Farm Ag Exports (Pty) Ltd v Larue (SCA 7 of 1994) [1994] SCCA 34 (6 December 1994)

/0 IN THE SEYCHELLES COURT OF APPEAL cc FARM AG EXPORTS (PTY) LTD •• •. APPELLANT cs, WALTER LARUE .. .. RESPONDENT C. A. No 7/94 (BEFORE: H. GCBURDHUN, P; E. O. AYOOLA, L. E. VENCHARD JJA) Mr. P. Boulle for the Appellant Mr. B. George for the Respondent JUDGMENT OF AYOOLA J. A. (Delivered on Day of -,1994) The appellant: was at all material times an exporter of goods from South Africa. Sometime in or about March 1985 it delivered to the Respondent by air freight certain goods to the value of South African Rand 5, 279.84. Alleging that it sold the goods to the respondent, the appellant commenced at the Supreme Court the proceedings from which this appeal arose claiminc the equivalent of South African Rands 5,279.84 which at the time wos 3 R 20577.00. Thc, respond n denied that the goods were sold to him. The nub of his )defence is that any goods imported were imported by the Larue glass Works (Proprietary) Limited and not by him. The g oods which consisted of fishing tackle and spares were airfreighted from Durban by British Airways flight — B A026/30 on 26th March 1985 and consisgned to the respondent under his personal name. The invoice was addressed to 4alter Larue, the respondent, and the Air ',Alaybill also showed him as consignee. On 5th July 1985 and 11th December 1985 the appellant made demands for payment from respondent in respect of the goods. However, by telex messages dated 11th and 16th September 1985 the appellant had also made demands on Larue Fibreglass in respect of the same consignment. Apart from documentary evidence, the appellant's witness gave evidence that all the documents and invoices were made to Mr. Walter Larue and "he was responsible for every- thing." Cross-examined, he said that his company had an order made by Mr. Larue in his name to the appellant. He admitted that it could be that the order was placed by the respondent's company. The respondent's testimony is that everything ordered was on the company's name as it was the company which had a licence to import. After a consideration of the evidence, oral and documentary, Perera J who heard the case found on the balance of probabilities, that the contract of sale was between Farm Ag Exports PTY Ltd. and Larue Glassworks Pty Ltd. He held that article 1588 of the Civil code of Seychelles relied on by the appellant was not applicable. He dismissed the appellant's action. On this appeal from that decision the appellant raised three grounds of ap p eal as follows: The learned trial judge erred in his interpretation of Article 1588 and in his finding that the said article did net ap p ly to the instant matter. The learned judge erred in his finding that the invoice and air waybills are self serving as regards the identity of the consignee . • 3/ H 3. The finding of the learned judge that the order is the most important document in the case is flawed, in that it rests the evidential burden of proof on the plaintiff in respect of an issue raised by the defendant." It is evident that Perera J did not regard the appellant's action as one based on any obligation arising from dispatch of unsolicited goods but as one of sale in the normal way. If he was right in this regard there is no doubt that in order to e succeed the appellant must prove an agreement whereby it bound itself to deliver and the respondent bound himself to pay for the goods. By the provisions of Article 1582 of the Civil Code sale is "an agreement whereby one party binds himself to deliver something and the other to pay for it." It is because the normal principle of offer and acceptance operates for an agreement to come into being that the order, which would in this case constitute the offer, becomes important. It is manifest that it is the person who makes an offer to buy which has been accepted by the seller to whom the offer was made that can be liable under the agreement so created. If the action was founded 1)pon an obligation which arose from an agreement, there cannot be any doubt but that it is for the appellant to prove that obligation, and, consequently, the agreement upon which it is founded. In this wise there was no misplacement of burden of proof when the learned judge acce p ted the submission of counsel for the respondent and held that the evidential burden shifted to the appellant who showkd produce a copy of the order. A person who demands the p erformance of an obligation shall be bound to prove it: Art 1315 of the Civil code. On the question whether the learned judge was wrong in holding that the invoice and air waybill are self serving as regards the identity of the consignee, I venture to think that what he meant