IN THE HIGH COURT OF LESOTHO
In the matter between:
LETSOSA HANYANE - PLAINTIFF
TOTAL (LESOTHO) (PTY) LTD - DEFENDANT
Delivered by the Hon ML Lehohla, C.J. on the 17th day of June, 2003
In terms of a summons sued out of the office of this Court's Registrar around 23rd June, 1998, the plaintiff has laid a claim against the defendant as follows:-
[Payment of] M946,649.24;
Interest at the rate of 18.5% per annum from 29th September 1997 to date of payment;
Costs of suit;
Further and / or alternative relief.
By nature the claim is for liquidated damages arising from an oral contract between the parties in terms of which the defendant sold petroleum fuel to the plaintiff who would sell it on retail to customers at plaintiff's filling station known as High School Motors situated near Lesotho High School.
The amount of the claim for damages namely M946,649-24 is based on the loss of business allegedly suffered by the plaintiff as a result of unlawful actions perpetrated by the defendant by locking up the plaintiff's fuel pumping machines at the plaintiff's filling station. The machines consist of a total of 5 pumping machines. (See paragraph
4 of one Thomas Van Straaten DWl's affidavit in CIV/APN/412/97).
It seems to be common cause that the petrol machine (otherwise referred to as a bowser) has two hoses. But the diesel bowser has only one hose. The paraffin machine had two pumps with one hose each. However DW1 is
not very certain of this as he seems to think it is a single pump. (See page 34 of the Court's hand written notes of the record).
It is common cause that from September or October 1996 the Defendant was the sole fuel supplier to the plaintiff.
It is also common cause that the plaintiff through his High School Motors filling station sold fuel as a retailer for his own account be it at a profit or loss.
It is not in dispute that the equipment at the filling station belonged to the defendant. Further that it comprised fuel tanks, pumping machines and hoses.
It is not in dispute that the Lesotho Government exclusively regulated and prescribed retail prices for the sale of fuel and had in place a substantive Statute and Regulations for the purpose. (See The Fuel and Services Control Act NO.23 of 1983 at section 3(1) (c).). Needless to say a prohibition is an essential element of section 17(2) of this Act in terms whereof it is stated that selling fuel at a price in excess of the price prescribed by Government is
an offence. Section 3(1) prescribes times during which the sale is to take place.
It is common cause that as of 29th September, 1997 Government had prescribed fuel retail prices to be M2.08 per litre for petrol and M2.03 per litre for diesel. See Government Gazette NO. 154 of 1996.
It is not in dispute that during the period around 29th September, 1997, the plaintiff was retailing fuel at his garage not in excess of, but definitely below the prices prescribed by Government in respect of petrol and diesel.
The plaintiff alleges and the defendant does not deny both in pleadings and evidence that on 29th September, 1997 the latter unilaterally closed down the plaintiff's filling station by locking up the fuel dispensing machines.
It was in consequence of this unacceptable resort to self-help that on 5th November, 1997 the plaintiff sought and obtained the High Court's intervention forbidding the defendant's high-handed act as clearly shown
and disapproved in terms of a judgement following the application by the plaintiff in CIV/APN/412/97.
The result was that the court ordered the defendant who was respondent in the application to re-open the fuel pumping machines in order to enable the plaintiff to enjoy doing his business peaceably once more without hindrance or interference. This in a sense gave ditto to the view that in fact the plaintiff had neither been in breach of the relevant Statute i.e. Act No.23 of 1983 plus Regulations flowing from it. Nor was he in breach of any agreement with the Defendant. Compare and contrast this view with a hypothetical situation where the plaintiff were to approach the Court against the defendant requesting the Court to enforce an unlawful act or an illegal contract such coming to the plaintiff's aid because he was cheated at playing the illegal game of dice with the defendant or cheated out of illicit sale of dagga with that party!!
It is also common cause that following the decision of the court in CIV/APN/412/97 the plaintiff instituted the instant action for damages.
