Goba (Pty) Ltd v Rohrich NO and Others (953/2008) [2009] ZAECPEHC 33 (21 July 2009)

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[2009] ZAECPEHC 33
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Goba (Pty) Ltd v Rohrich NO and Others (953/2008) [2009] ZAECPEHC 33 (21 July 2009)

FORM A
FILING SHEET FOR EASTERN CAPE
HIGH COURT, POR ELIZABETH JUDGMENT
PARTIES
:
Registrar:
Magistrate:
High
Court:
EASTERN
CAPE HIGH COURT, PORT ELIZABTH
DATE
HEARD: 22.06.2009 TO 25.06.2009
DATE
DELIVERED: 21 JULY 2009
JUDGE(S):
DAMBUZA J
LEGAL
REPRESENTATIVES –
Appearances:
for
the Plaintiff(s)/Applicant(s)/ Appellant(s): Adv S.C. Rorke
for
the Defendant(s)/Respondent(s): Adv M.W. Nobatana
Instructing
attorneys:
Plaintiff(s)/
Applicant(s)/Appellant(s): Rushmere Noach Inc
5 Ascot Office Park
Conyngham
Road
Greenacres
PORT
ELIZABETH
Defendant(s)/Respondent(s): Silas
Nkanunu & Van Loggerenberg
Second
Floor – Nedbank Building
Cnr.
Govan Mbeki Avenue &
Harrower
Road
North
End
PORT
ELIZABETH
CASE
INFORMATION -
Nature
of proceedings
:
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE – PORT ELIZABETH)
Case No.: 953/2008
Date
delivered:
21
July 2009
In the matter between:
GOBA (PTY) LIMITED
Plaintiff
and
DIETER HEINZ WERNER ROHRICH N.O.
First Defendant
SINDISWA GLADYS JAWUKA N.O.
Second Defendant
SILAS NTUTHUZELO NKANUNU N.O.
Third Defendant
MZIMKHULU GORDON DILIMA N.O.
Fourth Defendant
MCEBISI OSMAN XUNDU N.O.
Fifth Defendant
NYANISILE MOSES BOYCE N.O.
Sixth Defendant
J U D G M E N T
DAMBUZA,
J
:
The plaintiff sues
the defendant for fees due to it in respect of professional services
rendered by it in the development of phase
s
2 and 3 of the Bethelsdorp North Township, Port Elizabeth (“the
township”).
The defendants are
cited in their capacity as trustees of the Mzingisi Development
Trust (TM 3252) (
“the
trust”).
The plaintiff is a firm of consulting
engineers and the trust is a township/property developer.
The development of
the township comprised of three phases. In the Declaration the
plaintiff has formulated its claim in three
claims; claims one and
two relate to phase two of the development and claim three relates
to phase three.
In claim one the plaintiff claims an amount of R304,940.80, in claim
two it claims an amount of R131,727.00 and in claim three
it claims
R174,564.21. At the start of the proceedings I was informed that
the plaintiff no longer pursues claim 3.
The two remaining
claims are founded on proposals made by the plaintiff to the trust
in two letters, the first one dated 18 June
2004 and the second
dated 8 June 2006. In first proposal, the plaintiff offered to
render professional services, including design
work, for the
infrastructure
or
bulk services construction stage of the township at a fee of R650.00
for design work per residential site. There would also
be a monthly
fee of R35,000.00 for construction monitoring. In respect of claim
two the plaintiff was to perform additional engineering
work during
the house construction phase of the development at a specified
tariff of fees.
Most of the
evidence relating to how the plaintiff’s claim arises is common
cause.
Mr John Christopher Jones, a director of the plaintiff testified on
behalf of the plaintiff and Mr Mzukisi Banzana, the General
Manager
of the trust, testified on behalf of the trust.
The plaintiff rendered services in
respect of phase 2 during the period starting from September 2005 to
November 2006; the unpaid
fees relate to the period commencing from
May to November 2006.
The letters on
which the claims are founded were not the first communication
between the trust and the plaintiff.
When these letters were written, the two entities already had a
longstanding working relationship dating back as far as 1992.
The
Bethelsdorp North Township Development, however, started in 1996
when the trust was awarded the tender to develop the township
by the
Provincial Department of Housing and Local Government. The trust
then engaged the plaintiff to render engineering services.
The
plaintiff was therefore also involved in the development of phase 1
of the development until completion thereof and it was
duly paid for
the work that it did for that stage of the development.
Subsequent to
completion of phase 1 of the development the parties concluded an
agreement in terms of which the plaintiff was
appointed by the trust
to render engineering services in respect of phase 2. The terms of
the agreement between the plaintiff
and the trust in respect of
phase 2 of the development are set out in a letter dated 4 May 1999
addressed by the trust to the
plaintiff.
Those terms included that the plaintiff would be paid a fee of
R460.00 per site for design work. A delay in the implementation
of
the project resulted in work on the project only commencing in 2004.
