NOT REPORTABLE

IN THE HIGH COURT OF SOUTH AFRICA

KWAZULU-NATAL DIVISION, PIETERMARITZBURG

(EXERCISING ITS ADMIRALTY JURISDICTION)

APPEAL CASE NO.: AR159/2019

GRINDROD INTERMODAL, a Division

of Grindrod (South Africa) (Pty) Limited APPELLANT

and

THE CARGO carried in containers listed

in Annexure “A” to the Summons (namely,

SCRAP METAL) RESPONDENT

_____________________________________________________________

Order _____________________________________________________________

The following order is made:

1. The appeal is upheld with costs.

2. The order of the court a quo allowing the respondent’s claims in

reconvention is set aside, and replaced with the following order:

“The first defendant’s claims in reconvention are dismissed

with costs.”

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_

J U D G M E N T ______________________________________________________________

Olsen J (Chetty J et Jikela AJ concurring)

[1] This appeal comes to us with the leave of the Supreme Court of

Appeal. It is an appeal against part of the judgment handed down by the trial

court exercising its admiralty jurisdiction in a case in which the appellant was

the plaintiff. The first defendant was the cargo carried in containers listed in a

schedule which was annexed to the original summons issued to commence

the action. (It is common cause that the owner of the cargo contained in all

but three of those containers was a company known as Arctocel (Proprietary)

Limited.) There were two further defendants originally cited but the claims

against them were not pursued and they do not feature in these appeal

proceedings. For the sake of convenience, I will refer to the appellant as

‘Grindrod’ and the respondent as ‘Arctocel’.

[2] Grindrod operates a container depot where shipping containers are

stored near to the port of Durban. Arctocel conducts business as a scrap

metal exporter. It buys up scrap metal and exports it, mainly through the port

of Durban, and principally to India.

[3] Scrap metal bought by Arctocel is loaded into containers by the

supplier of the scrap. Arctocel hires the containers, principally but not

exclusively from a company known as Mediterranean Shipping Company

(“MSC”). Arctocel engages the services of transport operators to carry the

containers directly to the port where it is supposed to be deposited or stacked

prior to loading onto the vessel engaged to ship the containers to the export

destination. The transport operator which features most prominently in this

case is a company known as Darreb Logistics & Distribution Solutions (Pty)

Limited (“Darreb”). (Other transporters were involved, but for the purposes of

this case it is convenient, and not prejudicial to either party, simply to regard

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the relevant transport operator as Darreb.) For reasons which were not

disclosed in the evidence placed before the trial court, a number of containers

which Darreb was supposed to deliver to the port at Durban were in fact

delivered by it to Grindrod’s depot where they were held in terms of storage

contracts. It is that conduct on the part of Darreb which gave rise to the

disputes between Grindrod and Arctocel which the trial court was asked to

resolve.

[4] As plaintiff Grindrod sued for storage charges of a little over R1 million.

That claim was premised principally upon the proposition that Darreb acted as

agent of the owner of the cargo in concluding contracts of storage with

Grindrod. The claim was dismissed by the trial court and that decision is not

subject to appeal.

[5] The appeal concerns counterclaims made by Arctocel against

Grindrod. There were two. The first was for payment of some R1.9 million

said to be the value of the cargo contained in one of the containers allegedly

deposited with Grindrod which, Arctocel claimed, Grindrod had lost. That

container bore number “MEDU 3033700”. (For the sake of convenience it will

be referred to as “Medu 303”). The second counterclaim was for some

US$168 000 being a demurrage claim alleged to have been made by MSC

against Arctocel which Arctocel was bound to meet only because, it claimed,

Grindrod withheld possession of the containers containing Arctocel’s cargo

from MSC. These two counterclaims were upheld by the trial court and they

are the subjects of this appeal. (The evidence tendered on behalf of Arctocel

was that the claim for demurrage made by MSC was eventually settled at

R1.5 million and judgment was granted in that sum.)

[6] This appeal is principally one on fact. This court must be guided by the

principles set out succinctly in the judgment of Davis AJ in R v Dhlumayo and

Another 1948 (2) SA 677 (A) at 705 – 706. In relation especially to the

alleged loss of Medu 303 there are conflicts of fact which are incapable of

being resolved upon the footing that one or the other of the versions is the

product of mistake.

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[7] The issues which arise in connection with the two claims are different.

The claims must be dealt with separately. However, a resolution of the

credibility issues which arose at trial is an exercise bound up with a

consideration of probabilities, and the reliability of the evidence on one of the

claims may affect the assessment of evidence tendered on the other.

THE FACTS AND DISPUTES RELATING TO MEDU 303

[8] A Mr Jhunjhunwala was the only witness called to give evidence on

behalf of Arctocel. He is a citizen of India and at the time was employed as

the Managing Director of Arctocel. Grindrod’s witnesses gave evidence first,

Grindrod being the plaintiff in the main claim. In the result the evidence led on

behalf of the party bearing the onus of proof in the counterclaims followed the

defence case on the counterclaims.

[9] In his evidence in chief Mr Jhunjhunwala gave an overview of the mode

of business followed by Arctocel. Most of the scrap metal bought by the

company was sourced in Johannesburg where Arctocel dealt with some 70 or

80 different scrap metal dealers. Transport operators would deposit a

container at the premises of the scrap metal supplier which would load the

container with scrap metal of whatever type, which had already been presold

by Arctocel to its export customers. Once loaded the container was to be

transported to the port where it was supposed to be stacked. Arctocel

arranged the carriage and directed the transport operator as to where the

containers were to be stacked.

[10] It is Arctocel’s case that on or about 13 August 2012, and in terms of a

contract concluded between Arctocel and Able Wise Trading 47 (Pty) Limited

(“Able Wise”) the latter sold to Arctocel some 27,98 tons of metal described as

“gun metal solids” and loaded it into Medu 303. This happened in

Johannesburg. Gun metal solids are a particularly expensive and valuable

cargo. The price for this container load, according to Arctocel, was R1 913

832. A container load of ordinary scrap metal would only be worth some R70

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000 to R80 000. The pleadings concerning the loading of this container and

concerning its content are not models of clarity. In the counterclaim Arctocel

pleaded that Medu 303 was not returned by Grindrod to Arctocel, and

asserted that the value of the missing cargo contained in Medu 303 was the

amount stated immediately above. It referred in that regard to an invoice from

Able Wise. The allegations in that particular paragraph were denied. Having

regard to the way the trial was conducted, and to the arguments which have

been raised before us, the only logical reading of the pleadings reveals that

Arctocel was obliged to prove

(a) that the container was loaded with the gun metal solids referred to in

the invoice annexed to the counterclaim; and

(b) that the value of that cargo was the amount mentioned above.

We were advised from the Bar that although it does not appear from the

record, at the close of the trial Grindrod conceded that if it was found that the

container was indeed loaded with the stated tonnage of gun metal solids,

then that cargo would have had the value attributed to it by Arctocel.

[11] According to Mr Jhunjhunwala, in the latter part of 2012 there was a

transport strike of some kind which disrupted goods transport between

Johannesburg and Durban. As I understand the record of the evidence,

which is far from clear and logical in this regard, this was tendered as an

explanation for a state of confusion which arose in the offices of Arctocel over

the fact that a number of its containers which left Johannesburg did not get to

the stacks at the Durban Harbour. According to Mr Jhunjhunwala this

problem was only addressed, certainly in any meaningful way, in December.

It is common cause that on or about 28 or 29 December 2012 a

representative of Arctocel (not Mr Jhunjhunwala) telephoned Mr Burton

Naidoo (who was in charge of Grindrod’s terminal in Durban which features

in this case) to find out if any of Arctocel’s cargo was at that facility. The

enquiry was as to whether there were containers deposited there by Darreb.

Mr Naidoo had no knowledge at all of Arctocel and informed the caller that he

should contact Darreb.

