Get High (Pty) Ltd and another vs Steve Garrard and others (CC 8.2012) [2013] SCSC 87 (18 November 2013);

 

Judgment

Egonda-Ntende CJ

  • The first plaintiff, Get High (Pty) Ltd, ceased trading and is being wound up.  A dispute arose between the two shareholders Mr Westergreen and Ms Savy (and Ms Savy’s husband, Mr Garrad) about the financial management of the company and the distribution of its assets.  That dispute was settled in a judgment by consent filed on 19 September 2013.  The only remaining issue is the counterclaim filed by the third defendant, Mr Uzice.  Mr Uzice was an employee of the company who eventually purchased its major asset, a cherry picker truck.  He claims that he never received the professional equipment that was sold to him with the truck and that this has caused him loss of profits and associated hardship.
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  • When the shareholders of the company were describing their proposed settlement to the Court, Mr Rouillon, counsel for Mr Uzice, intervened to seek an agreed amount of compensation for Mr Uzice as the real “victim” of the dispute.  Mr Elizabeth, counsel for the company and Mr Westergreen, expressed surprise at this intervention, suggesting that Mr Rouillon had previously indicated that receiving the equipment would suffice to bring the matter to an end.  In any event, the position of the company was that Mr Uzice was not entitled to any compensation.  Mr Elizabeth’s instructions were that Mr Uzice had already received compensation in the form of a Rs 80,000 client cheque that was given to him personally.  Mr Elizabeth further stated that:

[O]riginally the price of the asset was 1.4 million, he got a discount of 200,000 already on the original price which was 1.4 million.  He got a discount of 200,000 and he has being using the truck, he has been working with that truck your Lordship, I have seen the truck working on the road and it is not true that he has not been able to work.  He has been working, now there is a competitor in the field business that he is doing and that is why he is probably some kind of financial problem with the bank but not because of the case because he has been working for three years and he never made a claim for the equipment not even a letter to claim the equipment because he was happy using the truck and earning money.

  • Mr Rouillon’s response was to urge “an offer of some form – small monetory compensation so we can finish this”.  That offer was not forthcoming and the settlement ultimately reached did not extend to Mr Uzice. 

Case for the counterclaimant

  • Mr Uzice alleges, and it is now common ground, that it was an express term of the sale agreement that “the motor vehicle purchase would include accompanying essential equipment and accessories valued at R390,100”.  The counterclaim states that Mr Uzice no longer wishes to receive the equipment itself.  However, after the other parties had settled their dispute, Mr Elizabeth and Mr Rouillon were able to agree to the immediate delivery of that equipment.  In those circumstances the only issue remaining for decision by the Court is whether Mr Uzice is entitled to damages.  He claims under two heads: Rs 150,000 in damages for “inconvenience, loss and loss of profits in running the business”, and Rs 100,000 for “hardship and moral damage, general inconvenience, embarrassment”, plus interest and costs.
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  • The counterclaim is pleaded against the company and against Mr Westergreen, the minority shareholder.  There is no personal claim against the majority shareholder, Ms Savy.  The defence filed by Mr Elizabeth denied the counterclaim on the merits on behalf of both plaintiffs.  In the course of the hearing I pointed out to Mr Rouillon that the prospect of execution of any judgment against the company must be remote.   He did not however withdraw the claim against the company; nor did he focus on justifying the imposition of personal liability on Mr Westergreen.  In that regard Mr Uzice acknowledged that the agreement to sell the truck was made with the company, not with Mr Westergreen personally.  Mr Rouillon conceded in closing argument that the sole basis for claiming against Mr Westergreen is that the equipment is in his possession. 
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  • Mr Uzice gave evidence in person but did not call any other witnesses.  He claims to have been earning Rs 4,500 per month as a driver operator for the company before he decided to purchase the truck.  He took out a loan with Development Bank of Seychelles to fund the purchase.  The monthly repayments on that loan are Rs 28,000.  Mr Uzice claims to be losing about Rs 50,000 of business a month as a result of not having the equipment.  He has “a lot of window cleaning for me and pressure cleaning but I do not have the equipment … there is a lot of those works nowadays”.   He has been “paying a loan for two years for the equipment that I do not have”.  As a result, he claims, he has been unable to keep up the loan payments and is under serious financial pressure from the bank.
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  • In cross-examination Mr Elizabeth suggested to Mr Uzice that he bought a profitable business and that the reason he is now losing money is that he does not have the “attitude for business”.  When asked whether he had any set of accounts, or anything else, to prove that he had “indeed suffered a loss of profit”, Mr Uzice was only able to respond that he could “find it at DBS”.  He could not expand on this assertion in re-examination, except to say that he had “a lot of quotation for work at my house, I can prove it”.
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  • At the end of Mr Uzice’s evidence, Mr Elizabeth elected to make a submission of no case to answer.  He accepted that, if that submission fails, the plaintiffs have forfeited their right to call evidence.  Mr Elizabeth did not cite any authority to support his position but reference can be made to Victor v Azemia (1977) SLR 195 and to the recent decisions of Marzochie v Toulon [2013] SCSC 46 and Dhanjee v Dhanjee [2013] SCSC 51. 