would be clear when put in the context of the entire passage where he said: "Learned counsel for the plaintiff submitted that the evidential burden shifted to the defendant to produce copy of the order. I do not agree. The order is the most important document in the case as the dispute is whether the goods were ordered by the company as a legal person or by the defendant as a natural person. In this respect the invoice and the air waybill are self serving as regard the identity of the consignee." In this context, all that the learned judge can say and should be understood as saying, put simply, is that the insertion of the respondent's name as consignee on the invoice and air waybill by the appellant was not proof that 1-14,2, and not the company placed the order. The dispute is, of course, not as to the identity of the consignee but as to who requested for the goods. The erroneous 4f .e .-R-e-e to 'identity of the consignee' is however not a material flaw. cr)c. In the final analysis the real question in this appeal is whether, as formulated, this is a case to which Art 1588 (2) should apply. .rticle 1588 (2) provides that: "The dispatch of unsolicited goods shall not constitute a sale until• aoods are accepted. A person who receives such goods may give notice to the seller invitin g him to collect at his expense the same within four weeks. If the seller fails to do so, the goods shall be deemed to be a gift." These provisions were made with regard to the dispatch of unsolicited goods on the lines of the English Unsolicited Goods Act, 1971 (See Chloros: Codification in a mixed Jurisdiction p. 118). The (English) Unsolicited Goods and Services Act 1971 was enacted to modify common law rules relating to unsolicited goods, which as stated in Benjamin's Sale of Goods (2nd Edition) para 154 are as follows: ” ... a person to whom goods are sent with an express or implied offer to sell them may be deemed to have accepted such an offer and become the buyer by (for instance) using the goods, and perhaps by any conduct which makes it impossible to restore them in intitg rum to the seller. Acceptance cannot, however, be inferred from mere silence or inactivity." The main modification to the common law rules effected by the Act is by specg?fying that in certain circumstances a person who receives unsolicited goods may as between himself and the sender, use, deal with or dispose of them as if they were uncconditional gift to him, and any right of the sender in the goods is extinguished where the specified circumstances exists Mere use of or dealing with the goods sOch as makes it imposible to restore them in inteqrum to the sell .er would 111(,() not raise an inference of acceptances of an offer to sell the goods to him. It is possible to comprehend Art 1588 (2) as combining both the common law rule and the modification made by the Act in a single concise provision. Thus a sale of unsolicited goods may arise under art 1588 (2) where the person who received the goods have accepted them. Acceptance of the goods may be expressly made or may be by conduct at common law. So also under the Civil C ode mere silence or inactivity would not constitute an acceptance. Article 1109 — 3 of the Civil q Code provides that: "Silence shall not be presumed to imply acceptance unless this is a necessary implication from the previous business relation of the parties or from the practice of particular trade." The position, as I see it, is that where unsolicited goods have been dispatched to a person in circumstances that an offer to sell them is intended and he accepted them, a sale would arise. Until he has accepted them the dispatch and receipt of the goods would not by themselves constitute a sale. He could accept them expressly or by conduct, but mere silence or inactivity world not constitute an acceptance. After the person has given such notice as is stipulated in Art 1588 (2) inviting the seller to collect the goods at his ex p anse within four we eks and the seller has failed to do so, the goods shall be deemed to be a gift and the person to whom they have been dispatched can use or deal with them without such leading to any inference that he has accepted the goods, Certain aspects of. Art 1588 (2) become problematic because of the terseness of its terms. Thus, for instance, it was not specified within what period from the recei p t of the goods the recipient should give notice to the seller nor, was it clear what the intention of the person who dispatched them must have been in order for the dispatch to amount to an offer to sell. These problems are however not relevant in this case. A careful reading of Art 1588 (2) shows - that a party who claimSthat a sale of unsolicited goods