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[12] According to Mr Jhunjhunwala on or about 8 January 2013 he

telephoned Mr Naidoo telling him that Arctocel owned the cargo in whichever

containers Darreb had deposited at Grindrod. Mr Naidoo’s response was

that a large amount was owing to Grindrod in respect of the storage of

whatever containers and cargo were on the premises. On or about 10

January 2013 Arctocel sent a list of containers to Grindrod (Mr Naidoo) but

for some reason that list is not available. On 28 January 2013 MSC sent a

list of 73 of its containers claiming delivery of them from Grindrod in order to

avoid vindicatory proceedings. Medu 303 was on that list.

[13] A number of lists of containers featured in the account of events. All

of them emanated either from Arctocel or MSC or from both those entities

acting in concert. The question as to why these lists were different was not

really explored, presumably because it was not regarded as material to the

issue as to what happened to Medu 303.

[14] According to Mr Jhunjhunwala on 28 January 2013, and in the

company of a Mr Todhi who was an employee of Arctocel, Mr Jhunjhunwala

went to Grindrod’s facility armed with a list of 103 containers. It is apparent

that this list was the product of some consultation between Mr Jhunjhunwala

and MSC. The purpose was to establish whether the listed containers were

stored at Grindrod’s facility. According to Mr Jhunjhunwala he and Mr Todhi

parked outside Grindrod’s premises and walked through the gate into the

premises unchallenged by any security guards. They went to a building

called the tracking office in which two people were on duty. The evidence led

on behalf of Grindrod establishes that it is the duty of those in the tracking

office to make the requisite entries in Grindrod’s computerised tracking

system when containers enter and leave the premises. It is possible, using

the computer in the tracking office, to access the computer database which

stores the information concerning the entry and departure of containers into

and from the facility. According to Mr Jhunjhunwala he requested the

employees in the tracking office to use that computer to determine whether

there was a record of each of the 103 containers on the list. According to

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him Grindrod’s employees had no difficulty in agreeing to do so and the data

base was examined as Mr Jhunjhunwala and Mr Todhi read out the numbers

of the containers one by one. The employees told Mr Jhunjhunwala and Mr

Todhi whether they had any record of the container at all, and if so whether it

was in the depot or had already left the depot. (It was Mr Jhunjhunwala’s

evidence that he and Mr Todhi stood behind the person operating the

computer, from where they could see the screen.) According to Mr

Jhunjhunwala this exercise revealed that 72 of the containers on his list were

still in the Grindrod facility. Amongst them was Medu 303.

[15] Grindrod called their two employees who were on duty on the day, and

who would have dealt with this enquiry from Mr Jhunjhunwala. They were

Messrs Kissoon and Munsamy. Their evidence was to the effect that it would

not have been their job to attend to any query like that; their job is to track

vehicles and containers actually entering and leaving the facility; they were

not ever asked to check and trace 103 containers, and did not do so. If Mr

Jhunjhunwala and Mr Todhi had arrived with the request that they should do

so they would have been directed to the administrative office where such

queries are handled. According to Messrs Kissoon and Munsamy they would

not have had the time to undertake an exercise like that. A clerk deals with

approximately 100 container movements a day. Mr Kissoon confirmed that

they were aware (presumably around that time) that Darrreb’s account had

not been paid and that those containers would not be permitted to leave the

facility, which suggests that he and Mr Munsamy would not have forgotten a

request to research the whereabouts of 103 containers falling into that

category.

[16] According to Mr Jhunjhunwala after the 103 containers on the list had

been checked on the database he requested the tracking clerks to assist him

to physically examine the containers. They said they did not have time to do

so, but that he and Mr Todhi could go into the yard and check a few. (That

was not put to Messrs. Kissoon and Munsamy in cross examination. It was

put to them that one of them had gone into the yard to assist with the

physical verification, which they denied.) According to Mr Jhunjhunwala his

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intention was to check high value containers, but he did not want to disclose

that to Grindrod employees. In short, one of the containers he found and

identified was Medu 303.

[17] It is the case for Grindrod that Medu 303 had never entered the

Grindrod facility. It never featured on the computerised system. There is

simply no record of it, and there never was a record of it.

[18] Another list of containers emerged. There were 86 containers on it.

[19] According to Mr Naidoo he had referred the matter of Darreb’s account

and the demand for MSC’s containers to head office. Grindrod consulted its

attorneys who gave advice that the cargo lodged in the containers should be

arrested and action commenced in rem for Grindrod’s claim. The warrant of

arrest was issued on 1 February 2013. What was to be arrested was the

cargo “comprising of scrap metal contained in the containers listed in

Annexure A”. Annexure “A” was the list of some 86 containers including

Medu 303. The warrant authorised the sheriff “to arrest and keep under

arrest the property named herein”. The sheriff was required to serve the

warrant and return the original to the registrar with the sheriff’s return of

service. Mr Naidoo did not personally deal with the attorney conducting the

litigation. His evidence was to the effect that the list sent to head office, and

used by the attorneys in applying for the warrant and issuing summons, had

not at the time been checked against Grindrod’s computerised tracking

system. It is clear on the evidence that if, as contended by Grindrod, Medu

303 had not ever been on its premises, and did not feature in its tracking

system, Grinrod’s left hand did not know what its right was doing. This

reflects a breakdown in communication between the facility presided over by

Mr Naidoo and head office. Whether that was through negligence or

otherwise is not a question that requires an answer in this case.

[20] The sheriff worked at Grindrod’s premises over three days. His

purpose was to attach the cargo by affixing the warrant of arrest to each of

the affected containers. Thirty nine containers were found on 1 February

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2013, 37 on 4 February 2013 and the remainder, save for Medu 303, on 5

February 2013. The return of service for 5 February 2013 records the

following.

‘The balance of the containers were located with the exception of container Medu

3033700 which Mr Naidoo has no trace of.’

[21] It is common cause on the pleadings that the parties then concluded an

agreement in terms of which the arrested cargo was to be released against

the provision of a bank guarantee in a format stipulated by Grindrod’s

attorneys. The guarantee was provided but Medu 303 was not released

because, according to Grindrod, it did not have it in the first place. The

release warrant was expressed in the same terms as the warrant of arrest. It

related to the cargo lodged in the containers listed in the same Annexure “A”.

[22] Both at trial and before us Grindrod’s concession was that if the court

found that it did in fact have Medu 303 on its premises, then it would be liable

to compensate Arctocel for whatever was proved to be the cargo contained in

Medu 303. Arctocel’s argument was that upon a proper construction of the

agreement for the release of containers against the provision of the

guarantee, even if it was correct that Grindrod never had Medu 303 in its

facility, it was nevertheless obliged to deliver it up to Arctocel, and to pay

compensation if it failed to do so. That issue turns on a proper construction

of the agreement, and possibly also on Grindrod’s plea of rectification.

THE FACTS AND DISPUTES RELATING TO THE CLAIM FOR

DEMURRAGE

[23] Arctocel pleaded that on 9th January 2013, Mr Jhunjhunwala

telephoned Mr Naidoo to tell him that 84 containers held by Grindrod

belonged to MSC, that Arctocel had a contract of lease with MSC in respect

of those containers and was liable to pay demurrage because of their

continued detention, and that both MSC and Arctocel required the immediate

release of the containers. In its plea, Grindrod admitted the call and having

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received information, but did not admit that the information conveyed was

true and correct.

[24] Arctocel pleaded that Grindrod owed it a legal duty arising at common

law, and confirmed by s 5(4) of the Admiralty Jurisdiction Regulation Act,

1983, to make reasonable enquiries to establish the truth of the information

conveyed during the call, and to refrain from continuing to store the

containers (and to refrain from arresting them), something which had to be

done within one day. Those allegations were denied by Grindrod. Arctocel

went on to plead that instead of releasing the containers, Grindrod arrested

them, and only subsequently released them on or about 7 February 2013

against provision of security.