No case to answer

  • The question for decision on a submission of no case to answer is whether Mr Uzice has established a prima facie case.  If no, judgment is entered against him.   If yes, I proceed to decide whether that case has been proven to the ordinary civil standard on the basis of the evidence already produced.
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  •  Mr Elizabeth made two submissions on behalf of the plaintiffs.  First, Mr Uzice failed to produce “any iota of evidence” to support the “speculation” that he could have made Rs 50,000 per month with the equipment in question.  Secondly, there is no provision in the law of Seychelles for recovery of moral damages for breach of contract.  Mr Elizabeth also emphasised that Mr Uzice’s claim was against the company, not Mr Westergreen personally.
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  • In response, Mr Rouillon began by submitting that “under the commercial code of Seychelles all evidence is acceptable in proving transactions”.  He was however unable to identify the relevant provision, describing it as “common knowledge”.  That is unacceptable conduct from an officer of this Court.  Mr Elizabeth correctly pointed out that he cannot be expected to reply to a submission of this kind.  Nor should the Court be expected to entertain it.  I have repeatedly stated that counsel must come to Court with the tools of their trade.  Mr Rouillon did his client no favours in disregarding this message.
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  • Mr Rouillon went on to submit that the company has acknowledged the sale of the equipment, and that this acknowledgement, coupled with the evidence of Mr Uzice’s payment of insurance for the equipment, “are sufficient to prove [Mr Uzice’s] case maybe not for moral damages but for the loss of business that he has suffered since he took on this transaction”.  That was the extent of the case for his client.
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  • Article 1149 of the Civil Code of Seychelles, hereinafter referred to as the CCS, states in part,

‘(1) The damages which are due are to the creditor cover in general the loss that he has sustained and the profit of which he has been deprived, except as provided hereafter.

(2)

(3) The damages payable under paragraphs 1 and 2 of this article, and as provided in the following articles, shall apply as appropriate to the breach of contract and the commission of a delict.’

  • In order for Mr Uzice to succeed on his counter claim for loss and damages claimed he has to prove that the plaintiffs or one of the plaintiffs was in breach of the agreement between Mr Uzice and plaintiff no.1 for which he was entitled to damages for loss suffered and the profit he had been deprived of.
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  • The agreement between the first plaintiff and Mr Uzice is not disputed. Neither is the fact that the equipment Mr Uzice was supposed to have received was never delivered to him. The plaintiffs have agreed to deliver that equipment and Mr Uzice has accepted to receive that equipment. This is sufficient to prove breach of contract. Nevertheless it is not sufficient to prove loss sustained by Mr Uzice.
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  • Planiol has explained the article 1149 in the following words.

‘The indemnity should represent as exactly as possible the real damage suffered by the creditor. Such damage may consist of two distinct elements, which are noted as follows in Art.1149: on the one hand the loss, that is to say the impoverishment suffered by the patrimony of the creditor; on the other the lost profit. The distinction was made by the Romans and it is usual to call the first of the two elements damnum emergens, and the second lucrum cessans. For example, if a singer breaks his engagement so that the concert cannot take place he must indemnify the impresario with whom he contracted : (1) for expenses already made in preparation for the concert (renting of the hall, billboards, advertisements and notices in newspapers, etc.); (2) the net profit which the impresario would have made from the concert, as well as it can be estimated.’[1]

  • In the absence of any evidence or submission specifically focused on moral damages I am inclined to treat that head of claim as withdrawn.  In any event I accept Mr Elizabeth’s submission (uncontested by Mr Rouillon) that the law of Seychelles does not, in principle, contemplate recovery of moral damages for breach of contract. [See Planiol above.] While it appears that such damages have been awarded in exceptional cases in the past (see for example Kopel v Attorney-General (1936-1955 SLR)) they are certainly not available as a matter of course, as Mr Rouillon appears to have assumed in drafting the counterclaim.
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  • As to the loss of profits claim,  I have no difficulty in accepting that Mr Uzice paid for the equipment in question, or that he may well have been hoping to make a considerable profit from it, but what is missing is any evidence whatsoever of the basis for calculating the claimed figure of Rs 50,000 per month.  Mr Uzice was not in business independently before he purchased this truck, so he cannot use his own past profits as a basis for comparison.  But he could at least have made use of the company’s records (to which Mr Elizabeth actually referred him in cross‑examination) as the basis for a submission that he would have operated at a similar level.  He who alleges must prove.  If Mr Uzice has documents at home or at the bank which are capable of proving this claim then it was his responsibility, and that of his counsel, to identify those documents and get them before the Court. 
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  • Mr Uzice could in regard to proving loss suffered for instance have shown the interest that he was paying on the loan he claimed he had obtained from a bank to pay for the undelivered equipment. Such interest paid would in the circumstances where the first plaintiff failed to deliver the equipment be a loss incurred by the party paying it and therefore recoverable but it was never claimed nor computed.

Decision on counterclaim

  • The plaintiffs (the defendants to the counter-claim) have submitted that there is no case to answer.  I accept this submission in part. Though it has been established that the first plaintiff was in breach of the contract between the parties Mr Uzice has failed to establish the loss suffered and profit he has been denied on account of the first plaintiff’s breach of contract.  The claim for damages for losses incurred and loss of profits by Mr Uzice fails.
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  • It is now common ground that the first plaintiff, the company, failed to deliver the equipment to Mr Uzice in accordance with the 2011 agreement.  Instead the equipment remained in the possession of the second plaintiff, Mr Westergreen.  Even after the counterclaim was filed it took until the last hearing day for the plaintiffs to agree to its release to Mr Uzice.  There has been no explanation for this delay.  In those circumstances, while the plaintiffs have succeeded in resisting the counterclaim, I consider it is just for them to bear the costs of that claim.  I make that award joint and several against both plaintiffs as they both resisted Mr Uzice’s claim.

Signed, dated and delivered at Ile Du Port this 18thday of November 2013

 

FMS Egonda-Ntende

Chief Justice

 

 

 


[1]Planiol Civil Law Treatise, Volume 2, Part 1, Page 149, Paragraph 247 [An English Translation by Louisina State Law Institute]