Section 27 Ridgeprop CC t/a Tile Distributers SA v Sharaf Cargo (Pty) Ltd (12622/08) [2009] ZAKZDHC 39 (19 May 2009)

IN

THE HIGH COURT OF SOUTH AFRICA

DURBAN

AND COAST LOCAL DIVISION

CASE NO.: 12622/08

In the matter between

SECTION 27 RIDGEPROP CC

T/A TILE DISTRIBUTORS SA

APPLICANT

and

SHARAF CARGO (PTY)

LTD RESPONDENT

______________

JUDGMENT

MOKGOHLOA J

1. The Applicant brought an application seeking the order in the following terms:

“Part A

(a) Interdicting the Respondent from disposing, alienating, selling, encumbering or burdening the Applicant’s 4589 cartons of tiles. (“the goods”)

Part B

(a) Declaring that the detention of the Applicant’s goods is unlawful.

(b) Declaring that the Applicant is not liable for any storage costs after 9 September 2008.

(c) Ordering the Respondent to forthwith release the goods into the Applicant’s possession.”

2. On 20 October 2008, Jappie J adjourned this matter to the opposed motion roll and recorded that the Respondent made an undertaking not to dispose the goods until the finalisation of this matter.

Background

3. The Applicant purchased certain tiles (“the goods”) from a Chinese company called Trans West Traders. The full purchase price of $25 326.01 US Dollars was paid by the Applicant to Trans West Traders. The purchase price included the sea freight charges to have the goods delivered to the Applicant at the Durban Port. The delivery of the goods was effected to the Applicant by Trans West Traders through the Bill of Lading given to the Applicant. A copy of the Bill of Lading is annexed to the Applicant’s founding affidavit. The Bill of Lading states the shipper as Trans West Traders (Pty) Ltd, consignee as the Applicant and the agent of the carrier as Penasa Logistics (HK) Ltd. On the left bottom side of the Bill of Lading the following is stated: “For Delivery of Goods Apply to: Sharaf Cargo (Pty) Ltd” (the Respondent herein).

4. The Applicant presented the Bill of Lading to the Respondent to obtain delivery of the goods. The Respondent refused to deliver or release the goods to the Applicant because of the debt owing by the Applicant to the Respondent. According to the Respondent it withheld the Bill of Lading as a lien to that debt.

5. It appears that the Applicant and the Respondent have previously entered into a written contract in terms of which the Respondent had to render certain services to the Applicant upon Applicant paying for such services. A certain amount of money became due and payable to the Respondent. The Applicant paid part of that money and declared a dispute on the remaining balance. In addition, the Applicant made a tender to pay the disputed amount into an attorney’s trust account until the dispute was settled. The Respondent was, according to the tender, required to commence legal proceedings against the Applicant in respect of the disputed amount within fifteen (15) days of the tender. The Respondent refused to accept this tender. The Respondent relied on Clause 38 of the written contract between the Applicant and the Respondent termed the “Standard Trading Terms and Conditions”, and insisted on holding a lien over the Bill of Lading.

Lien

6. Clause 38 of the Standard Trading Terms and Conditions provided as follows:

“All goods and documents relating to goods including bills of lading and import permits, as well as all refunds, repayments, claims and other recoveries, shall be subject to a special and general lien and pledge either for monies due in respect to such goods or for other monies due in respect of such goods or for moneys due to the company from the customer, sender, owner, consignee, importer or the holder of the bill of lading or their agents, if any. If any moneys due to the company are not paid within 14 days after notice has been given to the person from whom the moneys are due that such goods or documents are being detained, they may be sold by auction or otherwise or in some other way disposed of for value at the sole discretion of the company and at the expense of such person, and the nett proceeds applied in or towards satisfaction of such indebtedness”.