has arisen from the dispatch of such goods by him to the defendant must aver by his pleading and prove:0)that he has dispatched the goods to the defendant; (2) that the goods were unsolicited; (3) that the defendant had accepted the goods, and (4) where the acceptance is by conduct, the conduct which amounted to an acceptance. Where the defendant has dealt with the goods in such a manner as would have amounted to an acceptance of the goods, it is open to him, as a matter of defence, to plead that he has given the notice specified in Article 1588(2) to the plaintiff and that the plaintiff had failed to collect the goods within four weeks. To my mind, the two misconections which seemed to underly the appellant's contention at the Supreme Court and cn this appeal are, first, in not realising that a mere averment that there has been a sale without much more is not sufficient averment of a sale of unsolicited goods; and secondly in not distinguishing, as Perera J rightly did, between acceptance and receipt of the goods. Merely to take delivery of goods will not amount to acceptance. It is evident that as, the averments the plaintstood this could not be regarded as a case based on sale of unsolicited goods. chat the appellant had set out to prove was a sale arising from an order placed by the respondent for the 000ds and a delivery of the goods pursuant to that order. Perera J found as a fact that the appellant had failed to prove any request (order) by the respondent. On this appeal no serious attack has been mounted against that finding which, on the evidence, was open to him . to make. . • •/8 If this was intended to be a case of sale of unsolicited goods the averment on the plaint had been grossly inadequate and the evidence led in the case had been insufficient to sustain such a case. Before I part with this appeal, I do observe that the case both at the trial and on this appeal had been presented and argued on an assumption that the same principles apply to overseas sale as to domestic sales. The transaction he ice was one of overseas sale. There are obvious difficul;es in attempting to apply the provisionswhich relate to sale of unsolicited goods to overseas sales which are usually subject to special regulations both as to exportation and importation and which may be subject to export and import licences and controls and regulations arising from foreign exchange require- ment. I refrain from making any pronouncement on the applicability of Article 1588 (2) to overseas sales. It suffices to determine the appeal on the issues which have been argued before us. For the reasons which I have given, I am of the opinion that this appeal must fail. I would dismiss it accordingly. rc.,/,;.pc.ciQA-k— • 1,3 e H {7 et C v tjAIL Ck_ W-t-t • It B. O. O. AYOCLA Justice of Appeal In Tnt, 3,2 elies uourt oi Appeal Farm A G Exports (Pty) Ltd Appellant Walter Larue Respondn-:. nr P for he appellant B Georges for the responde'nt j UGO2PI of GoL;.i.rdnun P --------- In a plaint enter-ed before the Suprefoe it claied froul the respondent 17,279.84 South Afrivaf .: Rands for goods sold and delivered to the resp--:ent. Thc , respondent dnied beinc indebted to - Lhe appellant on t that he never contracted to buy the goods. He alleded that it was t ' he cobany Larue Wfli-1:.s Ltd which ifilpc)red tne dbods. Ev-idence and th,, 1 ,2arnfid judd.2 contract of sale f:.!aL between - .7, Ltd a7:d hot between c.-,ho ..71pDr-211,-Ant acc p r07, n,-J disvi.sed thD j,J. Jgf.ilent of. th2 judc.: is 132if,:; 21-11L, g2d th2 J_lowing grounds;:- ., :s arned trii .:=cd in hs i ntertfof: of fit--;ciihQ that artif1.2 - .7,t apply 17,D tht,.: , •• -2-- 2. The learned judgo erred in his fihdino that the invoice and airway bills are self serving renards of the consignee. 3: The finding of the learned judge that the order is thL- ffiost iiftportat document in the case is flawed, in that it rests the evidential burden of proof on the P laintiff in .-e-,:p,ct of a issue raised by the Defendant. Exfacie the pleadings the only issue before the court was whether the respondent ordered tho goods from the appellant. It was aditted that the invoice of the o p od ￿ was in th name of of the respondent, the respondent took delivery of the goods at the airport and the 1.:1-, i,ndent was a director and shareholder of the Larue Glass Works (Proprielory) Ltd. These ￿ acts do nut estabIish that it wa ￿ rcspo"uant who ordered the 000ds. I have refrained from considering ground 1 ul the appeal it was not averred in the plaint that the c:3-7;2 of the appellant was one of unsolicited Q0DdS., In ] ,:fy view the learned judge ca g-i2 to dismissing the ciaiffl. I wou. TH a.-.:peaa with costs. Dated 42,4 H 17M 62e-e:6,6c%,- /77(7