[25] The allegations thus far mentioned under the present heading are

confusingly at odds with certain facts, which were either common cause at

the trial or not capable of being seriously disputed. The first and most

obvious error in the pleading lies in the fact that the containers were never

arrested. The cargo contained in each container was arrested. The second

contradiction with the facts is that it is abundantly clear that Arctocel’s

demands for delivery of the containers were in fact demands for delivery of

the containers and the cargo they contained. It is clear from the evidence that

MSC and Arctocel were working together. The conclusion is irresistible that

such demands as MSC made for the return of their containers were intended

also to apply pressure for the release of the cargo as well. The distinction

between the cargo and the containers was readily apparent to Grindrod’s

attorneys, who informed Arctocel on 1 February 2013 (the day the arrest

warrant was issued), that the containers would be unpacked and made

available for collection by the owners of them. That offer was declined by

Arctocel which undertook instead to provide security so that the cargo could

be released in the containers in which it was lodged.

[26] Arctocel’s pleadings on the demurrage claim are to the effect that

Grindrod could have established MSC’s ownership of the containers within a

day of the telephone call of 9 January 2013, and that Grinrod ought

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accordingly to have surrendered the containers on 10 January. Having failed

to do so Grinrod was liable to compensate Arctocel for demurrage charges it

incurred from 10 January 2013 to 8 February 2013. It is pleaded that

Grindrod wilfully or negligently breached a legal duty to make enquiries,

which would have involved the simple expedient of telephoning a responsible

person at MSC in order to establish ownership of the containers in question;

or otherwise by failing to take “reasonable and necessary actions timeously

to confirm that there was no reasonable and probable cause to continue to

detain and/or arrest the said containers.” All of those allegations were denied

by Grindrod. However, the evidence does not reveal that Grindrod was at the

time concerned at all that the containers were owned by MSC or by some

other party. That was not the issue. As to the remaining denials, they left

Arctocel having to prove inter alia that as a matter of fact, MSC raised the

demurrage claim of $ 2030 for each container in respect of 29 days’

detention from 10 January 2013 to 8 February 2013; and that the claim for

demurrage was actually paid.

THE JUDGMENT OF THE COURT A QUO

[27] The findings of the learned judge in the court a quo on the issues

arising out of the counterclaims are implicit in the orders which were made. In

so far as the alleged loss of Medu 303 is concerned, the learned judge found

it proved that Medu 303 was in the possession of Grindrod, but also held that

even if it was not, the contract concluded between the parties when it was

agreed that monetary security would substitute for the detention of the cargo

obliged Grindrod to return Medu 303 even if it never had been in Grindrod’s

possession. Without going into the evidence available as to the content of

Medu 303, the learned judge accepted that it contained the expensive cargo

claimed by Arctocel to have being lost.

[28] In my view a fair reading of the judgment reveals that the findings with

regard to Medu 303 were based upon the proposition that Mr Jhunjhunwala

was a credible witness whose evidence had to be accepted. This credibility

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finding was not accompanied or informed by an assessment of the

probabilities. For instance, when assessing the evidence of Mr Jhunjhunwala

that he had gone to Grindrod’s premises and got the tracking clerks to search

through the computerised system for 103 containers (including Medu 303),

the learned judge failed properly to consider the evidence of the tracking

clerks and the probabilities concerning Grindrod’s claim that Medu 303 never

ever featured on Grindrod’s computerised tracking system and records.

[29] No authority is required for the proposition that civil cases are decided

on the probabilities. The correct approach when there are conflicting versions

in a civil dispute was set out as follows in National Employers’ General

Insurance vs Jagers 1984 (4) SA 437 (E) at 440 D-G.

‘In a civil case the onus is obviously not as heavy as it is in a criminal case,

but nevertheless where the onus rests on the plaintiff as in the present case,

and where there are two mutually destructive stories, he can only succeed if

he satisfies the court on a preponderance of probabilities that his version is

true and accurate and therefore acceptable, and that the other version

advanced by the defendant is therefore false or mistaken and falls to be

rejected. In deciding whether that evidence is true or not, the court will weigh

up and test the plaintiff’s allegations against the general probabilities. The

estimate of the credibility of a witness will therefore be inextricably bound up

with a consideration of the probabilities of the case and, if the balance of

probabilities favours the plaintiff, then the court will accept his version as

being probably true. If, however, the probabilities are evenly balanced in the

sense that they do not favour the plaintiff’s case any more than they do the

defendant’s, the plaintiff can only succeed if the court nevertheless believes

him and is satisfied that his evidence is true and that the defendant’s version

is false’.

At page 440 I, the learned judge added the following:

‘It does not seem to me to be desirable for a court first to consider the

question of the credibility of the witnesses as the trial judge did in the present

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case, and then, having concluded that enquiry, to consider the probabilities of

the case, as though the two aspects constitute separate fields of enquiry.’

[30] I am satisfied that on a fair reading of the judgment, the learned judge a

quo found Mr Jhunjhunwala’s evidence to be credible, and therefore decisive

of the case, without taking the measure of it in conjunction with an

assessment of the probabilities. In addition, she made only a cursory

examination of the qualities and implications of the evidence tendered by

Grindrod, especially in connection with the crucial issue as to whether Medu

303 was ever on Grindrod’s premises.

[31] I am also of the view that the learned judge a quo misdirected herself

by giving insufficient attention to the question of the sufficiency of the

evidence provided by Arctocel. Concerning the quality of the evidence

required to discharge an onus, the observations of De Villiers JP in Union

Market Agency Ltd vs Glick and Co. 1927 OPD 285 at 288 are of some

importance in the resolution of the disputed facts placed before the court a

quo.

‘I have on a previous occasion made a remark to the effect that, when once it

is established that the onus lies upon a given party, that onus cannot be

discharged by any sort of evidence, but only by a certain ‘quantum’, i.e, by

evidence which, having regard to the circumstances of a particular case, is

sufficiently substantial, detailed, reliable and satisfactory.’

(See also Sigournay vs Gillbanks 1960 (2) SA 552 (A) at 558H.)

An assessment of all the evidence is required in order to reach a conclusion

as to whether the requisite quantum of proof is present. When there is a gap

or shortfall in the evidence, the insufficiency may have a bearing on the

assessment of probabilities. In the present matter there are obvious gaps in

the evidence tendered by Arctocel. The issue as to the implications of these

was not brought to account and considered in the judgment of the court a quo.

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[32] For these reasons, and for others still to be considered, this court must

reconsider the factual findings made by the trial court and reach a conclusion

on the record as to whether the onus on Arctocel was discharged.

THE CLAIM FOR MEDU 303

[33] An account of the role of Medu 303 in this case must start at the

premises of Able Wise. According to Mr Jhunjhunwala, Medu 303 was to be

loaded by Able Wise with a cargo of ordinary scrap metal and an invoice for

that ordinary scrap was issued and presumably delivered by Able Wise to

Arctocel. It was realised, before Medu 303 was loaded, that it should be used

for the far more expensive cargo of gun metal solids. The amount of the first

invoice for ordinary scrap would accordingly have been credited to Arctocel’s

account and replaced with a debit of some R1,9 million for the gun metal

solids loaded into Medu 303.