7. Mr Omar, for the Applicant, argued that the Respondent cannot rely on the terms of the Standard Trading Terms and Conditions in that:

7.1.1 Section 34 of the Constitution gives everyone the right to have any dispute that can be resolved by the application of the law decided in a fair public hearing before a court or another independent and impartial tribunal. According to Mr Omar, the Applicant was therefore not bound to the provisions of Clause 38.

7.1.2 The goods in question do not fall under “goods” as defined in the Standard Trading Terms and Conditions agreement as they did not come under control of the Respondent through the instructions from the Applicant.

8. I find, with the greatest respect, Mr Omar’s argument to be without substance. Firstly clause 45 of the Standard Trading Terms and Conditions provides as follows:

“DISPUTES

45.1 Should there be any dispute of any nature whatsoever between the parties in regard to any aspect, matter or thing relating to these trading terms and conditions and whether or not the company has executed its obligations in terms of any agreement it has with the customer, then in such event the customer shall nevertheless be obliged to perform its obligations in terms of any agreement as though the company had performed properly and to the customer’s satisfaction.

45.3 Without affecting the generality of clauses 45.1 and 45.2 the customer shall not be entitled to withhold payment of any amounts, by reason of any disputes with the company, whether in relation to the company’s performance in terms of any agreement, or lack of performance or otherwise, after which payment the customer’s rights of action against the company in terms of this clause can be enforced. Until such payment is made, any rights that the customer may have, shall be deemed not yet to have arisen and it is only the payment to the company which releases such rights and makes them available to the customer in respect of any claim that he may have against the company” . (my underlining)

9. It is not in dispute that there are certain monies due to the Applicant by the Respondent. It is therefore clear that the Applicant has to first pay all the money due to the Respondent before any action can be instituted against the Respondent for the delivery of the goods. The Respondent is entitled in terms of clause 38 to hold the Bill of Lading as lien over the monies due. The provisions of section 34 of the Constitution Act are therefore not applicable herein unless the Applicant can show that clause 38 is unconstitutional.

10. Secondly, clause 1.3.3 of the Standard Trading Terms and Conditions provides:

“ ‘goods’ means any goods handled, transported or dealt with by or on behalf of or at the instance of the company or which came under control of the company or its agents, servants or nominees on the instructions of the customer, and includes any container, transportable tank, flat pallet, package or any other form of covering, packaging, container or equipment used in connection with or in relation to such goods”.

11. The Bill of Lading states that the consignee (the Applicant herein) has to apply to the Respondent for the delivery of the goods. It is therefore clear that the goods are handled by the Respondent on behalf of the Applicant.

12. The last issue is whether the Respondent has disposed the goods. Mr Omar argued that the goods were in possession of the Respondent at the time the undertaking was made (on 20 October 2008) and that the Respondent disposed them by placing them in possession of Safmarine Containers Terminal. Mr Mossop, on behalf of the Respondent submitted that the Respondent did not dispose the goods. According to Mr Mossop the Respondent holds the Bill of Lading and not the goods per se. The goods are stored at Safmarine Containers Terminal. This was stated in the Respondent’s interim answering affidavit. This meant that when the undertaking was made the goods were already stored at Safmarine Containers Terminal. Therefore the Respondent did not dispose them.

13. I have satisfied myself that:

13.1 The Bill of Lading is a document referred to as “goods” in clause 38 of the Standard Trading Terms and Conditions.

13.2 The Respondent is entitled in terms of clause 38 to exercise a general lien over the Bill of Lading until the Applicant has discharged its debt.

13.3 That it is only the discharge of the debt that will entitle the Respondent to institute any claim it may have against the Applicant including a claim for any storage costs.

Consequently I make the following order:

The application is dismissed with costs.

_____

JUDGE MOKGOHLOA

COUNSEL

Counsel for the Applicant : Mr. Omar

Instructing Attorneys : Zehir Omar Attorneys

C/o Browne Brodie Attorneys

Counsel for the Respondent : R.G. Mossop

Instructing Attorneys : D.K. Singh, Vahed & Partners

Date of hearing : 20 February 2009

Date of Judgment : 19 May 2009

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