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[2020] ZAGPJHC 414
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Dorstfontein Coal Mines (Pty) Ltd v Weldweit Distributors (Pty) Ltd (24287/2017) [2020] ZAGPJHC 414 (14 January 2020)
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REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NUMBER: 24287/2017
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED
14.01.2020
In
the matter between:
DORSTFONTEIN
COAL MINES (PTY) LTD
Plaintiff
And
WELDWEIT
DISTRIBUTORS (PTY)
LTD
Defendant
JUDGMENT
Windell J:
INTRODUCTION
[1]
During July 2017, Dorstfontein Coal Mines (Pty) Ltd (“the
plaintiff”) launched an action, by way of combined summons
against Weldweit Distributors (Pty) Ltd (“the defendant”)
for the repayment of monies overpaid to the defendant.
[2]
Initially, three claims were made out in the amended particulars of
claim. Subsequently, at the commencement of the trial proceedings,
the plaintiff abandoned claims 2 and 3 and tendered costs in respect
of those two claims. The trial proceeded in respect of claim
1 only
(hereinafter referred to as the “plaintiff’s claim”).
FACTUAL
BACKGROUND TO THE PLAINTIFF’S CLAIM
[3]
The plaintiff, who is a coal mining company, and the defendant
entered into two written agreements whereby the defendant would
manufacture, deliver and erect two steel structures varying in size
on the premises of the plaintiff situated at Rietkuil, Portion
[....], Bethal District in Mpumalanga.
[4] The plaintiff relies
on two quotations issued by the defendant to the plaintiff on 14
October 2016 as source documents which
comprise the written contract
regulating the terms and conditions of the agreement concluded
between the parties. The written agreements
are not disputed.
[5]
The larger of the two structures was intended to be used as a
workshop. The smaller of the two steel structures was intended
to be
a warehouse. The salient terms and conditions are set out in the
quotations attached to the combined summons as Annexure
“S1.1”.
In terms of the agreement a 50% deposit was to be paid by the
plaintiff upon ordering the equipment. 30% of
the total amount was
then due on delivery of the material on site, and 20% of the total
amount was payable upon completion of the
erection of the warehouses.
The quotation also had the following provision:
“
Quotation
valid 10 days
. When order signed
and returned to Weldwiet, it will be a legal and binding contract.
Amendments to the contract, can only be made
in writing, and must be
signed by both, Weldweit and the Client. Buyer to supply Sand, Stone
Cement, Water or (“Ready Mix
and Power Point on site”).
Price based on clean, level site, and digging of foundation holes, in
dig-able soil. Foundation
rain-forcing excluded. (Any mine induction,
crane and medical induction excluded). We Weldwiet will not be held
responsible for
any damage, or theft, after the materials is
delivered on site. No steel will be erected, if not paid, as per
agreement. (Payment
details). All materials remains the property of
Weldweit until last payment received in full.
All portal frame steel
SABS 350WA Undercoat is spray painted. Erection will be done
professionally. Delivery ¾ weeks after
signed.”
[6]
As agreed between the parties, 50% of the total amount quoted was
paid by the plaintiff to the defendant on 7 November 2016
and on 13
November 2016 to enable the defendant to commence manufacturing the
structures. On or about 8 December 2016 the defendant
delivered the
material to the premises of the coal mine pursuant to which the
plaintiff effected further payment to the defendant.
The plaintiff
however erroneously made payment to the defendant in the full amount
of each of the quotations amounting to R886 236-00
and
R600 438-00, in addition to the 50% already paid during November
2016.
[7]
In its particulars of claim the plaintiff averred that the payments
in the amount of R886 236.00 and R600 438.00 had
been made
in error following the receipt of “irregular invoices”
which had been submitted to the plaintiff for payment.
During
evidence the plaintiff’s witness, Mr Poczick, testified that
the payment was made in error as a result of “slackness
in the
accounting department”.
