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[2015] ZAGPJHC 206
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Georgiou v Tyres 2000 (Heriotdale) (Pty) Limited (33788/2014) [2015] ZAGPJHC 206 (16 September 2015)
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REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE NO: 33788/2014
DATE: 16 SEPTEMBER 2015
In the matter between:
ESLEY
GEORGIOU
...................................................................................................................
Plaintiff
And
TYRES 2000 (HERIOTDALE) (PTY)
LIMITED
................................................................
Defendant
JUDGMENT
WANLESS, AJ:
Introduction
[1] The Plaintiff in this matter is one
ESLEY GEORGIOU, an adult female, who is the sole proprietor of
EFFECTIVE FINISHES and who
carries on business as a renovator and
refurbisher of homes and offices.
[2] The Defendant is TYRES 2000
(HERIOTDALE) (SA) (PTY) LIMITED, a company which carries on business
as, inter alia, a seller of
used tyres.
[3] The Plaintiff claims payment from
the Defendant in the amount of R354 959,16 arising from an oral
agreement entered into between
the parties during or about
March/April 2010. When the agreement was entered into the Plaintiff
acted in person and the Defendant
was represented by TIMOTHY RICHARD
JAMES HURLEY (hereafter referred to as “Hurley”).
The Pleadings
[4] The Plaintiff’s said claim,
as pleaded on behalf of the Plaintiff in the Plaintiff’s
Particulars of Claim, is a
relatively straightforward one. It is
alleged that the Defendant was the owner of an immovable property
situated at Erf [1…..]
[B…….] Township
(hereafter referred to as “the property”) and in terms of
the agreement the Plaintiff
would attend to certain refurbishment and
renovations of the property. Further, the Defendant would remunerate
the Plaintiff at
the Plaintiff’s “usual rates and costs,
alternatively, at a reasonable rate and costs”.
[5] Having alleged that the Plaintiff
carried out the refurbishment and renovations to the property
timeously and in a proper workmanlike
fashion the Plaintiff avers
that the Plaintiff’s usual rates and costs, alternatively, the
Plaintiff’s reasonable rates
and costs are as set out in a
schedule attached to the Plaintiff’s Particulars of Claim
marked annexure “EG1”
which is supported by various
slips, invoices and notes annexed thereto (annexures “EG2.1”
to “EG2.95”).
[6] The Plaintiff also avers (in
paragraph 9 of the Plaintiff’s Particulars of Claim) that on
the 25th of November 2011 the
Defendant, duly represented by Hurley,
orally undertook to pay the sum of R354 959,16 to the Plaintiff. This
alleged undertaking
was not relied upon by the Plaintiff at trial.
[7] In the premises, the Plaintiff’s
claim, as pleaded, is one of work done and materials supplied in
connection therewith.
[8] In its Plea the Defendant admits
that the Plaintiff and the Defendant entered into an oral agreement
but denies the terms of
that agreement as set out in the Plaintiff’s
Particulars of Claim.
[9] In amplification of the said denial
the Defendant essentially avers that the parties would enter into a
joint venture whereby
a property would be purchased and renovated for
the purposes of re-selling the property so as to make a profit.
[10] The Defendant further avers that
the Defendant would purchase the property and pay all ancillary costs
in relation thereto
whereafter the property would be registered in
the name of the Defendant.
[11] The Plaintiff would attend to the
renovations and refurbishment of the property expending reasonable
costs in relation thereto.
[12] Thereafter, the parties would sell
the property for the highest price they could achieve and the parties
would be refunded
the respective amounts they had put into the
project with the important proviso that the Defendant would be
reimbursed all the
monies expended by it into the purchase of the
property before the Plaintiff was reimbursed for the costs incurred
in carrying
out the renovations and refurbishment to the property.
Finally, the parties would share equally in the remaining profit from
the
sale of the property.
[13] It is further averred that the
Plaintiff did not apply a reasonable cost in renovating and
refurbishing the property but over
capitalised in respect thereof.