It is this delay that caused the plaintiff to propose
that its
fees be revised. It is common cause that subsequent to the
proposals the plaintiff proceeded with its work in terms
of the
letter of appointment (4 May 1999) but charged its fees on the
proposed revised scale.
It is not in
dispute that the plaintiff did render the services in respect of
which it now seeks payment.
There is also no dispute about the quality of its workmanship.
In their plea the
defendants state that the operative
terms
of the agreement between the parties are contained in the letter of
4 May 1999. They plead that the proposal for a revision
of fees was
rejected by the trust in a letter dated 3 June 2004 and that the
offer made by the plaintiff in respect of claim
two (letter of 8
June 2006) was subject to the signing of a written agreement. They
dispute the existence of a duty on them to
speak in the event that
they did not agree to the proposal that the fees be revised. They
contend that all fees due to the plaintiff
were paid and that the
trust in fact erroneously overpaid the plaintiff in the amount of
R597,902.82. The overpayment was then
the basis for a counterclaim
by the trust against the plaintiff. However, after the close of the
defendants’ case, before
argument, the defendants abandoned the
counterclaim.
It is the plaintiff’s case is that,
in view of the past relationship between the parties, there was a
duty on the trust “to
speak” in the event of it rejecting the
proposals contained in its letters.
The six invoices
on which the plaintiff’s claim is based were the last invoices
issued by the plaintiff in respect of phase
2.
It is common cause that the amounts claimed in these invoices are
charged on the revised scale. It is also common cause that
the first
eight invoices which preceded the invoices in question, which were
also drawn on the revised scale, were paid by the
trust. These are
the payments which, according to the trust, were made in error and
resulted in the overpayment.
Mr Banzana
testified that he, in a letter dated 3 June 2004, rejected the
proposal that the fees be revised.
But he, being the person responsible for payment of the invoices
issued by the plaintiff paid them without having a close look
at
them and observing that they had been charged on an incorrect scale.
He had, however noticed the charge of R35,000.00 per
month charged
for construction management, which had not been part of the original
agreement, but, as he testified, that charge
did not bother him “as
there had been an agreement that construction management would be
charged on a monthly basis”. Towards
the end of the contract, when
the plaintiff pressed the trust for payment of its outstanding
moneys and ultimately issued a letter
of demand, he, having been
under the impression that the plaintiff had been paid in full, did a
reconciliation of the plaintiff’s
account and discovered that the
trust had, in fact, overpaid the plaintiff. He admitted that the
trust never responded in writing
to the proposal contained in the
plaintiff’s letter of 8 June 2006 (claim 2).
The letter dated 3
June 2004
,
on which the trust relies, was a response to an earlier proposal by
the plaintiff, in a letter dated 24 May 2004, that the fees
be
increased. The relevant portion of the letter dated 3 June 2004
says:
“
This
project is fully funded by the Provincial Housing Board in terms of
the National Housing Policy and that the Mzingisi Development
Trust
does not have any other funding to either subsidise or increase this
funding. The Mzingisi Development Trust is consequently
bound by this
policy which amongst other things stipulates the fixed amounts to
spend on the various professional consultants,
civil infrastructure
etc. There are further fixed and rigid stipulations regarding the
various drawdowns that must be made…
You
will recall that your letter of appointment dated 4 May 1999
stipulates among other things that your appointment was at risk
and
subject to the approval of our application and subsequent
availability of funds. You will further recall that Phase 1 had no

obstacles and as such this provision in your letter of appointment
could not be felt.”
The contents of
this letter are, in my view, vague. But assuming that the
intention was to reject the proposal for increased
fees as Mr
Banzana testified, the plaintiff, in its subsequent letter (18 June
2004) insisted that the fees needed to be revised
and went further
to suggest specific charges for specific items. In this letter the
plaintiff made it clear that the project
could not be implemented on
the fees agreed on previously. Consequently, it is what happened
subsequent to this letter (18 June
2004) that is relevant in this
matter.
In this regard Mr
Banzana’s evidence was that the trust, having rejected the
proposal for increased fees in its letter of 3
June 2004, deemed it
unnecessary to communicate its rejection to the letter of 18 June
2004.
However,
during cross examination Mr Banzana testified that the trust
registered its rejection of the proposal at meetings and
telephone
calls held subsequent to receipt of the letter of 18 June 2004.
Th
e
problem with this explanation is that there is no written recordal
of those meetings. Further, I can find no support for Mr
Banzana’s
evidence that after the payment of the first invoices he was of the
impression that the plaintiff had been paid in
full for its
services. I deal with this point more fully in the paragraphs that
follow.