[8]
It is common cause that the overpayment by the plaintiff to the
defendant was in excess of the total amount of the agreement
concluded between the parties. It is further common cause that the
defendant did not complete the erection of the structures on
the coal
mine for reasons that will be dealt with later herein.
[9]
According to the plaintiff’s amended particulars of claim, the
plaintiff had therefore overpaid the defendant in an amount
of
R1 040 672.60.
[10]
On 24 May 2017 the plaintiff and defendant held a meeting at the
offices of Dorstfontein West Colliery. The plaintiff and defendant,
during their evidence, had different versions as to the purpose of
the meeting and as to what transpired during the meeting, but
it was
during this meeting that the plaintiff took the opportunity to inform
the defendant that the two payments made during December
2016 in
favour of the defendant had been made in error. After the meeting was
adjourned, the attorney of record for the plaintiff
addressed a
letter to the legal representative for the defendant which confirmed
the contents of the meeting in writing and requested
that the
overpaid amount which had been erroneously transferred to the
defendant be deposited into the plaintiff’s bank account
by no
later than 26 May 2017.
[11]
The defendant responded to the demand for payment by raising the
issue of set -off against the overpayment for equipment allegedly
purchased by the defendant and for “attendances on site”.
[12]
The plaintiff addressed a letter to the defendant and contended that
in the event that further equipment needed to be purchased
or further
work was to be performed by the defendant then a formal quotation for
the additional costs should have been made available
to the plaintiff
to consider and sign. This was never done.
THE
PLEADINGS
[13]
The plaintiff’s claim is for an overpayment, which the
plaintiff pleaded at paragraph 7 of its amended particulars of
claim,
to wit:
“
On
or about 13 DECEMBER 2016 the plaintiff erroneously made payment of
the full contract price of both warehouses in an amount of
R886 236.00 (EIGHT HUNDRED AND EIGHTY-SIX THOUSAND TWO HUNDRED
AND THIRTY-SIX RAND) and R600 438.00 (SIX HUNDRED THOUSAND
FOUR
HUNDRED AND THIRTY-EIGHT RAND) respectively.
These
payments had been made in error following receipt of irregular
invoices submitted by the defendant
."
(emphasis added)
[14]
Counsel for the plaintiff contends that the pleaded cause of action
was a claim for the repayment of monies overpaid to the
defendant and
that the nature of its claim was not the
condictio indebiti
.
Counsel however argues that should this court find that it was the
condictio indebiti
, that the elements had been fulfilled.
[15]
The legal nature of the plaintiff’s cause of action can be
concluded from the plaintiff’s pleaded facts. The only
conceivable cause of action is that of a
condictio indebiti
.
[16]
In response thereto, the defendant pleads (at paragraph 9.1 of its
amended plea) that:
“
The
contents of this paragraph are denied. It is submitted that the
Plaintiff overpaid the defendant in the amount of R223 497.28,
which amount was repaid to the plaintiff on or about 7 June 2017.”
[17]
Pleadings must be read as a whole. The established legal principle is
that a pleading is about facts from which legal conclusions
may be
drawn. It is clear from the defendant’s plea that the defendant
admitted that there was an overpayment, but denied
that the payments
were made following irregular invoices. It however raised a defence
of set-off. As basis for its defence the
defendant relied on the
quotations that formed the basis of the agreement between the
parties. It is alleged that the quotation
for the erection of the two
warehouse on the plaintiff’s property was based on a clean and
level site and digging of foundation
holes in “dig-able”
soil. The defendant avers that it was an express, alternatively tacit
term of the agreement that
the amounts quoted in the agreement would
be valid only – and relevant to – circumstances wherein
the site would be
clean and level and where the soil would be
dig-able. The defendant contended that the parties expressly,
alternatively tacitly,
agreed that the price was subject to increase
in circumstances where the site was not clean and/or level, and where
the soil was
of such consistency that it was capable of being dug
into without the assistance of power tools. As a result, extra costs
were
allegedly incurred by the defendant and invoices were submitted
to the plaintiff for costs associated with the additional work that
was carried out on the site by the defendant.