[14] It is the Defendant’s
defence that after the sale of the property on or about the 30th of
March 2012 for the sum of R1
600 000,00 the Defendant was reimbursed
the sum of R1 379 765,42 which was the total amount expended by the
Defendant on the purchase
of the property which included agent’s
commission; interest that accrued to the seller of the property and
interest on the
Defendant’s overdraft facility.
[15] Following thereon the Defendant
avers that the total amount available for distribution after the
Defendant had been so reimbursed
was an amount of R220 234,58.
Finally, the Defendant avers that each party is entitled to payment
of an amount of R110 117,29
being an equal share of the profit and
tenders to pay this amount to the Plaintiff.
[16] The Plaintiff did not file a
Replication to the Defendant’s Plea. The relevance of this
will be dealt with at a later
stage in this judgment.
[17] When the trial commenced, I was
advised that the quantum of the Plaintiff’s claim was not
disputed by the Defendant save
for one item. This item is a
quotation at page 44 of exhibit “A” dated the 15th of
November 2010 from “BATHROOM
BIZARRE” in the total amount
of R8 622,25.
[18] Each party led the oral evidence
of a single witness. The Plaintiff herself gave evidence and Hurley
gave evidence on behalf
of the Defendant.
Evidence of the Plaintiff
[19] The Plaintiff gave evidence that
during or about the early part of 2010 she entered into a
relationship with Hurley.
[20] She further testified that it was
agreed between Hurley and herself that they would purchase a house;
renovate it and sell
it for a profit.
[21] Hurley would be responsible for
the payments in respect of purchasing the property and she would pay
for the renovations and
refurbishments to that property.
[22] The Plaintiff testified that it
was agreed between herself and Hurley that once the property had been
sold, she would be able
to claim her expenses and thereafter an equal
share of the profit.
[23] With regard to the single item
disputed by the Defendant the Plaintiff testified that she had made
payment in respect thereof,
which payment appeared at page 41 of
exhibit “A”. Further, she confirmed that the goods
purchased on the quotation
as described at page 44 of exhibit “A”
were used to improve the property.
[24] She further confirmed that she was
simply claiming her expenses from the proceeds of the sale and was
not claiming any fee
in respect of professional services rendered.
[25] With regard to the reconciliation
prepared on behalf of the Defendant and which appears at page 229 of
exhibit “C”
the Plaintiff testified that she had no
knowledge of the expense claimed by the Defendant in respect of
“interest on overdraft”.
She also stated that she was
initially unaware that the Defendant would be purchasing the property
and was under the impression
that Hurley would be purchasing the
property in his personal capacity.
[26] Under cross-examination the
Plaintiff denied the version put to her on behalf of the Defendant
that the Defendant would be
reimbursed first and thereafter the
parties would share in the profits. She repeated her understanding of
the agreement that each
party would be re-imbursed in respect of
their expenses and thereafter there would be an equal share in the
profit.
[27] Also, under cross-examination, the
Plaintiff was unable to dispute that the expenses to the Defendant
may have amounted to
the sum of R1 379 765,42 as set out in the
reconciliation at page 229 of exhibit “C”.
Evidence of Hurley
[28] It was common cause that this
witness represented the Defendant in the oral agreement entered into
between the Plaintiff and
the Defendant.
[29] He testified that when entering
into the agreement the Plaintiff was aware, at all material times
thereto, that the Defendant
would be purchasing the property and
would be using the Defendant’s overdraft facility in respect
thereof.
[30] He further testified that when
entering into the agreement the Plaintiff was aware that the
Defendant would have to recover
these costs before the Plaintiff
recovered any of her costs as Hurley had a responsibility towards
“shareholders” of
the Defendant to ensure that any
amounts invested by the Defendant in the project were fully
recovered.
[31] Hurley also testified that any
profit after these costs had been recovered would be divided equally
between the parties.
[32] This witness gave evidence as to
the reconciliation prepared on behalf of the Defendant and which
appears at page 229 of exhibit
“C”. He did not testify
that he compiled this reconciliation personally or that he had
personal knowledge as to the
correctness thereof.
