THE HIGH COURT OF SWAZILAND
CASE NO. 1022/93
the matter between
SWAZILAND LTD Plaintiff
CONSTRUCTION LIMITED t/a INYATSI
THE PLAINTIFF: MR. WISE
THE DEFENDANT: MR. SAPIRE
summons issued on the 6th November 1990 and subsequently amended on
the 8th September 1993 the plaintiff seeks judgment against the
of the sum of E114 771.79;
on the said sum of E114,771.79 at the rate of 9% p.a. calculated from
the date of summons to date of payment;
of the sum of E493,140.00;
on the said sum of E493,140.00 at the rate of 9% p.a. calculated from
the date of judgment to the date of payment
Costs of suit.
the commencement of the trial, the parties indicated that a
settlement had been reached in respect of claim no. 1 and the
interest claimed thereon and that the trial would proceed on the
is common cause that the defendant is involved in road construction
and that it had been awarded the tender for the construction of the
Mafutseni/Mliba main road. The plaintiff company is engaged in road
transportation and operates a fleet of trucks from its base at
plaintiff's particulars of claim may be summarised as
follows.Following informal discussions between representatives
of the parties and the ascertainment by the plaintiff of some of the
defendant's requirements as to crushed stone and crusher run (a
mixture of crushed stone and crusher dust) for the construction of
the Mafutseni/Mliba road, the plaintiff wrote to the defendant on the
11th July 1989 and tendered for the transportation of crushed stone
from the Keir and Cawder Quarry to the defendant. The plaintiff's
letter was in the following terms-
a result of recent discussions with your goodselves, we hereby tender
proposed rates for transportation of crushed stone, together with
base statistics and various conditions we would like included in this
volumes will approximate 80,000 cubic metres. Payloads are based on
17,5 cubic metres, assuming the average S.G. to be 1.5
will be delivered at points of reasonably regular intervals, along
the entire course of the road.
of conveyance will approximate nine months, commencing in July,1989.
and offloading will be made possible on a 24 hours basis, 6 days per
week, with adequate lighting provided to facilitate the loading
operation and in the case of concrete stone, also the offloading
operation. Sunday work will be done as and when required, subject to
surfaces and offloading points are to be acceptable to Unitrans
staff, for safe conveyance and discharge of all materials.
will be reasonably even over the period with an average daily
delivery of 340 cubic metres. In the event of any planned major
deviation from the normal delivery pattern, Unitrans would expect 24
hours notice of this change in order to adjust its own operating
rates in the attached table are firm till 1st January 1990, other
than statutory costs such as fuel and licence fees, which we would
need to recover as and when these increases happen.
traditionally reviews annual rate escalations in January of each year
and deem it fair in this agreement, to base this increase on the six
month differential in indices of SEIFSA Table L. (i.e. June 1989 and
with supporting schedules of deliveries will be made at the end of
each month, and we would expect payment for same by the 25th Day of
the following month.
defendant replied to this letter, through its Project Manager Mr
McEwan on the 18th July 1989 in the following terms-
letter dated 11th July refers, and we comment as follows:
volumes are 80,000m3 . We suggest load lines be painted in the trucks
for the various commodities. i.e. One for crusher run 17,5m3 and
another for concrete stone at 15m3 .
of crusher run will be along the whole
of the road. Concrete stone and drain filter material will be at
various point along the road.
of conveyance will probably be delayed slightly for crusher run but
will not extend beyond the month, based on 9 months from July 1989.
and off-loading of crusher run only is envisaged on a 24 hours basis.
Concrete stone and drain filter material will only be done during the
for crusher run will be roled cement stabilised sub-base. Concrete
stone will generally be on formation of earthworks.
will be as you anticipate.
table of rates are acceptable. We did however discuss fixed rates for
the period of delivery and we assume this is agreeable.
assumming we can expect a 2%% settlement, as our payment cycle from
the client is 45 days from certification by the Engineer.
general conditions of cartage are noted. We
that Emalangeni can be substituted for Rands.
any of our plant stand due to delays in deliveries, such standing
time costs shall be for your account.
response, the plaintiff addressed the following letter to the
defendant on the 17th August 1989:-
reply to your letter of 18th July 1989 and subsquent discussions, we
comment as follows:-
a result of the delay In the original time span of the project,
together with your wish to have fixed rates for the period, we offer
the following compromise.
rates revert to the original rate indications given to you, with a
midpoint rate of E14.19 per cubic metre on a lead distance of 46
kilometres. A schedule of revised rates Is attached. These rates will
hold until 31st March 1990, when they will be subject to review.
Unitrans however, must retain the right to recover all statutory cost
increases as and when they occur . It should be noted that fuel
represents 23,5% of our costs currently.
are prepared to accept payment within 45 days from date of monthly
regard to standing time charges caused by delivery delays, we point
out that causes may be beyond our control, for example - breakdown of
loading equipment or impassibility of roads through whatever causes.