It is important to note that the plaintiff's story appears to be founded on firm and therefore dependable ground that the delay involved in his attempt to seek rescue from the court was occasioned by the defendant's vigorous opposition and resistance to the relief the plaintiff sought.
It is also agreed by both Parties that the plaintiff's filling station was gutted and destroyed by fire during the unfortunate riots that erupted in September 1998 and resulted in general looting and plundering of property in this kingdom. For these actions the defendant bears no responsibility.
In terms of the heads of argument submitted on behalf of the defendant Mr Loubser indicates that the defendant denies contents of paragraph 7 of the plaintiff's declaration which is to the following effect:
" When the plaintiff enquired from the defendant as to the cause of its actions, he was advised that the defendant was dissatisfied with the retail price per litre at plaintiff's place of business. The defendant was of the view that the plaintiff ought to charge the maximum retail price per litre permissible by law. The defendant's attitude surprised the plaintiff as the price of petrol and diesel as fixed by the plaintiff did not affect the
defendant nor its products. On account of the defendant's aforesaid unlawful actions the plaintiff suffered loss of business in the sum of M946,649-24 to date. The amount of damages suffered increases at the rate of M3879.71 per day until such time that the defendant will have unlocked the pumping machines"
In response to the above the defendant AD PARA 7 page 15 paragraph 5 states:
"5.1 The contents hereof are denied
5.2 At all material times hereto, the plaintiff advised the defendant that should the defendant not be prepared to allow the plaintiff to sell petrol at the reduced price, the plaintiff would obtain supplies of fuel products from another supplier selling a different brand.
5.3 The defendant furthermore pleads that to date hereof the plaintiff has failed and/or refuse (sic) to increase the retail prices as aforementioned, and as a result whereof, the defendant pleads that it is entitled to prevent all further sales of fuel products at the reduced price".
Considering this response which in effect appears to question the restoration to plaintiff his disrupted right to sell at the price disapproved by the defendant, one wonders why the defendant did not appeal against the court order that seemed to ordain the practice followed by plaintiff selling fuel at reduced prices.
However one is quickly disabused of any anxiety that necessarily must accompany the attempt to pursue this matter from the point of view implied by the defendant's denials referred to above. The relief from anxiety is afforded handsomely by Mr Loubser's submission in head 3 of his written heads of argument that:
" It is conceded that the defendant is liable for any damages the plaintiff might have suffered as a result of the locking-up of the machines by the defendant".
There can be no argument then that the plaintiff bears the onus of proving his damages, or the amount of loss of business suffered as neatly stated in Southern Sun Hotel Corporation (Pty) Ltd Vs G&W Leases
CC (1999) 1 All SA. 497 AD. The words of Zulman JA at page 501 letter (h) in this judgment are worth reproduction as follows:
"I am accordingly of the view that the court aquo erred when it accepted that the respondent established, even prima facie, that the appellant's breach of its undertaking caused a loss of R550 000.00 to the respondent".
I accept Mr Loubser's submission based on Hushon SA (PTY) LTD Vs Pictech (pty) LTD 1997 SA 399 (SCA) that if there is any difficulty in quantifying the loss, the court is to do its best on the material before it. It seems to be common cause that the dispute revolves around two aspects, namely (i) quantum and (ii) whether or not the defendant ever re-opened the fuel pumping machines.
Before dealing further with the law it would be fruitful to give a brief summary of the parties' respective contentions. 1 should indicate that each party adduced evidence by one witness per side namely, the plaintiff himself for his part and for the other Thomas Van Straaten who had, before retirement early this year, been the defendant's marketing manager.