[33] Under cross-examination he
correctly conceded that apart from the aforesaid entry of R151 890,41
in relation to the alleged
expense by the Defendant arising from
“interest on overdraft” there was no real evidence placed
before this Court as
to how that amount was calculated and indeed,
whether this expense was incurred at all.
[34] When asked under cross-examination
whether, when calculating a profit, one should deduct all expenses,
this witness agreed
therewith.
Matters which are common cause or not
in dispute
[35] The following facts are common
cause or not in dispute in this matter, namely:-
[a] the Plaintiff and Hurley were in a
relationship when the agreement was entered into;
[b] this relationship came to an end
during or about November 2011;
[c] the Plaintiff was not in a
financial position to purchase a property;
[d] both parties always envisaged a
situation where the property would be resold for a price which would
enable both parties to
recover their expenses before there was an
equal division of the profit; and
[e] both the amount and reasonableness
of the Plaintiff’s claim (quantum) were not seriously disputed
by the Defendant, either
under cross-examination or by placing any
evidence before this Court.
Matters in issue
[36] The issues to be decided are the
following, namely:-
[a] whether it was agreed that the
Defendant would be re-imbursed in respect of the Defendant’s
expenses prior to the Plaintiff
being re-imbursed for hers and before
splitting any profit equally between the parties;
[b] whether the amount of R151 890,41
claimed as an expense by the Defendant under “interest on
overdraft” should be
accepted or not;
[c] if the amount of R8 622,25 was an
expense incurred on behalf of the Plaintiff as an item in the
renovation or refurbishment
of the property; and
[d] following thereon, whether the
Defendant is liable to pay to the Plaintiff the sum of R354 959,16 as
claimed by the Plaintiff,
alternatively, the amount of R110
117,29 as tendered by the Defendant.
The argument on behalf of the Plaintiff
[37] Mr Thompson, who appeared on
behalf of the Plaintiff, submitted that the Plaintiff’s version
was not only a “simple
one” but also made “business
sense”. Further and in this regard, it was submitted on behalf
of the Plaintiff
that the Plaintiff’s version of the agreement
that both parties would receive back the amounts expended by them
into the
project and thereafter any profit would be split equally
between them not only made “business sense” but was also
supported
by the Plaintiff’s evidence (which was confirmed by
Hurley when he gave evidence on behalf of the Defendant) that the
Plaintiff
was not in a financial position to purchase a property. It
follows, so the argument on behalf of the Plaintiff goes, that the
Plaintiff
would therefore not put herself at risk by reaching an
agreement whereby the Defendant recovered monies put into the project
before
the Plaintiff was able to recover her expenses.
[38] It was further submitted by Mr
Thompson that this Court should have no regard to the claim by the
Defendant of the amount in
respect of “interest on overdraft”
and once this alleged expense was taken out of the equation there is
a sufficient
profit, when split equally between the parties, to cover
the Plaintiff’s claim.
[39] In conclusion, it was submitted on
behalf of the Plaintiff that there is nothing inherently improbable
about the version of
the Plaintiff which should be accepted and the
version of the Defendant be rejected as improbable.
The argument on behalf of the
Defendant
[40] It was submitted by Miss Raff, on
behalf of the Defendant, that the Plaintiff had failed to discharge
the onus incumbent her
to prove, on a balance of probabilities, the
agreement as pleaded by the Plaintiff. In this regard, it was
submitted that the
Plaintiff had essentially pleaded a claim for
“services rendered and costs incurred” and there was no
mention whatsoever
in the Plaintiff’s Particulars of Claim (the
Plaintiff having declined to serve and file a Replication to the
Defendant’s
Plea) of a “joint venture project”.
[41] It was also submitted on behalf of
the Defendant that the Plaintiff’s evidence of the parties
entering into an agreement
which was essentially one of a joint
venture supported the Defendant’s version which this Court
should accept.
[42] Miss Raff also made the submission
that as it was essentially common cause between the parties that
Hurley wished to give the
Plaintiff a helping hand by sending
business her way and that the agreement entered into was not, in a
strict sense, a business
transaction. Therefore, the Defendant would
not accept any risk and would only have entered into the agreement if
the Defendant
was guaranteed to recover all the Defendant’s
expenses prior to a split of any profit between the parties.
