Grindrod Intermodal, a Division of Grindrod (South Africa) (Pty) Limited v The Cargo carried in containers listed in Annexure "A" to the Summons (namely, Scrap Metal) (AR159/2019) [2020] ZAKZPHC 33 (31 July 2020)

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:

The appeal is upheld with costs.

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.”

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 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.

[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 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.

[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 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 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 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 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 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 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 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.

[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, 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 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 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 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 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 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:

‘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 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 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 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 [1998] ZASCA 101; 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.

[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 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.

(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 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.

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 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 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.

[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 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.

[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 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:

OLSEN J

CHETTY J

JIKELA AJ

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

3200

(Tel.: 033 342 2794)

(Mr S Singh)