Thus, as the respondent's counsel contended at p239, the issue whether there was a contract between the parties was really of no consequence and the appeal cannot succeed on the basis that no such contract was brought into being.
The court a quo found, in effect, that, there was a tacit contract between the parties based on the fact, that, the appellant raised charges mentioned above against the respondent.”
RESPONDENT'S SHIFTING CAUSE OF ACTION
It is clear from the foregoing that the respondent, as plaintiff, changed its cause of action as the trial progressed.
In the declaration, the claim clearly arises from a contract of agency. When the respondent realised that the evidence did not establish such agency…, it then claimed, without amending its pleadings, relief on the basis of the rei vindicatio and a contract of depositum.
In its submissions before this Court, the respondent says, whatever the correct position might be on whether or not it had a contract with the appellant, it cannot be without a remedy.
The suggestion was made that it even had a claim arising out of delict.
I am inclined to agree with learned counsel for the appellant, that, the cause of action a quo was most confusing.
The cause of action based on a contract of agency was abandoned in favour of the rei vindicatio and depositum, which had not been pleaded. No evidence was led on the terms of such contract.
To add to the confusion, before this Court, the possibility of the claim arising out of delict has also been thrown in.
The manner in which the respondent handled its cause of action in the court a quo, and before this Court, is most unsatisfactory and not permissible. Implicit in the submissions by the respondent, in support of the judgment of the court a quo, is that pleadings serve no purpose.
THE IMPORTANT PURPOSE OF PLEADINGS
The manner in which the respondent has handled its case, both a quo, and in this Court, brings to the fore the question as to what the purpose of pleadings is.
In general, the purpose of pleadings is to clarify the issues between the parties that require determination by a court of law. Various decisions of the courts in this country, and elsewhere, have stressed this important principle.
In Durbach v Fairway Hotel Ltd 1949 (3) SA 1081 (SR) the court remarked:
“The whole purpose of pleadings is to bring clearly to the notice of the court, and the parties to an action, the issues upon which reliance is to be placed.”
HARWOOD BA in his text Odgers Principles of Pleading & Practice in Civil Actions in the High Court of Justice (16th edn, Stevens & Sons Ltd, London, 1957) states…,:
“The function of pleadings, then, is to ascertain with precision the matters on which the parties differ and the points on which they agree; and thus arrive at certain clear issues on which both parties desire a judicial decision.”
In Kali v Incorporated General Insurance Ltd 1976 (2) SA 179 (D)…, the court remarked:
“The purpose of pleading is to clarify the issues between the parties, and, a pleader cannot be allowed to direct the attention of the other party to one issue, and then, at the trial, attempt to canvass another.”
In Courtney–Clarke v Bassingthwaighte 1991 (1) SA 684 (Nm), the court remarked…,:
“In any case, there is no precedent or principle allowing a court to give judgment in favour of a party on a cause of action never pleaded; alternatively, there is no authority for ignoring the pleadings…, and giving judgment in favour of a plaintiff on a cause of action never pleaded. In such a case, the least a party can do, if he requires a substitution of or amendment of his cause of action, is to apply for an amendment.”
In Imprefed (Pty) Ltd v National Transport Commission 1993 (3) SA 94 (A) 108, the court cited with approval the case of Robinson v Randfontein Estates GM Co. Ltd 1925 AD 173 where…, it was stated as follows:
“The object of pleading is to define the issues; and parties will be kept strictly to their pleas where any departure would cause prejudice or would prevent full enquiry. But, within those limits, the court has a wide discretion. For pleadings are made for the court, not the court for pleadings. And, where a party has had every facility to place all the facts before the trial court and the investigation into all the circumstances has been as thorough and as patient as in this instance, there is no justification for interference by an appellate tribunal, merely because the pleading of the opponent has not been as explicit as it might have been.”
In Jowell v Bramwell-Jones 1998 (1) SA 836…, the court cited with approval the following remarks by the authors JACOB and GOLDREIN in their text Pleadings: Principles and Practice…,.:
“As the parties are adversaries, it is left to each of them to formulate his case in his own way, subject to the basic rules of pleadings….,. For the sake of certainty and finality, each party is bound by his own pleading and cannot be allowed to raise a different or fresh case without due amendment properly made.
Each party thus knows the case he has to meet and cannot be taken by surprise at the trial. The court itself is as much bound by the pleadings of the parties as they are themselves. It is not part of the duty or function of the court to enter upon any enquiry into the case before it other than to adjudicate upon the specific matters in dispute which the parties themselves have raised by their pleadings.
Indeed, the court would be acting contrary to its own character and nature if it were to pronounce upon any claim or defence not made by the parties. To do so would be to enter the realm of speculation….,.
Moreover, in such event, the parties themselves, or, at any rate, one of them, might well feel aggrieved; for a decision given on a claim or defence not made, or raised by or against a party, is equivalent to not hearing him at all and may thus be a denial of justice.