[43] Finally, it was submitted that
this Court should take cognisance of the tender made by the Defendant
to the Plaintiff insofar
as it may have a bearing on the issue of
costs, regardless of my judgment in this matter.
The Law
[44] In order to resolve the factual
dispute in this matter where I am faced with two irreconcilable
versions, I am guided by the
decision of Stellenbosch Farmers’
Winery Group Ltd and Another v Martell Et Cie and Others
2003 (1) SA
11
(SCA) where Nienaber JA summarised the technique generally
employed by courts to resolve same.
[45] At paragraph [5] of the judgment,
it was held:-
“The technique generally employed
by courts in resolving factual disputes where there are two
irreconcilable versions before
it may be summarised as follows. To
come to a conclusion on the disputed issues the court must make
findings on (a) the credibility
of the various factual witnesses, (b)
their reliability, and (c) the probabilities. As to (a), the court’s
finding on the
credibility of a particular witness will depend on its
impression of the veracity of the witness. That in turn will depend
on a
variety of subsidiary factors such as (i) the witness’
candour and demeanour in the witness-box, (ii) his bias, latent and
blatant, (iii) internal contradictions in his evidence, (iv) external
contradictions with what was pleaded or put on his behalf,
or with
established fact or with his own extracurial statements or actions,
(v) the probability or improbability of particular
aspects of his
version, and (vi) the calibre and cogency of his performance compared
to that of other witnesses testifying about
the same incident or
events. As to (b), a witness’ reliability will depend, apart
from the factors mentioned under (a)(ii),
(iv) and (v) above, on (i)
the opportunities he had to experience and observe the event in
question and (ii) the quality, integrity
and independence of his
recall thereof. As to (c), this necessitates an analysis and
evaluation of the probability or improbability
of each party’s
version on each of the disputed issues. In the light of it’s
assessment of (a), (b) and (c) the court
will then, as a final step,
determine whether the party burdened with the onus of proof has
succeeded in discharging it. The hard
case, which will doubtless be
the rare one, occurs when a court’s credibility findings compel
it in one direction and its
evaluation of the general probabilities
in another. The more convincing the former, the less convincing will
be the latter. But
when all factors are equipoised, probabilities
prevail.”
[46] On the one hand it is true that
since the object of pleading is to define the issues so as to enable
the other party to know
what case he has to meet the parties are,
therefore, limited to their pleadings; a pleader cannot be allowed to
direct the attention
of the other party to one issue and then at the
trial attempt to canvass another.
Nyandeni v Natal Motor Industries
Limited
1974 (2) SA 274
(D&CLD)
Minister of Agriculture and Land
Affairs v De Klerk
2014 (1) SA 212
(SCA) at 223 G - H
[47] However, since pleadings are made
for the court, not the court for pleadings, it is the duty of the
court to determine what
are the real issues between the parties and,
provided no possible prejudice can be caused to either party, to
decide the case on
these real issues.
Imvula Quality Protection (Pty) Limited
v Loureiro and Others
2013 (3) SA 407
(SCA) at paragraph [47]
[48] In this regard the court has a
wide discretion and must look at the substantial issue between the
parties and not blindly follow
the wording of the pleadings.
Imprefed (Pty) Limited v National
Transport Commission
1993 (3) SA 94
(AD) at 108 E
Stead v Conradie en Andere
[1994] ZASCA 147
;
1995 (2) SA
111
(AD) at 122 B
Odendaal v Van Oudtshoorn
1968 (3) SA
433
(TPD) at 436 B – E
Weepner v Kriel
1977 (4) SA 212
(CPD)
at 217 H
Bowman NO v De Souza Roldao
1988 (4) SA
326
(TPD) at 331 H
Erasmus: Superior Court Practice at B1
- 130
[49] The golden rule of interpretation
is to seek the intention of the parties at the time the contract was
entered into. Thus,
in the matter of Joubert v Enslin
1910 AD 6
,
Innes JA held:-
“The golden rule applicable to
the interpretation of all contracts is to ascertain and to follow the
intention of the parties;
and, if the contract itself, or any
evidence admissible under the circumstances, affords a definite
indication of the meaning of
the contracting parties, then it seems
to me that a court should always give effect to that meaning.”
