THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Case No:  311/09

In the matter between:

BUFFALO FREIGHT SYSTEMS (PTY) LTD

Appellant

and

CRESTLEIGH TRADING (PTY) LTD

First Respondent
MARIA ELIZABETH BATT

Second Respondent

Neutral citation:
Buffalo Freight Systems v Crestleigh Trading (311/09)

[2010] ZASCA 66 (24 May 2010)

Coram:
HEHER, SHONGWE, TSHIQI JJA and MAJIEDT and SALDULKER
AJJA

Heard:
12 March 2010

Delivered:
24 May 2010

Summary:
Contract – whether an oral agreement subsequently entered into by
the parties introduces a variation or waiver of the original written
agreement – Practice – motions – whether genuine dispute of facts
exists – whether the appellant is entitled to invoke a right of lien.

________________________________________________________________

ORDER
________________________________________________________________

On appeal from:
South Gauteng High Court (Johannesburg) (Boruchowitz J
sitting as court of first instance):

1.
The appeal is upheld with costs.

2.
The order of the court quo is set aside and substituted with the following:

‘1.
The application is granted.

2.
The lien enjoyed by the applicant over the containers described in
Annexure X to the Notice of Motion as “File 805.JSG.3995,” “File
805.JSG.4284,” “File 804.JSG3865,” “File 804.JSG 3947”, “ File 804.JSI
4015”  is confirmed.

3.
The first and second respondents are ordered, jointly and severally, the
one paying the other to be absolved, to pay to the applicant, the sum of
R600 591. 05 together with interest thereon at the rate of 15.5% per
annum a tempore morae from 31 May 2008 to date of payment.

4.
Failing such payment the applicant is authorized to sell the goods referred
to in paragraph 2 above to the extent necessary to cover any shortfall in
the unpaid amount in paragraph 3 above.

5.
The first and second respondents are ordered to pay the costs of the
application jointly and severally.

6.
The counter-application is dismissed with costs.’

________________________________________________________________

JUDGMENT
________________________________________________________________
SHONGWE JA (HEHER, TSHIQI JJA and MAJIEDT and SULDULKER AJJA
concurring):

[1] This appeal raises the questions of whether the appellant is entitled to
invoke a right of lien over goods received by it on behalf of the first respondent in
terms of a facility granted to the first respondent by the appellant and whether an
oral arrangement subsequently entered into by the parties disentitled the
appellant from relying on certain trading terms and conditions.

[2] The appellant claimed final relief in the South Gauteng High Court,
Johannesburg, in the following terms:

2.1
Confirmation of a lien allegedly enjoyed by it in respect of certain shipping
containers.

2.2
Payment of the sum of R543 469. 54 together with interest thereon from
31 May 2008 in respect of clearing and forwarding services rendered on
behalf of the first respondent.

2.3
An order authorising the appellant to sell all the goods which form the
subject matter of the lien.

[3] The first respondent filed a counter-application in which it sought delivery
of three containers retained by the appellant by virtue of the alleged lien.
Boruchowitz J dismissed the application and granted the counter-application.  In
both instances the costs followed the result.  This appeal is with leave of the
court a quo.

[4] At the hearing of this appeal, counsel for the appellant moved to increase
its claim by an amount of R 57 121.51. This was in respect of a charge for
services rendered which the appellant had, by oversight, omitted from its claim
as formulated in the application papers. It was clear from the answering affidavit
that the first respondent admitted that the debt had been incurred. Counsel for
the first respondent, very properly, did not oppose the amendment, which is now
formally granted.

[5] The appellant carries on business as a freight forwarding and clearing
agent.  The first respondent is a furniture importer and retailer.  The second
respondent is sued in her capacity as a surety in terms of a written deed of
suretyship.  The appellant relies on an agreement which initially incorporated its
standard trading terms and conditions and granted a thirty day credit line to the
first respondent. In particular the appellant relies on clause 6 of the conditions.
Clause 6 reads:

‘Unless specifically agreed otherwise by the Corporation, all disbursements made by the
Corporation on behalf of the customer as well as all fees charged to the customer by the
Corporation
for
agency,
documentation,
carriage,
warehousing,
freight,
financing
of
disbursements or any other intervention by the Corporation, are payable on presentation of the
account without deduction or set off. No amount may be deferred or withheld by reason of any
claim or counter-claim. The Corporation shall have a special and general lien over all goods as
security for all monies owing by the customer to the Corporation.’