I have difficulty
in understanding
how
Mr Banzana, having noticed that the plaintiff was charging an amount
of R35 000,00 which had not been part of the original
agreement, and
which was specifically first suggested in the letter of 18 June
2004, paid eight invoices without observing that
the charges were
based on the proposal made by the plaintiff. My view is that Mr
Banzana, being aware that the plaintiff had
insisted on the revision
of fees and having noted that it was charging in terms thereof in
respect of the construction and management
fee, must have been aware
that the charges were based on the proposed fee structure.
The total amount
paid by the trust in respect of the invoices issued by the plaintiff
was not in dispute during the hearing. Neither
was the calculation
of the amount which the plaintiff is claiming (apart from the fact
that the calculation was, according to
the trust
,
based on an incorrect scale). But nowhere in the correspondence with
plaintiff subsequent to the letter of
18 June 2004, does the
trust refer to its rejection of the proposal for revised fees and/or
to overpayment; instead in its letter
dated 2 October 2006 the trust
complains about interest which the plaintiff proposed to charge and
states that most of its funds
are “still tied with Bhisho”. No
mention is made that the plaintiff’s fees had been paid in full as
Mr Banzana suggested.
The letter of 2 October 2006 and numerous
others presented in evidence suggest that it was the practice of the
trust or, Mr Banzana,
to record, in writing, issues of relative
importance. The fact that there is no written confirmation of the
oral rejection of
this important issue or even the meetings or
telephone calls whereon the rejection of the proposals was expressed
does not accord
with probabilities. The evidence, in my view, proves
that the payments made were made with full awareness of the revision
which
had been effected to the original charges by the plaintiff. I
am therefore persuaded by the submission made by
Mr
Rorke
who appeared on behalf of the plaintiff, that Mr Banzana’s version
is wholly against improbabilities and that the trust never
rejected
the proposal by the plaintiff for revision of its fees.
On the assertion
in the letter of 3 June 2004, by the trust that it could not consent
to fees which exceeded the approved subsidy
amounts,
the
evidence was that when the subsidies were approved for the project
in 2002 provision was made for engineering design fees
of R650.00
which was the proposed fee in the letter of 18 June 2006.
Silence may amount
to acceptance of an offer in circumstances which give rise to a
“duty to speak” if the offeree is not prepared
to
accept
the offer.
1
This means that the offeree who remains silent on receiving an
offer, does so at his peril.
Wessels
on
Contract
2
says:
“
But
if there is a legal duty upon me to speak and I refrain from doing
so, the Court will presume that I assented. … Thus, if
a merchant
writes to his constant correspondent that he will forward to him
certain goods at a certain price unless he hears from
him to the
contrary, and the addressee receives the letter but neglects to
reply, the Court will consider that silence in such
a case gives
consent … The course of dealing between such merchants will
legitimately lead the offeror to conclude that his correspondent

would reply in case he rejected the offer, and the Court will infer
that if the offeree had not intended to accept he would have
answered
that he did not want the goods.”
In this case I am
satisfied that a relationship existed between the parties, giving
rise to the trust to speak if it did not consent
to the revised fee
suggested by plaintiff. The working relationship between the parties
was long
established;
it dates back to 1996 in respect of the Bethelsdorp North
Development, and as far back as 1992 in respect of other
projects.
Both parties were aware that the delay in implementing the project
had resulted in changes in the scope of work. In
all fairness the
four year delay would, in any sphere of life result in an escalation
in the costs of implementation. It is
common cause that prior to
the approval of the application by the trust to the Provincial
Housing Board, for subsidies in respect
of the development, the
plaintiff continued to render services at risk and that the
plaintiff assisted in the resolution of the
problems which had
caused the delay in the implementation of the project. The plaintiff
was, of course appointed at risk, as
it was emphasized on behalf of
the trust during the hearing; but the factors to which I refer prove
the existence of a working
relationship between the parties which
gave rise to the duty on the trust to communicate its rejection of
the proposals by the
plaintiff.
In respect of
claim 2
Mr
Nobatana
who appeared for the trust submitted that the agreement on which
claim 2 is founded had been conditional on it being reduced
to a
written agreement signed by the parties. This, however, is not
supported by the evidence. The evidence only proves that
the
plaintiff required that the trust sign the agreement which had been
reduced into writing. This was required for the plaintiff’s
own
records rather than for validation of the agreement.
In the same vein a
belated suggestion that the trust never needed the plaintiff’s
services in respect of claim 2 does not assist
the trust; it having
been common cause that the services had been rendered satisfactorily
and all that was in dispute was the
revision of the agrees fees
.
Consequently I order that the
defendants pay to the plaintiff:
The sum of
R304,940.80;
The sum of
R131
,727.00;
Interest of the
aforesaid amounts
a
tempore morae;
And costs of suit.
__________________________
N
DAMBUZA
JUDGE
OF THE HIGH COURT
1
Christie R
H; The Law of Contract in South Africa; 5
th
ed; at 66
2
2
nd
ed, at 74 paras 270-271