We believe that regular communication between the two parties will
prevent either party having to resort to this type of action. It is
pointed out that replacement vehicles can be summonsed from other
operations subject to reasonable notice.
defendant replied to this letter on the 17th August 1989 stating:
accept conditions of latest offer subject to restriction of statutory
costs to fuel, as discussed.
plaintiff contends that the aforesaid correspondence together with
the earlier discussions between representatives of the parties
and certain arrangements regarding the method of measuring the
crushed stone and crusher run (paragraph 5 and 6 of the particulars)
concluded a contract between the parties. The plaintiff sets out the
terms and conditions of the contract as follows-
plaintiff was entitled and obliged to transport the Defendant's
entire requirements of crusher run and concrete stone (estimated by
the Plaintiff at 70,000m3 and 10,000m3 respectively) from Kwalini
Quarry to various points on the road between Mafutseni and Mliba,
road was to be constructed by the defendant;
Defendant represented to the Plaintiff that the specific gravity of
the crusher run was 1,5 (one comma five) which representation was
material and was accepted and relied upon by the Plaintiff as
correct; accordingly that representation became a term or warranty of
Each load of crusher run to be carried by the plaintiff was to be
17.5m3 (SEVEN AND HALF CUBIC METRES)
load of concrete stone to be carried by the Plaintiff was to be 15m3
(FIFTEEN CUBIC METRES)
bucket loads of the front end loader used by Keir and Cawder at the
Kwalini Quarry would be deemed to equal 17.53 (SEVENTEEN AND A HALF
METRES) of crusher run and five bucket loads of the said front end
loader would be deemed to equal 15m3 (FIFTEEN CUBIC METRES) of the
responsibility for providing the stone and laoding it onto the
Plaintiff's vehicles was to be that of Keir and Cawder, the
proprietors of Kwalini Quarry.
and Cawder and their employees were the agents of the Defendant and
were not the agents of the Plaintiff.
Plaintiff was to off-load the crusher run and the concrete stone, as
the case may be, at such places along the route of the said road as,
from time to time, would be pointed out by employees of the
delivery of crusher run and concrete stone was to be carried out by
the Plaintiff in accordance with such timetable as might be
prescribed by the Defendant from time to time.
defendant undertook to pay to the plaintiff in accordance with the
rate set out in the schedule that is annexure "C2" hereto.
Defendant undertook to effect payment
forty five (45) days of the date of each monthly statement remitted
to it by the Plaintiff.
In the event of there being any statutory increases in the price of
the fuel during the period of the contract the rates aforesaid
payable by the Defendant were to be increased appropriately to take
into account the said statutory increase in the price of fuel, such
increase to take effect from the date of the statutory increase in
the price of fuel .
The Plaintiff had the right with effect from the end of March 199 to
increase the rates payable by the Defendant for conveyance and
transportation of the said crusher run and concrete stone in
accordance with the SEIFSA index (Table L) for the six month period
June 1989 to December 1989.
plaintiff avers that it performed its obligations under the contract
and that on the 9th May 1990 it addressed a letter to the defendant
advising the defendant that-
had been a statutory increase in the price of fuel with effect from
the 1st march
application of the relevant SEIFSA index
L) resulted in an increase in the rates payable by the defendant.
plaintiff sets out that the letter of the 9th May set out the revised
schedule of rates payable by the defendant pursuant to the contracts.
The plaintiff avers that on the 15th June 1990 the defendant
wrongfully and unlawfully repudiated the agreement. The defendant's
letter of the 15th June reads as follows:
reference to your letter of the 9th May 1990, we regret to inform you
that we are unable to accept your price increase with regard to the
transportation of crushed stone form the Nkwalini Quarry to our site.
we regard our transportation arrangement with you to be terminated
and thank you for your past support.
is alleged that in consequence of the defendant's breach of the
contract the plaintiff has suffered damages in the sum of
defendant admits the correspondence (set out earlier in this
Judgement) that passed between the parties and the various
discussions between the parties but denies that " the exposition
and interpretation of the agreement set out by the plaintiff is
accurate or in accordance" with the terms contained in the
relevant correspondence. The
admits terminating the agreement but states that it was justified in
so doing as-
plaintiff had peristently failed to maintain deliveries in accordance
with its obligations in terms of the agreement; and
defendant was entitled to refuse to accept the increased charges
which the plaintiff intimated it intended to levy.
first matter that has to be decided is as to the nature of the
contract between the parties. Two issues arise under this namely, the
duration of the contract and the rates to be paid by the defendant.