[34] Mr Jhunjhunwala has no personal knowledge of the alleged fact that

Medu 303 was loaded with gun metal solids. According to his evidence

Arctocel itself (presumably through an employee or other assessor) checks

the cargo at the point of loading in order to verify that what is put in the

container meets the requirements of the contract between Arctocel and its

supplier, in this case Able Wise. One would think that there were therefore two

sources of direct evidence which could have been led to prove that Medu 303

was loaded with cargo worth some R1,9 million as opposed to cargo worth

about R70 000, which was the charge on the first invoice. No such evidence

was called from Able Wise or the person who verified the cargo. Neither was

any explanation tendered for its absence. Arctocel’s counterclaim for the

alleged lost cargo in Medu 303 is pleaded in a way which called for the invoice

in respect of that cargo to be annexed to the pleading. The counterclaim was

delivered in February 2014. The loading of Medu 303 is alleged to have taken

place at the premises of Able Wise in August 2012. The invoice originally

supplied with the counterclaim was dated 13 August 2013. That invoice was

later substituted as an annexure by yet a third invoice relating to Medu 303,

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now dated 13 August 2012. When asked to explain this, Mr Jhunjhunwala

said the following:

‘The reason with that was because we showed the seller that you have

supplied us with the material or this container on 13 August. Our inspectors

have inspected it and then you have given us a previous invoice of steel

which we then changed, so the date should be 2012. They then read their

records and then confirmed to us that it was the formatting due to which there

was a confusion and they had now corrected that to say 2012 instead of

2013.’

No one from Able Wise was called to give the direct evidence required to

confirm this hearsay tendered by Mr Jhunjhunwala. (Perhaps such a witness

could also have dealt with the loading of the container, if Mr Jhunjhunwala’s

version is correct.) The error attributed to whoever prepared invoices for Able

Wise is strange indeed. One is accustomed, or certainly used to be

accustomed, to seeing a previous year’s date appearing on a document

prepared early in a year (in January or perhaps February). But, upon the

assumption that a computerised bookkeeping system will accept such errors

and entries, it is difficult to see why anyone drawing up an invoice in August

2012, would date it August 2013. Such an error is an improbable one and Mr

Jhunjhunwala’s hearsay explanation does not disturb the probabilities on the

issue.

[35] The two invoices for some R1,9 million referred to above were the only

documentary evidence tendered by Arctocel to support Mr Jhunjhunwala’s

oral evidence that Arctocel bought the gun metal solids from Able Wise. Mr

Jhunjhunwala’s evidence was to the effect that Arctocel made lump sum

payments to Able Wise from time to time, as it were to keep its account with

Able Wise up to date. The effect of this, he said, was that no particular

payment coincided with the precise amount allegedly paid for the gun metal

solids. When pressed as to why he had not produced a running statement of

the account, which should reflect the invoice for that cargo loaded into Medu

303 in August 2012, Mr Jhunjhunwala’s evidence was that Able Wise did not

16

send out statements of account. The business between the two companies

was only recorded on a ledger. That strikes me as a strange and improbable

way of doing business. A representative of Able Wise could presumably have

solved the problem if Mr Jhunjhunwala’s evidence was true. Atrcotel’s own

ledger could have been produced from its records to illustrate the debit

allegedly raised against it by Able Wise for the gun metal solids.

[36] In the circumstances there is no documentary evidence, when such

was called for, such as would have appeared from a statement of account or a

copy of the relevant ledger (be it Arctocel’s ledger or that of Able Wise):

(a) to establish that a credit was passed on the account of Arctocel

by Able Wise for the invoice of some R70 000 for ordinary scrap

intended to be but not loaded into Medu 303;

(b) reflecting the debit of some R1,9 million in August 2012 in

respect of gun metal solids; and

(c) showing the allocation of moneys paid by Arctocel to the debit of

R1,9 million allegedly raised for the gun metal solids.

[37] The learned judge in the court a quo classified such evidence as was

tendered by Mr Jhunjhunwala concerning the loading of Medu 303 with gun

metal solids as ‘undisputed’. She erred in that regard. The learned judge failed

to take into account that the facts that Mr Jhunjhunwala’s evidence was

hearsay, that the invoice ultimately relied upon was or might be of doubtful

origin, and that accounting records and documents reasonably to be expected

were not produced, raised the question as to whether Arctocel had tendered

evidence of the requisite quality to discharge the onus of proof on it to prove a

matter peculiarly within the knowledge of itself and its prime supplier. In my

view the evidence fell short of what was required. What is more, the failure to

present that aspect of the case properly through direct evidence supported by

obviously relevant documents lends no support to the argument that Mr

Jhunjhunwala’s evidence should be accepted as credible or reliable.

[38] I turn to the issue as to whether Medu 303 was ever on Grindrod’s

premises. It is common cause that the container featured on the list annexed

17

to the application for a warrant of arrest of cargo contained in containers, and

on the release warrant. For reasons already discussed that does not take the

enquiry very far.

[39] The evidence tendered by Arctocel is that of Mr Jhunjhunwala to the

effect that, in the company of a Mr Todhi, he visited Grindrod’s premises on

28 January, 2013, got the tracking clerks to confirm, inter alia, that Medu 303

featured on Grindrod’s database, and actually saw Medu 303 when he went

into the yard to check on some of the containers that were there. All of that is

disputed, and Mr Todhi was not called to corroborate Mr Jhunjhunwala’s

evidence. (Mr Jhunjhunwala’s evidence was that Mr Todhi was not called

because he had transferred to Indonesia).

[40] Before taking a closer look at the evidence tendered by Grindrod in

support of its contention that Medu 303 was not at any time on its premises, it

is necessary to mention some other respects in which the judge a quo

misdirected herself in considering this issue.

(a) The learned judge mischaracterised the basis upon which the

evidence of Messrs Kissoon and Munsamy fell to be considered.

Of Mr Kissoon, she said that he did not recall whether he was on

duty on 28 January 2013. In fact, Mr Naidoo’s evidence proved

that Mr Kissoon was on duty. Of Mr Munsamy, (and presumably

by implication of Mr Kissoon also) she said that he did not recall

an event where two men came to the tracking office to look up

103 containers on the computerised system. That

mischaracterises the evidence, because it is clear that both

these witnesses were denying the occurrence of an event which

they would have remembered if it had occurred.

(b) The judgment refers to an exchange between counsel for

Grindrod and Mr Munsamy where the latter was asked whether,

had he been asked to look up 103 containers, he would have

done so. The answer was in the negative. The judge took this

evidence to corroborate Mr Jhunjhunwala’s version that none of

18

the two tracking clerks on duty that day were prepared to assist

with a physical verification of the containers. But the passage of

evidence quoted has to do with looking up the containers on the

computer; not with a physical verification of the presence of

containers in the yard.

(c) The judge speculated along the lines that working on the basis

of what she described as the “reliable evidence of Mr

Jhunjhunwala”, Medu 303 could have been lost or stolen from

the Grindrod’s premises at any time between 28 January 2013

and the third day of the sheriff’s work at the premises (5

February 2013). That was not an issue before the court. It was

not pertinently raised.

[41] The judge held that Mr Jhunjhunwala’s version as to the presence of

Medu 303 was corroborated by what she called “joinder affidavits” delivered

on behalf of the second and third defendants. Those affidavits are not in the

record before us. Nevertheless, whatever they contained was not evidence

before the trial court.

[42] The judge reasoned that because Mr Naidoo never accompanied the

sheriff over the three days it took him to execute the warrant, there was no

direct evidence to contradict Mr Jhunjhunwala’s evidence that Medu 303 was

on Grindrod’s premises on 28 January 2013. This line of reasoning overlooks

the fact that the evidence tendered on behalf of Grindrod was to the effect that

if Medu 303 had ever entered or left its premises, that would have been

reflected inter alia in the computerised records; and that there was no

computerised record of the presence of Medu 303. That is direct evidence, as

is the evidence of the two tracking clerks. In addition, there is the direct

evidence of the sheriff’s return to the effect that Medu 303 was not to be found

on the first, fourth and fifth of February 2013. Section 43 (2) of the Superior

Courts Act, 2013 (like Section 36 (2) of the Supreme Court Act, 1959) is to the

effect that the return of the sheriff or deputy sheriff shall be prima facie

evidence of the matters therein stated. The return indicates that Medu 303

was not found. There was no need for the sheriff to be called unless there was

19

evidence tendered to prove that Medu 303 was on Grindrod’s premises on the

days in question.