1
Costs related to the erection of the steel structures in the amount
of R501 600.00
was invoiced to the plaintiff on 18 May 2017;
2
Two jackhammers were hired from Hire All at an additional amount of
R5130.00;
3
As agreed between the parties, 16 clear sheets were installed at the
plaintiff’s
premises at the cost of R13 109.72.
[18]
According to the defendant’s records, and after the extra costs
were set off, it is alleged that the plaintiff had overpaid
the
defendant in the amount of R223 497.28 which amount had been
repaid to the plaintiff on 7 June 2017. The defendant denied
that
there are any outstanding amounts due and payable.
[19]
The plaintiff contended that the defendant had unilaterally amended
the terms of the agreement, and that defendant is only
entitled to
payment of the two jackhammers and 16 clear sheets.
THE
ONUS
[20]
The defendant does not dispute that the plaintiff has pleaded a cause
of action, but however contends that the plaintiff has
been unable to
prove its pleaded claim.
[21]
The onus is on the plaintiff to prove its claim.
[1]
The defendant however admitted in its plea that there was an
overpayment made in error and in fact paid back an amount of
R223 497.28
to the plaintiff on 7 June 2017, after it was
confronted with the overpayment. This specific amount was paid back
because, on the
defendant’s version, it was entitled to set-off
an amount against the overpayment for extra costs incurred and
according
to its calculations that was the specific amount that was
overpaid. The only issue placed in dispute was that it was not paid
as
a result of an irregular invoice, but it was never disputed that
the payment was made in error. The defendant’s witness, Mr
Claassen in any event admitted that there was an obligation to repay
overpayments and an undertaking to do so. His evidence is
that he is
not obliged to pay any money back as he is entitled to set off the
money owed to the plaintiff against money owed to
him for work done.
It was never the defendant’s case that the plaintiff’s
conduct was so slack
that
it does not deserve the protection of the law, and that it should, as
a matter of policy, not receive it.
The
plaintiff’s case was on a predicated common cause obligation to
repay the monies overpaid to the defendant. As was correctly
pointed
out by the plaintiff in its heads of argument, as set out in
Jowell
v Bramwell-Jones and Others
1998 (1) SA 836
(W) at 898 F- J:
“…
Each
party is bound by his own pleading and cannot be allowed to raise a
different or fresh case without due amendment properly
made
.”
Accordingly,
the contention advanced in oral argument that the plaintiff failed to
prove its claim and the reliance on the matter
of
Willis
Faber Enthoven (Pty) Ltd v Receiver of Revenue and Another
,
[2]
is misplaced.
[22]
A defendant may plead non-enrichment as a defence. Once a payment
indebite
has been established, the onus is on the defendant to
prove that the payment did not enrich the defendant. This issue was
not raised
in the pleadings and the defendant is not entitled to
raise it during argument.
SET-OFF
[22]
The only issue left for determination is the defendant’s
defence of set -off. Set-off takes place when two parties (a)
are
mutually indebted to each other and (b) both debts are liquidated and
fully due. If a creditor claims payment the defendant
must plead and
prove set-off. To rely on set-off the defendant must allege and prove
(a) the indebtedness of the plaintiff to the
defendant; (b) that the
plaintiff’s debt to the defendant is due and payable; (c) that
both debts are liquidated and (d)
that the parties are indebted to
each other in the same capacity.
[3]
[23]
The written agreements provided that payment of the quoted amounts
must be made in three stages: 50% on accepting the quote,
30% on
delivery of the material and 20% on finalization of the work. It is
common cause that the work was never finalized. The
defendant was
therefore not entitled to payment of the 20% before the work was not
finalized. The agreements contained a non-variation
clause namely
amendments to the contract, can only be made in writing, and must be
signed by both parties.
[24]
The defendant’s argument is that, in addition to the
Shifren
clause, the written quotes were subject to the following provisions:
1.