witnesses gave evidence on behalf of the plaintiff, regarding the
circumstances leading to the conclusion of the contract. These were
Eugene Rochat and Michael Shaw who were, at the relevant time,
employed by the plaintiff as Operations Manager and Marketing Manager
respectively. Malcom Bulmer who was employed by the defendant as a
Senior Quantity Surveyor gave evidence on behalf of the defendant. In
so far as the duration of the contract was concerned it is quite
clear from the evidence of these three witnesses that the contract
was for a period of approximately 9 months. Evidence was given of
informal discussions between the three witnesses on behalf of the
parties on the question of the defendant's requirements for the road
construction. The 9 month period was based on the volume of
and crusher run required by the defendant. Reference was made in the
course of the evidence to monthly reports that were prepared and
maintained by the plaintiff during the relevant period in which the
contract was described as a 9 months contract. The contract was,
according to the evidence, to have commenced in July 1989 but only
commenced towards the end of August following the acceptance by the
defendant of the terms set out in the plaintiff's letter of the 17th
August 1989. The 9 month period would in the circumstances have
expired towards the end of May 1990.
differences arise in the evidence of the three witnesses with regard
to the question of the rates to be paid by the defendant under the
contract. The correspondence dealing with the question of the rates
has been set out earlier in this judgement. The position of the
defendant is that the agreement between the parties was that the
defendant would pay fixed rates for deliveries for the duration of
the contract. The plaintiff contends that the rates were subject to
review in the course of the contract.
evidence given by the three witnesses with regard to the rates was
fairly lengthy and the witnesses were each subjected to close and
careful cross-examination. Their evidence must at the end of the day,
however, be considered in the light of the effect of the terms
contained in the correspondence between the parties. If a clear
agreement between the parties is evident from the correspondence,
such agreement must be given effect. What does the correspondence
contain in so far as the question of the rates is concerned?
the letter of the 11th July 1989 the plaintiff stated under paragraph
7 that "Unitrans traditionally reviews annual rate escalations
in January of each year and deem it fair in this agreement, to base
this increase on the six month differential in indices for SEIFSA
Table L (i.e. June 1989 and December 1989)."
defendant's reply of the 18th July 1989 was that the " attached
table of rates are acceptable. We did however discuss fixed rates for
the period of delivery and we assume this is agreeable".
plaintiff's letter of the 11th July, it will be noted, was in the
form of a tender based on the informal discussions that had taken
place between the representatives of the parties. The plaintiff's
letter of the 17th August contains the following:
As a result of the delay in the original time span of the project,
together with your wish to have fixed rates for the period, we offer
the following compromise. Our rates revert to the original rate
indications given to you, with a midpoint rate of E14.19 per cubic
metre on a lead distance of 46 kilometres. A schedule of revised
rates is attached. These rates will hold until 31st march 1990, when
they will be subject to review. Unitrans however, must retain the
right to recover all statutory cost increases as and when they
offer was accepted by the defendant subject to the
of the statutory costs referred to, to fuel only (defendant's letter
of the 17th August 1989).
position as at the 23rd August 1989 was, in the circumstances, that
the parties had agreed on fixed rates to be paid up to the 31st march
1990, when such rates would " be subject to review." The
manner in which the review would be carried out was not set out in
the correspondence between the parties. No formula or method by which
the plaintiff could seek an increase in the rates after the 31st
March 1990, was in place as at the 23rd August 1989. It is common
cause that the plaintiff did not seek to review the rates on the 31st
March. Notification of the unilateral review of the rates by the
plaintiff was made on the 9th May 1990. The plaintiff's notice
concluded with the following
We propose that these rates be applicable from 1st May 1990 but wish
to review same again at 30th September 1990, based on the six month
movement of SEIFSA Index from December 1989 to June 1990.
trust the above is acceptable to you and we look forward to your
tone of this notice is in keeping with an understanding that whatever
review had to undertaken after the 31st March 1990 would have to be
agreed upon by the parties. The notice does not in anyway serve as
evidence of the exercise by the plaintiff of any right conferred on
the plaintiff under the contract to unilaterally alter the rates.
it turned out the plaintiff's proposal was not accepted by the
defendant (defendant's letter of 15th June 1990).
correspondence I have referred to clearly sets out the terms of the
agreement between the parties. There is, in the circumstances, no
need for a consideration of the evidence of the three witnesses I
have referred to except to state that the evidence of the defendant's
witness (Bulmer) is in keeping with what the correspondence contains.
The issue of the review of the rates at the 31st march is a matter
which was to be agreed upon by the parties. The parties failed to
reach any agreement. The defence that the defendant was not obliged
to accept the increased rates proposed by the plaintiff must be
plaintiff's claim is in the circumstances dismissed with costs. It is
ordered in terms of Rule 68(2) that the taxing matter is not to be
bound by the amounts set out under section H of the tariff of costs