[43] I turn to the evidence led on behalf of Grindrod on the question as to

whether Medu 303 was on its premises. Mr Naidoo was in charge of the

terminal from 2012 to 2017. He described the system which governed the

entry and exit of containers from Grindrod’s facility.

[44] When a container enters the depot, it is stopped at the security point at

the gate. There a physical check of the container is made by the security

officials. The driver of the vehicle should have a delivery note or a delivery slip

which is examined to ensure that the container has arrived at the correct

facility. The container number is checked as is the seal number on the door of

the container. These details (as well as the name of the transport company,

the registration numbers of the horse and trailer, and the driver’s name) are

written into a document known as the inward gate register by the security

guard. The driver is then directed to the tracking office which is about 20

metres away.

[45] At the tracking office, the driver presents his delivery book or delivery

note and all the relevant details of the container are entered into the

computerised system. Once that is all done, the driver is directed by a yard

clerk to the offloading area where Grindrod unloads the container and places

it in a stack.

[46] When containers are to be removed, Grindrod would normally receive

advance notice of this. The truck would arrive and the driver would present his

book or delivery note to the security guard who would write down the details in

the gate register. The driver would be directed to the tracking office where he

would present his documents which would be checked against the tracker

system. There, assuming that the driver’s request coincides with the

information on the tracker system, the driver would be given a pick-up slip to

be handed to the yard clerk so that the container to be loaded could be

identified. On the way out, the vehicle would stop at security where a security

20

guard would check the container number, verify the seal number and endorse

it on the pickup slip, and check the container over for any damage. Once that

is done, the tracking clerk re-enters the picture and captures the relevant

details on the tracker system which would generate what is called an “outward

report”. The vehicle may then leave.

[47] From Mondays to Fridays a reconciliation is done between the

information recorded by the security guards at the security gate and the

tracker system. There are sometimes errors such as the omission of a letter or

number from the container number. These are rectified. (The reconciliation for

container movements over a weekend are dealt with on the following

Monday).

[48] All the documents to which Mr Naidoo had spoken were handed in after

this portion of his evidence was done. Those documents are not in the appeal

record. Counsel for the respondent placed on record when those documents

were handed in that no admission was made with regard to them. However,

Mr Naidoo’s evidence that Grindrod has no record of Medu 303 ever entering

or being upon its premises at the facility was not contradicted upon the footing

that the records handed in show otherwise.

[49] Mr Naidoo’s evidence was that there had been no thefts of containers

or cargo from the facility in question during the period of his stay there.

[50] Mr Kissoon was also taken briefly through Mr Naidoo’s description of

the process followed when containers enter or exit the premises. He was

asked what would happen if a person arrived at the tracking office asking for a

particular container to be looked up. His answer was that nothing would be

done without first establishing the identity of the requester and the alleged

relationship between the requester and the container. A check for a single

container could then be made at the tracking office. When asked what would

happen if somebody arrived with a similar request but relating to 103

containers, he said that he would not have done it and did not do it. When

asked why he would not have done it, his answer went as follows:

21

‘Because on the tracking we are a busy, very busy depot, so on a normal day

to day basis we do live tracking, so every truck that comes in and every truck

that goes out, every driver comes straight to me and everything is done

immediately, I will not have the time to check 103 containers. It is impossible’.

[51] Mr Kissoon was asked to make what might be called a “dock

identification” of Mr Jhunjhunwala who was in court at the time, and said that

he had never seen him before. He stated that it was impossible to delete a

container record from the computerised system.

[52] Under cross-examination, Mr Kissoon said that customers do not

normally come to the tracking office. During the day they would be sent to the

administrative office where there is a controller who would assist a customer.

It is only after hours that a particular customer with a particular request would

be dealt with at the tracking office. Mr Kissoon also stated that he

remembered that the containers deposited with Grindrod by Darreb had been

placed on hold and could not be released at that time. The effect of that was

that the trackers were not supposed to liaise with anybody with regard to the

containers, but to send any such person to the administration controller. He

pointed out that any customer inside the tracking office is not permitted to see

the computer screen “for confidential reasons where there is pricing and

container numbers and so on, and so forth, that they are not allowed to see at

all’. (That contradicts Mr Jhunjhunwala’s evidence as to how precisely he and

Mr Todhi observed the process of checking 103 container numbers). Mr

Kissoon said that there is a gate which keeps any outsider in his facility “on

the other side” in relation to his work area.

[53] Mr Munsamy’s evidence in chief was to much the same effect as that of

Mr Kissoon. He did not look up a list of 103 containers and would not have

done so if he had been asked to. It would have obstructed live tracking. His

estimate (and it cannot be anything but an uninformed estimate, on his own

evidence) was that it might take just under two hours to look up 103

22

containers. He confirmed, inter alia, that there is a barrier between outsiders

and the area where the tracking clerks work.

[54] Grindrod called Mr Adam Walker, who was the national IT manager for

Grindrod in 2012/2013. At the time of the trial he had worked for Grindrod in

the IT field for in excess of 11 years. The computerised system used by

Grindrod was called “Tracker” and it was a system developed “in-house” to

manage the depot component of Grindrods business.

[55] Mr Walker’s evidence was to the effect that an access code was

necessary to get access to the tracker application itself, and another to the

server holding the database. That server resides off-premises at a facility

known as the Grindrod Data Centre. He said that no one at the depot where

Medu 303 was allegedly stored would have access to the database except

through the tracker system.

[56] Mr Walker’s evidence was that he had done what he called “due

diligence checks” and that Medu 303 does not exist in any component of the

“data layer”, nor in any out-bound report that was sent from the system (by

which, as I understand it, he meant from the data server). He searched both

the tracker application and the database itself. When asked whether it might

be possible to delete a container from the database, he stated that it was

highly unlikely because of the cross referencing amongst a number of different

tables that are linked. Nobody at the depot could have accessed the database

for the purpose of deleting any entry. Under cross-examination Mr Walker

accepted the proposition that no computerised system is perfect.

[57] I have dealt with Grindrod’s evidence on the subject of there being no

record of Medu 303 generated by the procedures followed on the arrival and

departure of containers in somewhat more detail than is customary in an

appeal judgment. I have done so to illustrate the significance of the fact that it

was not evaluated in the judgment of the court a quo. The judge made no

credibility finding with regard to Grindrod’s witnesses, save for what may be

23

regarded as implicit in her finding that there was no reason to disbelieve Mr

Jhunjhunwala.

[58] A reading of the record of the evidence of these witnesses reveals no

reason not to believe them. On the contrary, their evidence appears cogent

and honest. These were not witnesses who were immersed in the litigation

and disputes, and who had applied their minds to the nuances of the case and

the dispute over the presence or absence of Medu 303. There is nothing

improbable about their accounts of the tracking system and mode of work.

There is nothing improbable about the proposition that Medu 303 was not at

any time on the database or on Grindrod’s premises. Arctocel provided no

evidence (documentary or otherwise) of the arrival of Medu 303 at Grindrod’s

premises, although it is difficult to see what might have been produced given

the fact that Arctocel had not asked Darreb to deliver the container to

Grindrod.

[59] Grindrod’s computerised system is obviously crucial to the proper

functioning of the depot. Putting aside other motivations for Grindrod to

ensure that the system functions correctly (eg its trade reputation), Grindrod’s

profit motive must have driven the establishment and operation of the system.

The arrival of a container generates charging for the handling and storage of

the container. If it is not entered the container will escape the accounts

system. The closing date for charges in respect of a container is generated

by recording the container’s departure. There is, in effect, a double entry

record system dealing with the entry and exit of containers. These are

reconciled. A complete audit of the containers on site is done four times a

year. Whilst Mr Naidoo conceded that in that process errors, of the type

already mentioned, which had slipped through the earlier daily cross-

checking, might be discovered, he was adamant that no container had been

lost from the premises during the period of his employment there.