[6] From the series of invoices forming part of the record it is clear that the
appellant’s standard trading conditions were applicable.  They were invariably
referred to at the back of each instruction sheet, both before and after the
revocation of the credit line and even after the fallout between the parties in May
2008 to which I shall allude next.

[7] During the latter half of 2007 the first respondent experienced financial
difficulties with the result that it breached its contractual obligations by failing to

pay the appellant within the agreed time frame and in some instances by not
paying at all.  The appellant was compelled to revoke the credit facilities and deal
with the first respondent on a strictly cash basis.  It is common cause that in
January 2008 an amount of R756 604.40 was owing by the first respondent.  In
January 2008 various post-dated cheques were issued in an attempt to settle the
debt.  Two of them were met, but a cheque for R306 604.40 dated
31 March 2008 was dishonoured by an instruction to stop payment in April 2008
It was contended on behalf of the appellant that this revocation of the credit line
did not evince an intention  by the appellant to cancel the agreement. The
invoices continued to incorporate reference to the standard trading conditions
after the termination of the credit line.  It is clear that they regulated the
relationship between the parties as before.

[8] Subsequent to the dishonouring of the cheque the appellant received five
containers on behalf of the first respondent.  These arrived on 18 April 2008,
21 April 2008, 24 April 2008, 11 May 2008 and 27 May 2008.  The appellant
incurred further handling and storage charges. The first respondent’s
indebtedness to the appellant increased.  A meeting was held on 5 May 2008 to
discuss payment of the first respondent’s indebtedness.  The appellant alleges
that the first respondent undertook to effect payment of the outstanding debt in
full on a weekly basis commencing the following week.  In addition, it is common
cause that the second respondent signed a deed of suretyship for due payment
of the first respondent’s indebtedness.  This is where a major dispute of fact
arises.  The first respondent contends that a suspense account was to be
opened in respect of the arrears and the amount was to be paid off as and when
the first respondent had money to pay.  In support of the first respondent’s
contention three affidavits of witnesses (namely Mrs Batt, its manager, Mr Brown
a director and Batt’s son, and Ferreira, an employee) who were present at the
meeting were produced.  In my view, they differ in what the first respondent is
alleged to have said in respect of a number of matters including when payment
was to be expected.  I shall deal with this aspect in detail later in the judgment.

[9] The first respondent failed, in the appellant’s view of the agreement, to
effect payment in the week following 5 May 2008.  The appellant addressed a
letter on 13 May 2008 to the first respondent demanding payment of the sum of
R 674 131.82.  In this letter the appellant referred to the standard conditions
which entitled it to declare a lien and sell the goods to recover the amount of the
indebtedness.  This letter was followed on 27 and 28 May 2008 by a series of e-
mails between the appellant and the first respondent.  The gist of the e-mails is
that the first respondent admitted that the sum of R307 000.00 was overdue and
that it was prepared to pay interest on that amount.  The appellant adopted the
stance that it had afforded respondents extended time to sort out their finances
but, since no further payment had been effected, it intended exercising its lien.
The first respondent raised the issue of the credit and cash accounts.  It
contended, without referring to the alleged compromise agreement, that all
monies paid in terms of the cash account had been paid and therefore the
appellant could not exercise the lien which it enjoyed in respect of the goods.
The appellant raised the issue of the stopped cheques and also to the threat to
sell the goods and using the proceeds to settle the indebtedness.

[10] Only on 3 June 2008 did attorneys representing the first respondent raise,
for the first time, the existence of the settlement agreement.   But the letter does
not include the alleged accord relating to the release of the containers paid for in
cash which the respondent’s witnesses state have been agreed on 5 May 2008.
It refers neither to the alleged limitation on the terms of the suretyship (ie to
existing indebtedness only) nor to the alleged undertaking by Mrs Batt to destroy
it on satisfaction of that indebtedness. As these were all matters that Mrs Batt
and later Brown said they regarded as material to the agreement, the omissions
are strange.  The appellant commenced proceedings on 4 June 2008.In the
interim the first respondent had addressed a letter dated 3 June 2008 to the
appellant demanding the release of the three containers already paid for. The
counter-application followed when the demand was ignored.