The plaintiff's case is based on the fact that relying on calculations based on the daily consumption by his customers for eleven days reckoned from 29th September to 9th October 1997, of petrol at the rate of 23000 litres at M2.00 per litre and half this quantity per day of diesel at M2.00 per litre including paraffin whose retail price was not controlled he would make a projected amount claimed in the summons for the period spanning the dates 29th September 1997 when his business was unlawfully closed by the defendant and September 1998 when the business was destroyed by fire caused by incidents related to the 1998 political turmoil in Lesotho.
The defendant on the other hand states that it cannot be held liable for damages incurred over a period exceeding the days spanning September 29th 1997 when the defendant closed the plaintiff's business and October 9th 1997 when the defendant opened or tried to open some of the fuel pumps only to find that the locks had been changed thus he failed in respect of those which the locks had been changed.
I may just indicate that the defendant seems unbridled in its fervent belief that the plaintiff's failure to operate his business fully is borne out by the fact that he was only told early 1998 that one pump had been opened by
the defendant. The defendant banking on this self-delusion is quick to say that this explains why his attorneys filed an application for the pumps to be opened up again in November 1997 for during all the period till early 1998 the plaintiff's whereabouts were not known. In my view this contention is dealt a fatal blow by the fact that the affidavit by the applicant filed in support of the plaintiff's case for re-opening of his business shows that he was in Maseru Lesotho on 18th October 1997 when he deposed to that affidavit.
Going back to Hushon above especially the majority decision by Schutz JA, who provided solution to the problem by laying an indispensable yardstick in matters of this nature by saying at pg 417 F that:
"----------. My informed guess as to the damage suffered is R250 000.00"; I
should hasten to quote in extenso the summary of the learned Nienaber JA 's dictum at pg 400 as I feel it provides useful material background against which to properly consider the instant case. Accordingly this head-note which is on all fours with the matter at hand reads from letter B to C:
"Held, that the respondents had been directly involved in the plot to assassinate the appellant commercially and accordingly were jointly and severally liable for any loss suffered by the appellant which was attributable to the conspiracy.
Held, further, on the facts, that whichever way the appellant could have turned to prove the exact extent of its loss, it would have faced grave difficulties, partly because if the problem of determining the adverse repercussions which the respondents' unlawful methods had had on the volume of its trade and partly because of the quandary of devising an appropriate method of quantification; there was no doubt, however, that the appellant had suffered loss as a result of the defendant's wrongful conduct, and in those circumstances a court had no option but to resort to the rough and ready method of the proverbial educated guess and to do the best it could on such material as was placed before it". (Emphasis supplied by me)
The facts of the above case are more or less a replica of what obtains in the instant case. The grave difficulties mentioned in Hushon are not minimised in the instant case where the records the plaintiff sought to rely
on in support of his case were burnt in the riots. The delay before the plaintiff could get the remedy he sought in order to be able to trade was not the Court's fault but as credible evidence indicated resulted from the defendant's protracted opposition. Indeed the very high-handed manner in which the plaintiff's business was closed was occasioned not by the plaintiff's conduct but according to DW1 this was precipitated by a third party, namely other competitors in the industry who felt undermined by the plaintiff's manner of conducting his business which, as has been conceded by DW1, was not unlawful. If there was any illegality in it the Government was sufficiently equipped to deal with it. Not the defendant nor the industry for that matter.
Of importance in the overview I hold of the entire matter is in line with the view expressed by Nienaber JA at Pages 407 - J to 408-B to the following effect in denouncing the trial Court's approach " The trial Court had held that in law a prima facie inference operated in favour of the plaintiff that he would himself have effected all the infringing sales but for the defendant's infringement. Trollip JA, however stated at 472 D-E:
With respect I think that that approach was erroneous, for in our law no such rule is applicable in the present situation. At the end of the day when, as happened here, both parties have adduced all their evidence and have closed their respective cases on the plaintiff's claim for the loss of his profits, there is ordinarily no room for any such prima facie inference. The true and only enquiry then is, has the plaintiff, on whom the onus of proving such loss rests, discharged that onus on a balance of probabilities'. (Emphasis mine)
In line with that approach the enquiry in this matter must likewise be narrowed to an assessment of the probabilities". I agree entirely with this approach.