[60] Considering the system described by Grindrod’s witnesses, one can

see that it is not impossible that the security guards, the tracking clerks and

the yard clerks could have been simultaneously persuaded (perhaps in

24

exchange for some personal advantage) to overlook the entry, storage and

removal of a container into, on and from Grindrod’s premises. That strikes me

as improbable. Equally improbable, it strikes me, is the notion that a container

could accidently enter the premises without being entered on the system, and

then accidentally leave the premises without the fact that there was no record

of its entry being noted in the tracking office. (Mr Jhunjhunwala’s evidence

that he and Mr Todhi entered the facility on foot without confronting security

guards has no bearing on the issue as to whether the arrival or departure of a

horse and trailer loaded with one or more containers might be missed.)

Likewise, why would an employee at the Grindrod Data Centre accept an

instruction to delete the records of a container from the database, assuming

that it could have been done without Mr Walker finding out, if not earlier, then

when he searched the database for the purpose of this case?

[61] None of this was taken into account by the judge a quo when she

decided that the outcome of the case rested on her decision to accept Mr

Jhunjhunwala’s evidence. In my view, on the issue of the presence of Medu

303 on Grindrod’s premises on 28 January 2013, Mr Jhunjhunwala’s evidence

does not establish Arctocel’s case on a balance of probability. A finding that

Mr Jhunjhunwala’s evidence was insufficient because Grinrod’s evidence was

more probable (which in my view would have been the correct conclusion)

would not have required of the judge a quo to declare that he was a

“deliberate liar and perjurer”. (See Body Corporate of Dumbarton Oaks vs

Faiga 1999 (1) SA 975 (SCA) at 979.) It is difficult to resist the conclusion that

the learned judge was impressed with Mr Jhunjhunwala’s demeanour, but that

cannot be the sole determinate of the outcome of the dispute.

[62] What remains to be dealt with is the learned judge’s finding that even if

Medu 303 was not on the premises, the terms of the contract concluded when

the release warrant was issued obliged Grindrod to produce Medu 303 to

Arctocel.

25

[63] The premise of Arctocel’s claim in contract for compensation for the

loss of Medu 303, even if it was not ever in the possession of Grindrod, is

summarised in paragraph 14 of the claim in reconvention.

‘Material terms of the Safekeeping and Release Agreement, expressly,

alternatively impliedly, alternatively tacitly agreed were as follows:

(a) the plaintiff would, consequent upon its said arrest and prior to

lawful release of the said 84 containers and cargo therein,

attend to the safekeeping thereof as a contract of depositum,

alternatively as an innominate contract;

(b) the plaintiff would, upon provision of the said guarantee,

release and return all of the cargo (including the cargo

subsequently found to constitute the missing cargo) to the

defendant’.

[64] The allegations in paragraph 14 of the counterclaim were denied. In

amplification (but without limiting the denial), Grindrod contended that the

agreement obliged it to release all cargo in its possession at the time of the

provision of the guarantee. As an alternative to that, Grindrod contended that

the agreement to release 84 containers proceeded from a common mistaken

belief that Grindrod had in its possession the missing container, whereas it did

not. Consequently, Grindrod peaded, the agreement fell to be rectified to

reflect an obligation on it to release and return only the 83 containers

containing the cargo arrested. The judge a quo held that there was no

common error. As far as can be judged from the brief reason she gave for

reaching this conclusion, she erred in conflating the issue as to whether Medu

303 was in Grindrod’s possession with the issue as to the basis upon which

the contract was concluded. Grindrod’s attitude was that if it had Medu 303 in

its possession at any material time then it was obliged to compensate

Arctocel. The issue of the contract would only arise if the court found that

Grindrod did not have Medu 303 in its possession at any material time. (I use

the term “at any material time” to try and clear up some of the loose language

employed in argument and in the pleadings. Obviously, if Grindrod had Medu

303 stored at its depot a year or two before the events which gave rise to this

26

case, that would have had no bearing on the case. Equally obviously, if Medu

303 had been deposited in Grindrod’s facility by Darreb after it had picked it

up in Johannesburg, Grindrod’s concession of liability would operate whatever

the terms of the contract.)

[65] Concerning a tacit term, the judge a quo held that she could not

formulate one for no reason other than that there was no evidence that the

parties intended a term which would release Grindrod from the obligation to

release any cargo not in its possession at the time that the release was due to

take place. In my respectful view that conclusion was correct as far as it went,

because, as counsel for the respondent argued, it could not have been

intended that Grindrod could escape liability to redeliver cargo by disposing of

it (or losing it) between the time when the contract was concluded and the

time for performance of the obligation to release the cargo.

[66] However, the question remains as to whether in terms of the contract

Grindrod had a contractual obligation to release Medu 303 even if it was not in

its possession at the time for release, and had not been in its possession at

any material time. That is the footing upon which the case was conducted.

[67] The documents upon which Arctocel relied for its contractual claim

were annexed to the counterclaim. The first is a letter dated 4 February 2013

addressed by Arctocel’s attorneys to Grindrod’s attorneys. The letter recorded

that Arctocel were “the owners of the cargo in the containers arrested by your

client”. The letter went on to offer security and to ask whether Grindrod would

be willing to accept security “against which the containers and cargo will be

released from the arrest”. This letter is the foundation for what followed. Two

observations must be made about it immediately.

(a) To the extent that the letter might be interpreted to convey a

belief that the containers had been arrested, it was erroneous.

Cargo had been arrested, or was in the process of being

arrested.

27

(b) If the author of the letter had access to the schedule annexed to

the arrest warrant and to the application for the issue of an

arrest warrant, then he was presumably at that stage under the

impression that the cargo contained in Medu 303 had been or

would be arrested.

[68] The letter of 4 February proposed that monetary security should be

substituted for the security achieved by the arrests of the cargo. The amount

of the monetary security was to be determined not with respect to the value of

the cargo, but, in terms of the letter, as an amount which provided satisfactory

security for Grindrod’s claim. The inclusion or exclusion of Medu 303 was not

a factor on that score.

[69] The second letter put up is one from Grindrod’s attorneys to Arctocel’s

attorneys dated 5 February. It enclosed a draft form of wording for a bank

guarantee to be issued by a bank against which Grindrod would “consider the

release of the cargo”. In my view, reading the two letters together, there can

be no doubt that what the letter of 5 February spoke about was cargo that had

been arrested.

[70] The draft bank guarantee which accompanied the letter of 5 February

commenced by recording the fact that Grindrod had “caused the cargo carried

[in] the containers listed in annexure “A” to be arrested pursuant to its claim”.

In its second paragraph the draft bank guarantee recorded that Arctocel

disputed the claim but furnished the guarantee “to secure the release of the

cargo”. This draft guarantee was prepared by Grindrod’s attorneys. On 5

February the sheriff was still busy executing the warrant at Grindrod’s

premises. Whether for that reason or otherwise, it is clear that the attorneys

were under the impression that the cargo contained in all the containers listed

in annexure “A” had been or would be arrested. We now know that belief was

erroneous. The error in the draft guarantee arises only in the first two

paragraphs which state the circumstances giving rise to the provision of the

proposed guarantee. They are what some people call “whereas clauses”.

Despite the error, a reasonable reader could only conclude that what was

28

intended was the substitution of monetary security for what was arrested; not

for any cargo that was not arrested.