“
Price based on clean and level
site, and digging foundation holes in dig-able soil
”
;
2. “
foundation
rain-forcing excluded”;
3. “Any mine
induction, crane and medical induction excluded”
[25]
Counsel for defendant further contends that if regard is had to the
totality of the evidence, the purpose of the agreement
could never
have been that the parties agreed upon an absolute fixed price for
the provision of a finished product. This was a
dynamic and
interactive construction project, in respect of which the plaintiff
also bore certain reciprocal obligations. Viewed
in its proper
context, and the purpose of the agreements, there can be little doubt
that the plaintiff’s obligations were
to be fulfilled within a
reasonable period of time; and failing such timeous fulfilment of its
obligations, the price quoted would
increase. Relying on
Bank
v Grusd
[4]
,
it
is contended that it would be absurd, let alone business-like, if the
price was not be subject to change in circumstances in
which the
plaintiff did not timeously uphold its obligations in terms of the
agreement. Such an interpretation would place the
defendant in an
invidious position, capable of being significantly prejudiced by a
lackadaisical plaintiff.
[26]
In
Bank
v Grusd,
the court held as follows:
[5]
“
It
seems to me, therefore that if the defendant proves that the
plaintiff agreed that the extra work should be done or, knowing
that
the defendant regarded the work to be performed as falling outside
the contract, stood by and allowed him to do this work,
well knowing
that she was going to get the benefit, she ought not to be heard when
she says "I refuse to pay because I had
given no written
authority to the defendant to supply these extras
……
The
preponderance of probability is in favour of the defendant's evidence
that the particulars (a), (b), (c), (d), (e), (g) and
(h) were done
and supplied at the request of the plaintiff, who verbally undertook
to pay a reasonable price for them. The prices
given by Mr. Kaplan in
evidence have not been seriously challenged, and we propose accepting
them.”
[27]
The facts in
Bank v Grusd
are wholly distinguishable from the
facts in the present matter. There was no oral agreement between the
parties and no invoices
were presented to the plaintiff as and when
“extra work” and “additional costs” were
incurred. The work
was not finalised and the defendant was not
entitled to full payment of the contract price. The plaintiff denied
any liability
in respect of further expenses incurred by the
defendant on the basis that there was no cause for same. Although
there were initial
issues in respect of the condition of the site,
the defendant commenced work and testified that any issues in
existence were cured
by the plaintiff at its own instance and costs.
There is no evidence to suggest that because it took longer to
finalize the project
that there was any consensus between the parties
that plaintiff would be liable for any additional costs incurred as a
result of
the delay. As far as the jackhammers and the clear sheets
are concerned: These expenses were incidental to the contract and the
plaintiff tenders payment for these additional items.
[28]
The defendant
in casu
relied on an express and/or tacit agreement between the parties. On a
conspectus of the evidence presented the defendant failed
to prove
any such terms. Its defence of set-off must therefore fail. There is
no basis upon which to set aside the provision of
the
Shifren
clause
[29]
In the result the following order is made:
29.1 The defendant
is ordered to make payment to the plaintiff in the amount of
R1,040,672.60;
29.2 Interest on
the above amount in paragraph 29.1 at the rate of 10.5% per annum a
tempore morae from date of demand;
29.3 Costs are
awarded to the plaintiff on a party and party scale.
L.
WINDELL
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
APPEARANCES
Attorney
for the plaintiff:
Warrener
De Agrela and Associates Inc.
Counsel
for the plaintiff:
Advocate L.
Morland
Attorney
for the defendant:
BDK Attorneys
Counsel
for the defendant:
Advocate B. Edwards
Date
matter heard:
16 September 2019
Judgment
date:
14
January 2020
[1]
Recsey
v Reiche
1927
AD 554
at 556
[2]
[1992]
4 All SA 62 (AD)
[3]
Amlers
Precedents of Pleadings 9
th
Edition p336.
[4]
1939
TPD 286
[5]
At
page 288.