I should however hasten to indicate that having considered all the evidence I couldn't help feeling that there was on the part of the plaintiff an attempt to maximise his claim for damages while on the defendant's part the attempt was to minimise such damages as much as possible. In this sort of scenario it is important to appreciate the significance of the need to approach the matter largely basing oneself on informed or educated guess as to where the truth might lie. Very commonly it lies somewhere between the
two extreme positions. On the one hand the plaintiff claims upwards of M900 000.00
while the defendant on the other hand waters down the claim to no more than M568-82 against it basing itself on the loss the plaintiff would have experienced in 11 days of closure of his business.
The arithmetic employed by either side seems to be accurate and accords with its line of approach. The only problem is with regard to the length of time the projected loss is supposed to extend. The plaintiff projects it to a period of 12 months while the defendant, as shown above, confines it to 11 days only.
It is also important to recall that in argument the defence Counsel prayed that the plaintiff be awarded the M568-82 appearing on the last page of his heads of arguments or grant the defendant an absolution from the instance.
Although supplying me with no immediate authority Mr Ntlhoki rightly demurred at this suggestion on the principle that an alternative of an absolution cannot go hand in hand with an award of damages because the two are premised on contradictory bases. An award of damages follows
proof of the case by the successful plaintiff while an absolution may be granted where it seems prima facie the plaintiff might have a case which he, however, is unable to prove. Thus quantum may not be a substitute for an absolution from the instance or vice versa.
I am fortified in the view I take by the opening remarks by Nienabar JA at page 401 - C where the learned judge says " The only issue remaining is whether the appellant succeeded in proving a loss and the extent thereof. The court a quo (Levy AJ sitting in the Witwatersrand Local Division) found against the appellant and ordered absolution from the instance with costs".
It would seem plain therefore that on the basis of the result reached in Hushon above taken along with the opening remarks referred to loc.cit Mr Loubser's plea which runs counter to the trend just shown cannot be entertained.
Having indicated earlier the relative positions adopted by the respective parties on the opposite sides of the spectrum, and having found wisdom in the approach of educated guess advocated in Hushon above I
would not be far from right in the view I take that if the plaintiff continued operating at below the margin its competitors were selling at, then much sooner than later he would have succeeded in trading himself out of business, alternatively his competitors sooner or later having smelled blood like blood hounds would easily trade at reduced prices like he has been doing, and; taking into account their numbers and the cut-throat competition that is not an unknown phenomenon in the world of trade, the plaintiff would not surprisingly find himself in competition with Engen, Total, Shell, BP, Caltex etc. In the result the market would stabilise with each company receiving a pro rata share of the returns without anyone of them gaining any special favour by customers consuming the petroleum products and commodities. My educated guess is that in either situation the plaintiff's "Indian summer" of success would not prevail beyond three months.
If I am correct in this approach it would seem that he would have made barely a quarter of his claim during those 3 months constituting part of the year during which his claim is based. This indeed is a generous view considered in his favour. But if one takes into account the rush by no less 4 other competitors doing petroleum trade in Lesotho apart from the plaintiff himself a pro rata figure likely to have been shared among all the
competitors would easily come to less than a fifth for a period of less than a quarter of a year.
Because as Schutz JA was prepared to take a more liberal view of the positions considered above in awarding damages to the plaintiff it seems prudent for me to do the same. Therefore that is precisely what I propose to do.
Consequently the amount claimed would in my view be reasonable as an award for damages if it were divided by four.
In the result the plaintiff succeeds and by order of this court is awarded against the defendant:
Payment of M236,662.31
Interest at the rate of 18.5% per annum from 29th September 1997 to date of payment; plus
Costs of suit.
For Plaintiff: Mr Ntlhoki 17 June 2003
Defendant : Mr Loubser