IN THE HIGH COURT OF SOUTH AFRICA
(WITWATERSRAND LOCAL DIVISION)

Case No.  07/2743
Date:08/09/2008
In the matter between:

COPPER COBALT DEVELOPMENT LIMITED,
formerly known as:
SUDFRACHT OPERATING LIMITED.................................................................Plaintiff

and

THERMO FISHER SCIENTIFIC (JOHANNESBURG) (PTY) LIMITED,
formerly known as:
THERMO ELECTRON CORPORATION (PTY) LIMITED..............................Defendant 

											
JUDGMENT

[1]	The plaintiff claims repayment of its part performance under a sale agreement between the parties, which agreement the plaintiff claims had been cancelled by it as a result of the defendant’s repudiation thereof.  The defendant’s repudiation is, in the plaintiff’s particulars of claim, alleged to have been the sale of the same instrument that formed the subject-matter of the sale agreement with the plaintiff, to ‘Buffalo Mine’ during the course of April 2006.      

[2]	The plaintiff called as witnesses one of its directors, Mr. Ian Campbell Ross, and Ms. Linda Fourie, who represented the plaintiff in its dealings with the defendant.   Mr. van der Westhuizen, who is the managing director of the defendant, and Ms. Maggie Loubser, who testified on the issue whether the instrument forming the subject-matter of the agreement between the parties was defective or not, were called to testify on behalf of the defendant.

[3]	The single issue for decision that crystallised during the course of the trial is whether the defendant repudiated the oral sale agreement between the parties. Concessions made by the defendant’s managing director, Mr. van der Westhuizen, during his cross-examination make it unnecessary to analyse the evidence in any detail herein since the factual conflicts between the parties relate more to background issues.  

[4]	On 2 July 2004 at the plaintiff’s business premises at Brakpan, the plaintiff, represented by Ms. Fourie, and the defendant, represented by Mr. Stuart Bateman, concluded an oral agreement in terms of which the plaintiff purchased a Thermo Arl Advant X XRF	 laboratory instrument (“the instrument”) from the defendant for the total purchase consideration of R994 935.00.  

[5]	It is common cause that the reason why this particular instrument was purchased by the plaintiff from the defendant was its ability to also measure accurately the fluorine element of certain deposits processed at the Buffalo Fluorspar Mine, Naboomspruit.  Mr. Ross testified that the plaintiff’s main laboratory was situated at its business premises at Brakpan, but it established a satellite laboratory at the Buffalo Fluorspar Mine where it conducted laboratory analyses for overseas purchasers of the fluorine and calcium content in control samples of fluorspar that were produced out of residue tailings at that mine.  It was agreed that the instrument would be delivered and installed for the plaintiff at the Buffalo Fluorspar Mine, Naboomspruit.  

[6]	The instrument was duly delivered and its installation was completed on the 12th July 2004.  The plaintiff paid the sum of R497 467.50 to the defendant, which was only 50% of the agreed purchase consideration.  It is common cause that the plaintiff, on numerous occasions, complained to the defendant that the instrument was not measuring the fluorine elements accurately, but the causes for such incorrect readings were in dispute.

[7]	On the 31st March 2005, the plaintiff, represented by Ms. Fourie, and the defendant, represented by Mr. Bateman and by the defendant’s Customer Care Manager, Mr. Marius Ferreira, orally agreed that the instrument would be returned to the defendant for about two to three weeks for repair, calibration and tests, and that it would be re-commissioned at the Buffalo Fluorspar Mine should the plaintiff ‘… be satisfied with the instrument performance and the fluorine analysis, …’  [see:  e-mail dated 31 March 2005 from Mr. Ferreira to Ms. Fourie (exhibit A11)].  Mr.van der Westhuizen testified that it was agreed that the plaintiff would pay the balance of the purchase price when the defendant demonstrated that the instrument was working properly.  The instrument was thereafter removed and returned to the defendant on the 1st April 2005.

[8]	The plaintiff was thereafter also not satisfied with the instrument’s fluorine analyses.  Ms. Fourie testified that she was invited by the defendant to inspect the instrument’s performance at the defendant’s business premises in Kempton Park, and, when she tested its fluorine analyses during August or September 2005, it remained inaccurate.  Ms. Loubser, who is a scientific analyst at the University Pretoria, testified that she calibrated the instrument for the defendant and performed analyses with it of various elements in inorganic material, and that the fluorine analyses obtained by her were accurate.  In support of such accuracy, she referred to analyses results dated 14 September 2005 (exhibit A16), but under cross-examination it appeared that the results were not obtained with the instrument in issue.  

[9]	Ms. Fourie testified that she constantly discussed the matter with the plaintiff’s Mr. Bateman and with Ms. Loubser, but her efforts to resolve the problem stopped early in 2006, because the Buffalo Fluorspar Mine was sold during that time and the plaintiff was no longer conducting a laboratory at that mine.   