[71] The final letter relied upon by Arctocel is dated 6 February 2013. It

enclosed the original bank guarantee. A copy of that bank guarantee is also

annexed to the pleading. In material part it is to the same effect as the draft

guarantee. The second paragraph ends with the recordal that the bank

guarantee is delivered “to secure the release of the cargo”. The cargo is

defined as the cargo contained in the containers listed in annexure “A”, just as

it was in the draft guarantee. The letter of 6 February asks Grindrod’s

attorneys to “release the containers listed in annexure “A” under the aforesaid

case number”. No document emanating from Grindrod’s attorneys confirming

that that was to be done was pleaded as part of the written record of the

contract. In my view the proper construction of the writing put up by Arctocel

as the contract coincides with a common sense and business-like approach to

the problem with which the parties were confronted. Monetary security was to

substitute for cargo which had been arrested. Why would Arctocel offer to

provide security to replace the retention of cargo which had not been

arrested? Looked at otherwise, why would Arctocel stipulate for the delivery

of cargo which Grindrod had never possessed? And why would Grindrod

undertake to deliver cargo which it had never possessed? The obvious

answers to those questions coincide, in my view, with a proper understanding

of the agreement. The contract was clearly intended to operate in respect of

arrested cargo. Where the guarantee refers to that cargo in its introductory

provisions as the cargo reflected in annexure “A”, that must be read in context

to convey cargo in the containers reflected in annexure “A” which has been

arrested. Both the letter of 6 February and the bank guarantee speak of the

“release” of the containers or the cargo, as the case may be. In plain

language, Grindrod could not release what it did not have and had not

arrested

[72] I conclude that Arctocel’s claim for compensation for the loss of the

cargo allegedly contained in Medu 303 must fail.

29

THE CLAIM FOR COMPENSATION FOR DEMURRAGE

[73] It is necessary briefly to re-engage with the basis upon which the

demurrage claim was pleaded. Arctocel pleaded that Grindrod owed it a legal

duty arising at common law, and confirmed by Section 5 (4) of the Admiralty

Jurisdiction Regulation Act, 1983 to make a timeous enquiry of MSC in order

to establish whether it was true that MSC owned the containers in respect of

which the demurrage claim was ultimately made. (I will ignore the fact that as

late as 28 January 2013 MSC’s demand was for 73 containers, and not the 83

in respect of which demurrage is claimed. The record reveals no solution to

that conundrum, but it is not relevant in the view I take of the matter.) I have

already drawn attention to the fact that on the evidence before the court

MSC’s ownership of the containers was never an issue. The issue was the

cargo contained in the containers. Furthermore, s 5(4) of the Admiralty

Jurisdiction Regulation Act has to do with arrested property. The containers

were not arrested.

[74] It was then pleaded that Grindrod continued to detain the containers

and thereafter arrested them. I will revert to the question of their detention.

The pleader asserts that the breach of the legal duty (i.e. the legal duty to

ascertain MSC’s ownership of the containers) was negligent or wilful in that, in

addition, Grindrod did not comply timeously with a legal duty to take

reasonable and necessary actions to confirm that there was no “reasonable

and probable cause to continue to detain and/or arrest the containers”. That,

according to the pleading, resulted in Grindrod being liable to compensate

Arctocel in the amount it allegedly had to pay to MSC for demurrage from 10

January 2013 to 8 February 2013 when the cargo was released still inside the

containers.

[75] It is Arctocel’s case that there was no contract between it and Grindrod

on the subject of the storage of the containers. The alleged legal duty did not

spring from contract. The claim has no vindicatory foundation. Arctocel was

not the owner of the containers. The claim is one for damages allegedly

30

suffered in consequence of the negligent or wilful breach of a duty of care

allegedly owed by Grinrod to Arctocel to take steps to avoid Arctocel’s

obligation to pay demurrage charges to MSC. Properly understood, the cause

of action rests on an omission, and the claim is one for pure economic loss.

[76] In such a case our law imposes liability only where the omission is

shown to be wrongful. Wrongfulness is not assumed in cases of omission or

pure economic loss. See Gouda Boerdery BK v Transnet Ltd [2004] 4 All SA

500 (SCA) at para 12.

“It is now well established that wrongfulness is a requirement for liability under

the modern Aquilian action. Negligent conduct giving rise to loss, unless also

wrongful, is therefore not actionable. But the issue of wrongfulness is more

often than not uncontentious as the plaintiff’s action will be founded upon

conduct which, if held to be culpable, would be prima facie wrongful. Typically

this is so where the negligent conduct takes the form of a positive act which

causes physical harm. Where the element of wrongfulness gains importance is

in relation to liability for omissions and pure economic loss. The inquiry as to

wrongfulness will then involve a determination of the existence or otherwise of

a legal duty owed by the defendant to the plaintiff to act without negligence: in

other words to avoid negligently causing the plaintiff harm. This will be a matter

for judicial judgment involving criteria of reasonableness, policy and, where

appropriate, constitutional norms.” ( Footnotes omitted.)

And see Country Cloud Trading CC v Member of the Executive Council,

Department of Infrastructure Development, Gauteng 2014 (12) BCLR 1397

(CC).

“[21] Previously, it was contentious what the wrongfulness enquiry entailed,

but this is no longer the case. The growing coherence in this area of our law

is due in large part to decisions of the Supreme Court of Appeal over the last

decade. Endorsing these developments, this Court in Loureiro recently

articulated that the wrongfulness enquiry focuses on:

“the [harm-causing] conduct and goes to whether the policy and legal

convictions of the community, constitutionally understood, regard it as

31

acceptable. It is based on the duty not to cause harm – indeed to respect

rights – and questions the reasonableness of imposing liability.”

The statement that harm-causing conduct is wrongful expresses the conclusion

that public or legal policy considerations require that the conduct, if paired with

fault, is actionable. And if conduct is not wrongful, the intention is to convey the

converse: “that public or legal policy considerations determine that there should

be no liability; that the potential defendant should not be subjected to a claim

for damages”, notwithstanding his or her fault.

[22] Wrongfulness is generally uncontentious in cases of positive conduct that

harms the person or property of another. Conduct of this kind is prima

facie wrongful. However, in cases of pure economic loss – that is to say, where

financial loss is sustained by a plaintiff with no accompanying physical harm to

her person or property – the criterion of wrongfulness assumes special

importance. In contrast to cases of physical harm, conduct causing pure

economic loss is not prima facie wrongful. Our law of delict protects rights, and,

in cases of non-physical invasion, the infringement of rights may not be as

clearly apparent as in direct physical infringement. There is no general right not

to be caused pure economic loss.”

(Footnotes omitted. The reference to Loureiro: Loureiro and others v iMvula

Quality Protection (Pty) Ltd 2014 (5) BCLR 511 (CC).)

[77] Crediting Arctocel’s pleading with an implied allegation of wrongfulness,

the foundation for the assertion appears to be “I told you that I would have to

pay demurrage if you did not return the containers to MSC, and it thereby

became wrongful in relation to me for you not to do so.” The criterion of

wrongfulness requires a deeper investigation of the relationship between the

parties, and of the factual matrix, to determine whether legal policy

considerations justify recognising the duty and imposing liability.

[78] Arctocel put Darreb in possession of the containers. Arctocel owed

MSC a contractual duty to take care of the containers, and return them

presumably at an appointed time and by a method consistent with the practice

of that industry. It then entrusted Darreb with the duty to take care of the

containers. None of these things had anything to do with Grindrod.

32

[79] By the time that Arctocel contacted Grindrod, contractual obligations

had been imposed on Grindrod to keep the containers and the cargo safe and

available for delivery to Darreb. Mr Naidoo’s personal reactions to Arctocel’s

claim to the containers and the cargo (before the issue came under the direct

control of head office) were undeniably reasonable and understandable.

Firstly, it was not just a matter of money owed to Grindrod. He insisted that

Darreb had to become involved, obviously because his employer was under a

contractual obligation to return the containers and cargo to Darreb. Secondly,

he could not on Arctocel’s mere say-so accept that Arctocel had a claim to the

containers and cargo which trumped that of Darreb. In fact Arctocel did not

secure Darreb’s involvement in the release of the containers and cargo,

despite the fact that it was the party who in the first place put Darreb in

possession of them. There is no evidence that any proof of ownership of the

cargo in the containers was at any time produced to Mr Naidoo, or otherwise

to Grindrod.