The court does not provide its own terms of reference or conduct its own inquiry into the merits of the case, but, accepts and acts upon the terms of reference which the parties have chosen and specified in their pleadings. In the adversary system of litigation, therefore, it is the parties themselves who set the agenda for the trial by their pleadings and neither party can complain if the agenda is strictly adhered to.”…,.
The authors, CILLIERS AC, LOOTS C and NEL HC in their text, Herbstein and Van Winsen, The Civil Practice of the High Courts of South Africa (5th edn, Juta and Co. Ltd, Cape Town 2009) quote the following passage from Halsbury's Laws of England, 4th edn (Reissue), Vol 36 para 1 in which the function of pleadings is said to be:
“…, to give a fair notice of the case which has to be met, and to define the issues on which the court will have to adjudicate in order to determine the matters in dispute between the parties. It follows, that, the pleadings enable the parties to decide, in advance of the trial, what evidence will be needed. From the pleadings, the appropriate method of trial can be determined. They also form a record which will be available if issues are sought to be litigated again. The matters in issue are determined by the state of pleadings at the close, if they are not subsequently amended.” (at page 558)
In Farrell v Secretary of State for Defence (1980) 1 All ER 166…, Lord Edmund-Davies stated as follows:
“It has become fashionable these days to attach decreasing importance to pleadings, and, it is beyond doubt that there have been times when an insistence on complete compliance with their technicalities put justice at risk, and, indeed, may, on occasion, have led to its being defeated.
But, pleadings continue to play an essential part in civil actions, and, although there has been…, a wide power to permit amendments, circumstances may arise when the grant of permission would work injustice or, at least, necessitate an adjournment which may prove particularly unfortunate in trial with a jury. To shrug off criticism as 'a mere pleading point' is therefore bad law and bad practice. For the primary purpose of pleadings remains, and it can still prove of vital importance. That purpose is to define the issues and thereby to inform the parties, in advance, of the case they have to meet and so enable them to take steps to deal with it.”
In a paper: A Judge's View Point, the Role of Pleadings presented by Justices Rares of the Federal Court of Australia and Richard White of the Supreme Court of New South Wales, at a judge's symposium, the learned judges remarked:
“Precise formulation of the applicant's rights in the initiating document is of central importance. This is because the pleading is the source from which many other consequences flow in the life of the litigation, from filing at first instance through to final resolution in the High Court. The pleading will be used as the reference point for the seeking of particulars, the administering of interrogatories (which is virtually extinct), the obtaining of an order for discovery if the court is satisfied this is required, the issue of subpoenas, the calling of evidence, the relevance and admissibility of evidence, the closing arguments, the reasons for judgments, and the availability of arguments on appeal.
At all of these points, the following questions arise: “Was this issue pleaded?” and “How was this issue pleaded?”
The question is not the loose one, whether the argument could possibly be raised on the evidence at the conclusion of a hearing, but, whether the issue has been pleaded….,.”
I associate myself entirely with the above remarks made by eminent jurists both in this jurisdiction and internationally.
The position is therefore settled, that, pleadings serve the important purpose of clarifying or isolating the triable issues that separate the two litigants. It is on those issues that a defendant prepares for trial and that a court is called upon to make a determination.
Therefore, a party who pays little regard to its pleadings may well find itself in the difficult position of not being able to prove its stated cause of action against an opponent....,.
Earlier in this judgment, I cited several decided cases in support of the proposition that pleadings serve the important purpose of identifying the issues that require determination by a court, and also enabling a defendant to know the case he has to meet before the court.
To this principle, however, there is a qualification.
In a limited sense, a court can adjudicate on issues not raised on the pleadings even when no amendment has been applied for.
In Collen v Rietfontein Engineering Works 1948 (1) SA 413 (A) 433, CENTLIVRES JA, referring to an issue not raised on the pleadings, but fully canvassed at the trial, said:
“This court, therefore, has before it all the materials on which it is able to form an opinion, and this being the position, it would be idle for it not to determine the real issue which emerged during the course of the trial.”
Further, in Middleton v Carr 1949 (2) SA 374 (A)…, SCHREINER JA, in similar vein, stated:
“Where there has been full investigations of a matter, that is, where there is no reasonable ground for thinking that further examination of the facts might lead to a different conclusion, the court is entitled to, and generally should, treat the issue as if it had been expressly and timeously raised.”
In Sager's Motors (Pvt) Ltd v Patel 1968 (2) RLR 267 (A), LEWIS AJA accepted that the above remarks correctly reflected the position in this country. At page 274A–B he stated:
“The ratio decidendi of the cases…, referred to above is that where there has been a full and thorough investigation into all the circumstances of the case, and a party has had every facility to place all the facts before the trial court, the court will not decline to adjudicate on an issue thus fully canvassed simply because the pleadings have not explicitly covered it.”
The above remarks were cited with approval by this Court in Guardian Security Services (Pvt) Ltd v ZBC 2002 (1) ZLR (S)…,.
That a court can determine an issue that is fully canvassed, but not pleaded, is therefore now settled in this jurisdiction.