[10]	It is common cause that a meeting between the parties was held at the plaintiff’s business premises in Brakpan during March 2006.  The meeting was attended by Mr. Ross and by Ms Fourie on behalf of the plaintiff, and by Mr. van der Westhuizen and Mr. Bateman on behalf of the defendant.  Mr. van der Westhuizen testified that the meeting was convened at the instance of the defendant to resolve the issues pertaining to the redelivery of the instrument and the payment of the balance of the purchase price.  Mr. Ross testified that he explained to the defendant’s representatives that the mine was sold, that the plaintiff’s services were no longer required at the mine, that the plaintiff no longer had any use for the instrument, and that it was never capable of measuring fluorine accurately.  In his evidence in chief, Mr. van der Westhuizen agreed that they were told that the plaintiff no longer required the instrument, but he denied that it was mentioned that the mine was sold.  Under cross-examination he, however, conceded that Mr. Ross informed them that the plaintiff was no longer undertaking fluorine analyses, and that he might have told them that the mine was being sold.  It is common cause that Mr. Ross suggested that the matter be resolved on the basis of the defendant retaining the instrument and repaying to the plaintiff such part of the purchase price that the plaintiff had paid.  Mr. van der Westhuizen was not prepared to agree to such proposition, and it was then agreed that the parties would endeavour to reach agreement on the defendant rather supplying the plaintiff with other instruments that could be of use to the plaintiff.  Two possible instruments were mentioned.  No such further agreement could be reached between the parties for reasons that are disputed.

[11]	On the 7th April 2006, the defendant delivered the instrument to an entity called Rooiberg Stone.  Mr. van der Westhuizen was unable to say whether Rooiberg Stone was a company or close corporation.  The name of the Buffalo Fluorspar Mine was, according to Mr. van der Westhuizen, changed to that of Rooiberg Stone (“the mine”).  The delivery of the instrument to the mine occurred pursuant to an agreement reached between Mr. van der Westhuizen, who acted on behalf of the defendant, and a Mr. Bou Raath, who represented the mine, relating to the delivery of the instrument to the mine and the payment in installments of the outstanding sum of R497 467.50, which was the balance owed to the defendant in terms of its oral agreement with the plaintiff.  

[12]	The defendant delivered the instrument to the same premises to which the instrument had previously been delivered to the plaintiff in July 2004, but Mr. van der Westhuizen was aware that the plaintiff was no longer in possession of such premises.  He was also aware that a different entity, Rooiberg Stone, and not the plaintiff, thereafter made the payments in respect of the instrument to the defendant.  

[13]	Mr. van der Westhuizen conceded that the plaintiff and the mine were separate and different entities at the time when the relevant events occurred;  that the mine was then represented by Mr. Raath and the plaintiff by Mr. Ross;  that the instrument was not delivered to the plaintiff on the 7th April 2006, but to the mine;  that the mine became the owner thereof once it had paid the amount of R497 467.50 to the defendant;  that, as from 7 April 2006, the defendant consequently became unable to deliver the instrument to the plaintiff, and thereafter, since about 30 June 2006,  to also transfer the ownership thereof to the plaintiff;  and that the second defendant never redelivered the instrument to the plantiff ever since it removed it on the 1st April 2005.

[14]	The defendant’s aforesaid conduct, in my view, objectively exhibited a deliberate and unequivocal intention on its part not to be bound any longer by the oral agreement that had been concluded between the parties on the 2nd July 2004, and orally amended or supplemented by them on the 31st March 2005 [see:  Datacolor International (Pty) Ltd v Intamarket (Pty) Ltd 2001 (2) SA 284 (SCA), at p 294;  Van Rooyen v Minister van Openbare Werke en Gemeenskapsbou 1978 (2) SA 835 (A), at pp 845 – 846].  I am accordingly of the view that the evidence establishes on a balance of probabilities that the defendant repudiated the oral agreement.  

[15]	The undisputed evidence of Mr. Ross was that the plaintiff consequently elected to terminate the agreement.  It is also common cause that the defendant received the plaintiff’s letter of 10 August 2006 wherein it communicated its election to the defendant (exhibit A29).

[16]	It is common cause on the pleadings that the plaintiff paid to the defendant the sum of R497 467.50 as part payment of the purchase consideration in terms of the oral agreement.  The plaintiff in the circumstances is, in my view, entitled to restitution of its performance [see:  Tuckers Land and Development Corporation (Pty) Ltd v Hovis 1980 (1) SA 645 (A)].          

[17]	In the result the defendant is ordered to pay to the plaintiff:
(a)	the sum of R497 467.50;
(b)	interest on the amount of R497 467.50 at the rate of 15.5% per annum from 10 August 2006 until the date of payment;
(c)	the plaintiff’s costs of the action on the party and party scale;
(d)	the plaintiff’s costs of the application for the amendment of the defendant’s plea that was granted on the 3rd September 2008. 

							
P.A.  MEYER
JUDGE OF THE HIGH COURT

8 September 2008