A bulk order of 25,000 metric tonnes of white refined sugar was destined to be onsold and delivered to the second respondent. It was agreed that the sugar contract would be delivered to first respondent [FR] in 50kg bags in the period October 2016 through to May 2017, at varying weights for a determined price inclusive of import duty*, ex warehouse to FR's warehouse distribution with insurance to be arranged by the buyer, governed and construed under and in accordance with the laws of the Republic of South Africa [sic]. When a dispute arose it was adjudicated in the Court a quo and dismissed without leave for appeal. The first appellant [FA] approached the High Court on motion to enforce FR to pay the purchase price in terms of the supply agreement, the approach to Court granted with leave to appeal

Whether 'ex warehouse' implied a contrary contract proximate to original contract

Law and Courts I

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During 5 August 2016 and 16 September 2016 import duty on sugar decreased and imposed a windfall on the seller with sweeping effects, aligned with s59 of the import duty Act where it was provided in the absence of an agreement to the contrary, a Seller may recover a portion of the purchase price. The reduction on the purchase price of the first consignment would have been R18million and on the overall purchase price an effective R51million. FR argued the supply contract did not include an agreement to the contrary therefore it was entitled to pay the reduced purchase prices, FA contended the term 'ex warehouse' was inclusive of agreement. The honourable Court discussed three matters - i) whether 'ex warehouse' excluded the operation of s59; ii) whether repudiation of the supply contract occurred due to FA; the issue of contractual privity between FA and second respondent [SR]. The learned Judges held at Common Law the risk and benefit passed at agreement to the purchaser, delivery notwithstanding, there was no suspensive condition and cited Glover^ where it was held perfekta was reached when two essential elements of the thing took place, the thing sold and price. Held further was the fact that risk included 'every disadvantage which overtakes a thing' and the honourable Court cited Voet^^. Risk in context also defined as the attachment of a legal burden to the thing after perfekta such as the imposition of excise duty payable, where the Court further cited Glover** where it was essayed the rule on benefit did not include fortuitous gains. The contract as per agreement was subject to South African law, therefore the obligation to pay import duty rested on FA and would not be transferred to SR, however the advantage or disadvantage cause by fluctuation in import duty would be passed on to SR in the manner provided for at s59 unless the parties agreed to the contrary. The parties were subject to implied law with regards fluctuations of import duty and cited were inter alia Alfred McAlpine^^. Further, the lack of proof that 'ex warehouse' meant anything other than 'from port to FA' entitled FR to a reduction in the purchase price. Regarding repudiation of the agreement it was discussed an obligation was not upheld according to contractual tenor and payment was due at delivery. It was established FR had repudiated the contract to which the Court discussed and cited Highveld 7 Properties^^ that spoke to the entitlement of FR to accept repudiation after a vigorous exchange of emails. Regarding contractual privity the FA indicated it held to a tripartite agreement separate from the original contract which left SR with the obligation to pay a non-reduced price. The honourable Court found the issue of tripartie agreement had not been raised in the founding statement nor was any time afforded in which to respond - therefore an additional contract had not even materialised.
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Vide Starways Trading v Pearl Island Trading (Pty) Ltd (232/2018)[2018] ZASCA 177; *s59 Customs and Excise Act 91 of 1964; ^Kerr's Law of Sale and Lease 4ed (2014) pp306, 310, G Glover and Mackeurtan's Sale of Goods in South Africa 5ed (1984) p180; ^^ - Voet commentary on the Pandects 18.6.1; Alfred McAlpine and Son (Pty) Ltd Transvaal Provincial Administration 1974 SA 506 A at 531E-H; Highveld 7 Properties and others v Bailes 1999 (4) SA 1307 (SCA) paras29-31.