Traxys Africa Holdings Ltd and Another v Westbrook Resources Ltd

Westbrook Resources Ltd (Westbrook) conducted mineral refining operations in Croatia, extracting manganese from slag. The operation experienced inefficiency problems with its equipment. Between August and November 2008, Westbrook, represented by Walton and Howe, concluded three partly oral and partly written agreements with Metmar (Pty) Ltd (Metmar), represented by Boshoff, for the supply of three jigs (metal recovery plants) to enhance the operation. The written part of the agreements consisted of pro forma invoices specifying purchase prices of $450,000 per jig, delivery terms, and payment schedules including a final 30% payment "on plant commissioning in Croatia". The jigs were delivered between December 2008 and March 2009, but none were properly commissioned or functioning. A dispute arose as to whether Metmar or Westbrook bore the obligation to commission the equipment. Metmar had a profit-sharing agreement with Mr De Beer, who was engaged by Westbrook as site manager. Correspondence and payments showed Metmar's involvement in commissioning efforts through De Beer and others. Westbrook refused to make the final commissioning payments and sued for damages totalling $6,910,112 for loss of profit and additional operational costs. The trial proceeded on separated issues concerning who bore the commissioning obligation.

• Whether Metmar was obliged to commission the equipment sold to Westbrook in Croatia as alleged by Westbrook
• Whether Westbrook and/or De Beer were required to attend to commissioning at their own cost and risk without assistance from Metmar as alleged by Metmar
• Whether oral evidence supplementing written agreements offends the parol evidence rule
• Whether partly oral and partly written agreements can be proved by extrinsic evidence without violating the parol evidence rule

1. The appellant's appeal was dismissed with costs, including costs of two counsel. 2. The respondent's cross-appeal was upheld with costs, including costs of two counsel. 3. The order of the full court was set aside and replaced with a declaratory order stating that: (a) Metmar was obliged to commission the equipment sold to Westbrook in Croatia; (b) neither Westbrook nor De Beer was required to attend to commissioning at their own cost and risk without assistance from Metmar; and (c) neither Westbrook nor De Beer attended to commissioning at their own cost and risk without assistance from Metmar.

Where parties conclude a partly oral and partly written agreement, the parol evidence rule (specifically, the partial integration rule) prevents the admission of extrinsic evidence only to contradict or vary the written portion, but does not preclude proof of additional or supplemental oral agreements that address matters not covered by the written portion. The written agreement is treated as intended to record only a portion of the agreed transaction, leaving the remainder as an oral agreement. Evidence of conduct, correspondence, payments and admissions made by a party after conclusion of the agreement is admissible and relevant to determining whether oral terms formed part of the agreement, particularly where such evidence demonstrates consistent acknowledgment and performance of the alleged oral obligations. An appellate court is bound by factual findings of a trial court, including credibility findings, in the absence of misdirection, and such findings are presumed to be correct.

The court made procedural observations about the importance of courts making appropriate orders that answer the specific questions posed by separated issues, rather than making premature findings on liability or damages. Plasket JA noted that "at the core of the problem" in the lower courts' handling of the matter was "the trite principle that an appeal lies against the order made by the court, not against its reasoning." The court also observed that the parol evidence rule has been "perhaps reduced somewhat in its operation in recent times" while confirming it remains part of South African law. The judgment illustrates the practical difficulties that can arise when trial judges make orders that do not properly correspond to the issues they were required to determine, potentially leaving substantive disputes unresolved despite lengthy trials and appeals. The court granted leave to file a notice of cross-appeal during the appeal hearing to avoid the "unsatisfactory result" of the separated issues remaining unresolved through no fault of the parties.

This case is significant for South African contract law in several respects: (1) It clarifies the application of the partial integration rule (as distinct from the parol evidence rule) to partly oral and partly written agreements, confirming that extrinsic evidence is admissible to prove additional or supplemental oral terms that do not contradict or vary the written portion. (2) It demonstrates how commercial agreements may be constituted by multiple integrated parts, some oral and some written, each addressing different aspects of the transaction. (3) It emphasizes the importance of objectively assessing the probabilities and conduct of parties in determining the terms of partly oral agreements. (4) It illustrates the application of principles regarding appellate deference to trial court credibility findings absent misdirection. (5) It demonstrates proper procedural handling of separated issues and the importance of courts making orders that answer the questions posed rather than ranging beyond them. The case provides important guidance on the proof and enforcement of complex commercial arrangements that are not fully reduced to writing.