[50] In ascertaining that intention our
law is clear that the court may interpret same to give it business
efficacy. Further, a
court may, in order to give the contract the
required business efficacy, apply what has become commonly known as
“the officious
bystander test”.
Christie: The Law of Contract in South
Africa (6th Edition) at pages 174 - 181
[51] In the matter of Richard Ellis
South Africa (Pty) Limited v Miller
1990 (1) SA 453
(TPD) at 460 D –
E, Kriegler J stated:-
“Ex hypothesi neither the
respondent nor anyone on behalf of the appellant could have given any
cogent evidence regarding
a term to which they had not consciously
directed their mind. At best they could have attempted, ex post facto
and with the point
at issue clouding their objectivity, to furnish
information which can more readily be deduced from the surrounding
circumstances.”
Judgment
[52] Having observed the Plaintiff and
Hurley in the witness-box I am satisfied that both were credible
witnesses.
[53] Obviously, their respective
reliability must be weighed against their respective lack of
objectivity.
[54] Bearing in mind the facts which
are common cause or cannot be disputed in this matter, I find that
the probabilities, insofar
as whether it was agreed that the
Defendant would be re-imbursed in respect of the Defendant’s
expenses prior to the Plaintiff
being re-imbursed for hers and before
splitting any profit equally between the parties, are as set out
hereunder.
[55] In light of, inter alia, the fact
that the Plaintiff and Hurley were in a relationship when the
agreement was entered into,
it is improbable that it would have been
specifically agreed between the parties that the Defendant should be
re-imbursed before
the Plaintiff.
[56] More importantly, it is highly
improbable that any agreement would have been specifically reached as
to which party would be
re-imbursed in respect of their expenses
prior to the other in light of the fact that it was never envisaged,
by either the Plaintiff
or Hurley (representing the Defendant), that
the profit to be made would not be sufficient to cover all the
expenses invested in
the project by both parties.
[57] It is also more probable that the
Plaintiff would not have put herself at risk by agreeing to a term
whereby the Defendant
would be re-imbursed before she was. In this
regard, it is common cause that not only were the Plaintiff and
Hurley in a relationship
but also, that Hurley entered into the
agreement to, at least in part, assist the Plaintiff.
[58] In order to give the agreement
business efficacy, I accordingly find that it was an implied term of
the agreement that both
parties would be re-imbursed in respect of
their expenses prior to the profit being shared equally between them.
[59] The importation of this term into
the agreement not only satisfies the golden rule of interpretation
and gives the agreement
between the party business efficacy but it
also satisfies the officious bystander test.
[60] Whilst it is true that the version
put forward by the Plaintiff at trial did not fall squarely within
the parameters of the
Plaintiff’s claim as pleaded on her
behalf in the Plaintiff’s Particulars of Claim (the Plaintiff
having declined to
serve and file a Replication to the Defendant’s
Plea), this did not detract in any way from the veracity of the
Plaintiff’s
evidence and did not, in any manner, prejudice the
Defendant at trial.
[61] I come to this finding on the
basis that the Plaintiff’s claim essentially remains one for
materials supplied the Plaintiff
having not proceeded with any claim
for her professional fee, as pleaded. Most importantly, the real
issues of this matter (as
set out herein) were fully canvassed by
both parties at trial and further, there was agreement between the
parties as to the nature
and extent of those issues.
[62] It follows from the aforegoing
that I find that it was not a term of the agreement that the
Defendant would be re-imbursed
in respect of the Defendant’s
expenses prior to the Plaintiff being re-imbursed for hers and before
splitting any profit
equally between the parties.
[63] I turn now to consider whether the
amount of R151 890,41 claimed as an expense by the Defendant under
“interest on overdraft”
should be accepted or not in the
calculation of the profit (if any) made after the property was sold
and after deducting the expenses
of both parties.