[11] The appellant contends that the sum of R543 469.54 is due and payable
by the first respondent and that at the time of the application it had received five
containers on behalf of the first respondent, against which it was exercising a
lien.  It contended further that it had cleared three containers which were in
storage and that the remaining two containers had been placed in bond, but had
to be cleared by customs with resultant further disbursements.  Costs were said
to be increasing on a daily basis and amounted to R130 726.55 at the time of the
application.

[12] The respondent on the other hand contended that in terms of the January
2008 agreement all further freight services by the appellant would be on a strictly
cash basis and that on 5 May 2008 the parties entered into an oral agreement in
terms whereof the first respondent could pay the outstanding R306 604.40 as
and when money became available, on condition that the second respondent
signed a personal deed of suretyship in favour of the appellant.  It further
contended that the sum of R306 604.40 was to be transferred to a suspense
account and in addition it was contended, the appellant undertook to release the
three containers in its possession which were paid for in cash.

[13] As I have already said, it is plain that the parties conducted their business
on the basis of the standard trading conditions in respect of transactions material
to the present matter.  Counsel for the first respondent argued but faintly to the
contrary.   The revocation of the credit line, in my view, simply closed down the
credit facility but did not affect the trading conditions.

[14] The purpose of the meeting on 5 May 2008 was to seek payment of the
outstanding amount, or at least assurance that it would be paid on conditions
acceptable to the appellant, and the time frame within which it could be paid.
The dispute is on when and how the debt would be paid.  The appellant contends
that the agreement was that payment would be made on a weekly basis
commencing the following week, whereas the first respondent’s version was that

payment would be effected as and when money was available.  The latter
version is inherently improbable to a high degree.  A few examples will suffice; it
is unlikely that the first respondent would have moved from a position of relative
certainty to one of extreme uncertainty.  It was in possession of a dishonoured
cheque and it had clear contractual rights. There was also no dispute as to the
indebtedness. To strengthen the appellant’s position it requested additional
security by requiring a signed suretyship.  Of what value would the suretyship
have been if the first respondent would pay as and when money was available?
And of what value would an undertaking not to rely on the suretyship have been
to it as the second respondent averred?  The subsequent conduct of the
respondents is at odds with any bona fide belief in the minds of its
representatives that agreement had been reached on the terms later alleged by
them.

[15] As I mentioned earlier to illustrate the contradictions, the respondent’s
witnesses,  Batt, Brown and Ferreira put forward versions different as between
themselves and at odds with that of Mrs Wolff (a representative of the appellant).
In essence their story was that Wolff wanted to be paid weekly, but Batt told her
that she was not prepared to give undertakings which she might not be able to
keep.  A compromise was reached.  In order to reflect the flavour of their case
accurately I prefer to set out the contents of their respective statements (which
they included in the answering papers).

[16] Mrs Batt stated as follows:

‘I had a meeting with Margrit Wolff from Buffalo Freight on the 5th May, 2008 regarding the
outstanding amount of R306 604.40.  The meeting was to make some arrangements to pay this
amount off. She did say that there will be interest charged on this amount to which I agreed.  I
took Jacques Brown and Rita Ferreira with me so that whatever was said between us I had
witnesses. Margrit called Sally from their accounts department to sit in for this meeting.  Margrit
asked me if I can promise her that there will be a weekly payment for the outstanding amount.
My answer to her was ”Margrit I will never, ever make a promise that I cannot keep.  I will make