[80] In my view against this background legal policy would not countenance

the imposition of a delictual duty on an unwilling party to perform something

that party already owed to another under contract. The fact that Grindrod

subsequently relented, and surrendered the containers and the cargo to

Arctocel, provides no argument in support of the proposition that it was

obliged to do so earlier. It would not be reasonable to impose the obligation

on Grindrod.

[81] One finds this observation in Country Cloud at paragraph 25. It is of

some significance in the present matter.

“But it should be noted – and this was unfortunately given little attention in

argument – that the element of causation (particularly legal causation, which is itself

based on policy considerations) is also a mechanism of control in pure economic loss

cases that can work in tandem with wrongfulness.

[82] According to the evidence of Mr Jhunjhunwala, Arctocel contracted with

MSC for the hire of containers upon the terms set out in certain standard

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terms and conditions which included a contractual obligation to pay

demurrage. The primary obligation to pay demurrage rested on Arctocel. If

demurrage was running against Arctocel’s interests, it was itself obliged to

take such steps as were necessary and available to it in order to prevent its

contractual obligation to pay demurrage running. That it could have done by

the simple expedient of asking Grindrod to unpack the containers so that they

could be surrendered to MSC. Mr Naidoo was asked about unpacking the

cargo and said that, if required, Grindrod could have removed the containers

to its Bluff depot and unpacked them there, an exercise which he estimated

would have cost about R40 000.

[83] As pointed out earlier in this judgment, it is overwhelmingly probable

that all the demands made for return of the containers were actually demands

for return of the containers together with the cargo lodged in them. Grindrod

offered itself to unpack the cargo and return the containers on 1 February.

That offer was declined. Mr Jhunjhunwala appeared to have regarded

unpacking the containers as impractical. One can see the disadvantages of

the exercise from his perspective. That inconvenience does not have a

bearing on the legal obligations imposed on the parties. In my view, upon the

assumption that demurrage for the period in question was actually charged

and paid, that was the product of the breach by Arctocel of its contract with

MSC in delaying the delivery of the containers to MSC. The primary

obligation to return the containers to MSC was Arctocel’s. The causa causans

of demurrage continuing to run was Arctocel’s default, not Grindrod’s. If

Arctocel had demanded of Grindrod that it should unpack the containers so

they could be returned to MSC, and Grindrod had refused to do so, matters

might have been different. (On Mr Naidoo’s evidence, and paying due regard

to the fact that Grindrod itself tendered to unpack the containers once the

cargo had been arrested, it seems that Grinrod would not have declined any

such request.) Instead of making that demand, Arctocel contrived to set

Grinrod up as the former’s indemnifier against demurrage charges. Allowing

Arctocel success in that endeavour would constitute an inappropriate and

unreasonable allocation of liability to Grindrod.

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[84] Arctocel’s efforts to prove the quantum of its claim for demurrage

should be briefly mentioned, as it has a bearing on Mr Jhunjhunwala’s

credibility. Arctocel’s efforts suffered from maladies similar to those already

discussed in relation to the claim for the loss of Medu 303. The contract

between MSC and Arctocel imposing the obligation to pay demurrage was not

produced. An invoice from MSC reflecting the charge for demurrage was not

produced. When pressed on this, Mr Jhunjhunwala suggested that the two-

page schedule annexed to the counterclaim was the invoice. There is no

evidence besides Mr Jhunjhunwala’s word that the schedule was produced by

MSC.

[85] Proof of payment of an amount of R1.5 million on 23 October was

handed in, according to the record, during Mr Jhunjhunwala’s evidence in

chief. The document was not included in the appeal record and we cannot

determine the year in which that payment was made. Proof of the fact that

Arctocel paid R1.5 million to MSC takes the matter no further. Judging from

Mr Jhunjhunwala’s evidence, Arctocel’s business with MSC would have run to

many millions at the time. No statement of account from MSC was produced,

and no ledger sheet (be it that of Arctocel or MSC) was produced to show the

raising of the debit and the allocation of a payment to it.

[86] According to Mr Jhunjhunwala, whilst the obligation to pay demurrage

was contractually fixed, the rate at which it would be paid was not. He

vacillated in his evidence between suggesting that he had to negotiate the

rates with MSC and saying that he was in effect bound to pay whatever MSC

said their rates were. No witness from MSC was called to establish the

obligation, to verify rates and indeed to corroborate Mr Jhunjhunwala’s

contention that the claim for the 29 days which features in the schedule

annexed to the counterclaim is genuinely quantified. Bearing in mind Mr

Jhunjhunwala’s evidence that Arctocel’s problems with Darreb arose because

of a transport strike during the second half of 2012, the containers on the list

were overdue by a margin significantly greater than the 29 days with which

Arctocel sought to burden Grindrod. Medu 303 features on the list. If it had

been loaded in mid-August 2012, its arrival at the Durban port stacks would

35

have been already five months overdue at the commencement date of the 29

days claimed (10 January 2013).

[87] In his evidence in chief Mr Jhunjhunwala was asked to state how the

schedule of demurrage claims annexed to the counterclaim came into being.

His answer was that MSC knew that Arctocel wished to deliver a

counterclaim, as a result of which

“they actually split the demurrage for ease of correctness or ease of

understanding into various bills and this was one of the schedules that they

gave us regarding the demurrage, specifically for the containers that were

arrested by Grindrod in relation to this court case”.

The various bills and the full picture regarding demurrage claims allegedly

made by MSC against Arctocel was withheld. It would obviously have been to

Arctocel’s advantage to have the bill attributed to the claim against Grindrod

loaded, and the others relating to other periods consequently less

burdensome. Mr Jhunjhunwala in effect asked the court to take his word on

trust. His word did not satisfy the requirement that in the circumstances of this

case the claim that demurrage was charged and paid in the claimed amount

had to be proved by substantial, detailed, reliable and satisfactory evidence

(Union Market Agency, supra).

[88] I conclude that the claim for compensation for demurrage ought not to

have been allowed.

The following order is made.

1. The appeal is upheld with costs.

2. The order of the court a quo allowing the respondent’s claims

in reconvention is set aside, and replaced with the following

order:

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“The first defendant’s claims in reconvention are dismissed

with costs.”

OLSEN J

CHETTY J

JIKELA AJ

37

Date of Hearing: WEDNESDAY, 29 JANUARY 2020 Date of Judgment: This judgment was handed down electronically by circulation to the parties’ representatives by email, and by release to SAFLII. The time and date for hand down is deemed to be at 09h30 on the 31st day of July 2020 For Appellant: Mr P J Wallis Instructed by: PRINSLOO INC.

APPELLANT’S ATTORNEYS Unit 6, 2ND Floor 72 Richefond Circle Ridgeside Office Park Umhlanga

(Tel.: 087 238 2289) (Ref.: P Prinsloo/K Fenner/GRIN32) (Email: prinsloo@prinslooinc.com and fenner@prinslooinc.com

c/o HAY & SCOTT ATTORNEYS

Top Floor, 3 Highgate Drive Redlands Estate 1 George MaCFarlane Lane Pietermaritzburg

(Ref.: Jeremy Frank Capon) (Tel No.: 033 – 342 4800) For Respondent: MR G D HURPUR SC Instructed by: CKMG ATTORNEYS RESPONDENT’S ATTORNEYS Suite 2, George Sewpersadh Centre 23 George Sewpersadh Street Verulam…4340 (Ref: Mr S Moodley/Natalie/A199) (Tel.: 032 533 0296 / 533 0274) (Email: ckmgattorneys@telkomsa.net) c/o DEV MAHARAJ & ASSOC INC 298 Prince Alfred Street Pietermaritzburg 3200 (Tel.: 033 342 2794) (Mr S Singh)