[64] To my mind it is clear that it
should not. Despite having had the opportunity to do do the
Defendant elected not to place
any documentary evidence or evidence
of a witness who had personal knowledge thereof before this court to
show that this amount
was, in the first instance, correct and more
particularly, that it was legitimately incurred in relation to the
purchase of the
property. In the premises, there is nothing before
me which could enable me to find that this amount can be claimed by
the Defendant
as an expense incurred in the purchase of the property.
[65] In light of this finding, it is
not necessary for me to consider whether or not it is probable that
when the parties entered
into the agreement the Plaintiff was, at all
material times thereto, aware that the property would be purchased by
the Defendant
and not by Hurley in his personal capacity.
[66] With regard to the dispute as to
whether the amount of R8 622,25 was an expense incurred on behalf of
the Plaintiff as an item
in the renovation or refurbishment of the
property, it has already been noted in this judgment that both the
amount and reasonableness
of the Plaintiff’s claim were not
seriously disputed by the Defendant, either under cross-examination
or by placing any evidence
before this Court.
[67] This must apply equally to the
item under consideration and in this regard the Plaintiff’s
evidence was both clear and
uncontradicted. Under the circumstances,
it must be accepted that she had made payment in respect thereof and
that the goods purchased
were used to improve the property.
[68] In the premises, I find that the
amount of R8 622,25 was an expense incurred on behalf of the
Plaintiff as an item in the renovation
or refurbishment of the
property.
[69] It is common cause between the
parties that on or about the 30th of March 2012 the property was sold
for the amount of
R1 600 000,00.
[70] When one excludes the claim of
R151 890,41 from the expenses of the Defendant then the Defendant’s
expenses amount to
the sum of R1 227 875,01.
[71] Hence, the selling price (R1 600
000,00) is sufficient to cover both the expenses of the Defendant (
R1 227 875,01) and the
claim of the Plaintiff ( R354 959,16). This
is particularly so in light of the fact that the Plaintiff is not
claiming any professional
fee for the work carried out by her and,
most importantly, is also not claiming a share of any profit.
[72] In the premises, the Defendant is
liable to pay to the Plaintiff the sum of R354 959,16 in respect of
the Plaintiff’s
claim for materials supplied in relation to the
refurbishment and renovation of the property.
[73] Under the circumstances, it is not
necessary for me to consider the tender made by the Defendant to pay
to the Plaintiff the
sum of R110 117,29.
Interest
[74] The Plaintiff has claimed interest
at the rate of 15,5% per annum from the date of demand to date of
final payment (prayer
2 to the Plaintiff’s Particulars of Claim
at page 7 of the bundle of pleadings).
[75] The Combined Summons in this
matter was served upon the Defendant on the 17th of September 2014
(the Return of Service at page
1 of the bundle of Notices, refers).
[76] As at the 1st of August 2014 the
rate of interest for the purposes of
Section 1(1)
of the
Prescribed
Rate of Interest Act No. 55 of 1975
was reduced from 15,5% per annum
to 9,0% per annum.
[77] Accordingly, the Plaintiff is
entitled to interest at the rate of 9,0% per annum and not 15,5% per
annum as prayed.
Order
[78] In the premises, I make the
following order, namely:-
[a] the Defendant is to pay to the
Plaintiff the sum of R354 959,16;
[b] interest thereon, calculated at the
rate of 9,0% per annum from the 18th of September 2014 to date of
final payment; and
[c] costs of suit.
B.C. WANLESS
ACTING JUDGE OF THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
DATE OF HEARING: 27 August 2015
DATE OF JUDGMENT: 16 September
2015
COUNSEL FOR THE PLAINTIFF Adv. C. E
Thompson
INSTRUCTED BY:204 Weltevreden
Road
REFERENCE Northcliff Extension 2
Johannesburg
COUNSEL FOR THE DEFENDANT: Adv. J.
Raff
INSTRUCTED BY: 22 Steyn Street
REFERENCE Highway Gardens
Edenval