payments to you as I get money.”  Then Margrit asked me to sign surety for this amount.  She
said she will not use it, and will destroy it when the money was paid to her.  I signed it.  Margrit
then told Sally that she must bring this amount into the current month and on this amount I will
have to pay interest.  After we agreed to the above arrangements, I then asked Margrit about the
container that was with them.  I asked Margrit if she will release the container.  She agreed to
this.  The invoice for this container was R108 705.30.  I paid this amount on May 08, 2008.  When
I phoned they said Margrit will still not release the container.  Then I got another invoice for R61
192.02 and a second invoice for R64 651.65 I added them up and got to a total of R125 843.67.  I
then wrote a cheque for the amount of R139 874.06 on the 16th May 2008.  That was R14 030.39
more than the invoices that was given to me by Buffalo Freight.  Then the next thing I know all
these invoices were given to me with all these costs.  I really thought we could work this out, but I
am not sure.  In the containers are orders where clients have paid a deposit and were going to
pay in full when we delivered the goods to them.  Now that we have not received the goods and
can’t supply the clients we have to pay them back.  Given the above how does Margrit expect us
to make more regular payments.’

[17] Brown described events as follows:

‘Myself and Mrs Batt explained our situation to Mrs Wolff and we asked her for help.  Mrs Wolff
then said that she would help us and the following agreement was made.  Mrs Wolff said that the
money will be placed in a holding account and that we could pay the amount off.  We then told
her that we could not say how much we are capable of paying every month but that we will pay it
off as soon as we possibly can.  There was no specific amount or time limit given to us.  Further
more we made arrangements with the containers held by Buffalo Freights and we agreed to pay
them in full then they would be released to Crestleigh Trading. Mrs Wolff gave a letter to Mrs Batt
to sign for surety and said that she would not use the letter and that it would be destroyed once
the account was settled. To my knowledge payment was made in full on container at Buffalo
Freight and none of the containers released yet.  Payment made exceeded the amount due on
containers.  And we took it that the balance was paid on holding account.  So in short we are
trying to comply with the agreement.’

[18] Ferreira stated that:

‘Mrs Batt explained to Margrit that she has a problem to pay the outstanding amount and asked
her if she could pay it off as the money comes in, she will try and pay it off as quick as what she
can, Margrit asked her if she can promise her a payment every week, where Mrs Batt told her she

will never make a promise where she is not 100% that she can keep to that.  At one stage Margrit
asked Mrs Batt to sign a surety letter, Margrit still said she will not use it and will destroy it as
soon as the amount was settled.

At that stage I told Margrit that I was caught with the same type of letter and the same promises.
She then said she will not use it we got her word, and that we can be there when she destroy if
Mrs Batt did sign the letter.

Margrit told Sally to take the amount of R306 604.40 out of the period it was in and bring it in as a
current account.

Only after this was agreed on Mrs Batt asked Margrit if she will release the container that was
with them, Margrit said if she get the payment for the container she will do so. Mrs Batt told me
she has paid Margrit for that container but she still don’t want to release the container. Mrs Batt
also told me that she got two more invoices from two more containers, she has paid the two
invoices and with a little extra so that the amount can come off, even if it is little by little.’

[19] The court a quo approached the matter on the basis that the facts
pertaining to the agreement of 5 May 2008 were in dispute and that there had
been no request by the appellant that the matter be referred for evidence or trial.
It then applied the principle in Plascon-Evans Paints Ltd v Van Riebeeck Paints
(Pty) Ltd 1984 (3) SA 623 (A) at 634 E-F (where it was held that the court must
deal with the matter on the basis of the respondent’s version coupled with the
admitted facts in applicant’s papers) However, in Truth Verification Testing
Centre CC v AE Truth Detection CC 1998 (2) SA 689 (W) at 698 H-J ,  Eloff AJ
said:

‘I am also mindful of the fact the so-called robust common-sense, approach’ which adopted in
cases such as Soffiantini v Mould 1956 (4) SA 150 (E) in relation to the resolution of disputed
issues on paper usually relates to situations where a respondent contents himself with bald and
hollow denials of factual matter confronting him.  There is, however, no reason in logic why it
should not be applied in assessing a detailed version which is wholly fanciful and untenable.’

I respectfully agree. The court should be prepared to undertake an objective
analysis of such disputes when required to do so. In J W Wightman (Pty) Ltd v

Headfour (Pty) Ltd 2008 (3) SA 371(SCA), it was suggested how that might be
done in appropriate circumstances. The present case calls for a similar analysis.

[20] A court must always be cautious about deciding probabilities in the face of
conflicts of facts in affidavits. Affidavits are settled by legal advisers with varying
degrees of experience, skill and diligence and a litigant should not pay the price
for an adviser’s shortcomings. Judgment on the credibility of the deponent,
absent direct and obvious contradictions, should be left open. Nevertheless the
courts have recognised reasons to take a stronger line to avoid injustice. In Da
Matta v Otto 1972 (3) SA 858 (A) at 689 D-E, the following was said:

‘In  regard to the appellant ‘s sworn statements alleging the oral agreement, it does not follow that
because these allegations were not contradicted – the witness who could have disputed them
had died – they should be taken as proof of the facts involved. Wigmore on Evidence, 3rd ed., vol.
VII, p.260, states that the mere assertion of any witness does not of itself need to be believed,
even though he is unimpeached in any manner, because to require such belief would be to give a
quantative and impersonal measure to testimony. The learned author in this connection at p. 262
cites the following passage from a decision quoted:

“it is not infrequently supposed that a sworn statement is necessary proof, and that, if
uncontradicted, it established the fact involved. Such is by no means the law. Testimony,
regardless of the amount of it, which is contrary to all reasonable probabilities or conceded facts-
testimony which no sensible man can believe-goes for nothing; while the evidence of a single
witness to a fact, there being nothing to throw discredit, cannot be disregarded.”

Also in Siffman v Kriel, 1909 T.S. 538, INNES, C.J., at p 543 says:

“It does not follow, because evidence is uncontradicted, that therefore it is true … The story told
by the person on whom the onus rests may be so improbable as not to discharge it.”

[21] I am satisfied that the court a quo should have adopted this approach
when considering the first respondent’s defence and version of what happened at
the meeting of 5 May 2008.  If it had done so, it must have concluded that no
genuine factual dispute existed and that the version propounded by the

respondents was fanciful and wholly untenable.  In the premises I find that no
compromise agreement had been reached on 5 May 2008 as contended for by
the respondents.  The appellant’s contention to the contrary ought to have been
upheld by the court below.  It should have come to the conclusion that the
standard trading terms and conditions alluded to in the preceding paragraphs
had in fact remained extant.

[22] I am constrained to disagree with the finding of the court a quo that the
quantification of the applicant’s claim could not be ascertained from its affidavits.
An examination of the statements and tax invoices shows clearly how the sum of
R543 469.54 was arrived at.  They cover all debits and credits.  As referred to
earlier the amount of R57 121.51 has been added to the claim by reason of the
amendment.  The first respondent is therefore entitled to judgment for
R600 591.05.

[23] There was no dispute that if the appellant was entitled to enforce its claim
against the first respondent at the time that it purported to exercise its lien over
the three containers, it was also lawfully entitled to the security which the lien
provided.   It follows that the counter-application should have been dismissed.

[24] In the result:

1.
The appeal is upheld with costs.

2.
The order of the court quo is set aside and substituted with the following:

‘1.
The application is granted.

2.
The lien enjoyed by the applicant over the containers described in
Annexure X to the Notice of Motion as “File 805.JSG.3995,” “File

805.JSG.4284,” “File 804.JSG3865,” “File 804.JSG 3947”, “ File 804.JSI
4015”  is confirmed.

3.
The first and second respondents are ordered, jointly and severally, the
one paying the other to be absolved, to pay to the applicant, the sum of
R600 591. 05 together with interest thereon at the rate of 15.5% per
annum a tempore morae from 31 May 2008 to date of payment.

4.
Failing such payment the applicant is authorized to sell the goods referred
to in paragraph 2 above to the extent necessary to cover any shortfall in
the unpaid amount in paragraph 3 above.

5.
The first and second respondents are ordered to pay the costs of the
application.

6.
The counter-application is dismissed with costs.’

________________

J SHONGWE

JUDGE OF APPEAL

APPEARANCES:

For Appellant:

M Nowitz

Instructed by:

Nowitz Attorneys, Johannesburg

Honey Attorneys, Bloemfontein

For 1st Respondent:
D J Joubert

Instructed by:

Schickerling Bowen & Hesselink Inc, Johannesburg

Matsepe Inc, Bloemfontein