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[2011] ZAECPEHC 38
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Heaney and Another v Petersen (515/2009) [2011] ZAECPEHC 38 (6 September 2011)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE, PORT ELIZABETH)
CASE NO: 515/2009
Dates
Heard: 1 – 3 February 2011, 18 July 2011 & 19 August 2011
Date
Delivered: 6 September 2011
In the matter between:
BRENT RODGER HEANEY
….....................................................................
First
Plaintiff
SHAUN SMITH
…....................................................................................
Second
Plaintiff
and
JANICE PETERSEN
…....................................................................................
Defendant
________________________________________________________________
JUDGMENT
________________________________________________________________
KROON, J:
Introduction
The two plaintiffs (Mr Heaney and Mr
Smith) instituted action against the defendant for the recovery of
damages arising from the
latter’s alleged breach of
contractual obligations in respect of her duty to perform
conveyancing services in a proper
and professional manner, without
negligence and in accordance with the instructions of Heaney and
Smith.
Heaney and Smith were at all material
times, and are, members of a close corporation carrying on business
in Port Elizabeth as
estate agents under the style of Jack Allers
Group. The third member of the business was, and is, Mr Engelbrecht.
The relationship
between Heaney, Smith and Engelbrecht was described
as that of partners. They will at times be referred to as the
partnership
or the firm.
The defendant is an attorney and
conveyancer. At all times material to this matter she practised in
Port Elizabeth on her own
account under the style of Janice D
Petersen. She remarried on 28 November 2009, and is now Mrs Storer.
It will however be convenient
to refer to her in this judgment as
Mrs Petersen, the name under which she was cited, and referred to
during the evidence. She
subsequently ceased practising on her own
account and is now employed by another firm of attorneys.
Background
During November 2007 a Mr Njamela
approached the partnership with a request that he be engaged by the
firm with a view to his
being active as an estate agent in the Port
Elizabeth townships. The proposal made sense to the partners and
Njamela was taken
on board.
Thereafter, further agreement was
reached that a joint venture be commenced in which Njamela would
identify properties in the
townships for purchase and, after
renovations had been effected thereto, the properties would be
resold at a profit. The three
partners of the firm would advance the
purchase price of the properties and the cost of the renovations,
which would be overseen
by Njamela, and Njamela would thereafter
negotiate the sale of the properties. The
net profits
of each
transaction (after deduction of the purchase price and the cost of
renovations, which would be reimbursed to the partners,
and other
necessary deductions) would then be divided as to two-thirds to the
partnership and one-third to Njamela (and his wife,
to whom he was
married in community of property).
However, when the first such
transaction was in the offing Engelbrecht was ‘unavailable’,
and it was then decided
that only Heaney and Smith would be parties
to the transaction with Njamela (and to further such transactions
thereafter that
were envisaged), with two-thirds of the
net
profits
accruing to the former and one-third to Njamela. (The
two thirds share would however as between the three partners of the
business
be shared equally by them). In due course, subject to what
follows below, a number of such transactions were carried out.
Initially, the
modus operandi
adopted by the participants in the joint venture was the ploughing
back of the proceeds of a transaction towards the financing
of the
next transaction.
However, when the transaction was
concluded which was the origin of the dispute with which this
judgment is concerned (as to which,
see below), a different
arrangement was in place: the
net proceeds
of the sale of the
property (the deductions not to include any amounts advanced in
respect of the purchase price or the costs
of renovations) were to
be divided as to two-thirds for Heaney/Smith and one-third for
Njamela. Other than the statements that
there was to be no ploughing
back of monies received for the purpose of financing any further
transaction, and that the transaction
in question would be the first
in which the participants would reap the rewards of the joint
venture in the sense of actually
being paid out what accrued to them
from a transaction, there was no elucidation of the
raison d’etre
of this different arrangement. Be that as it may.
Towards the end of 2007 Njamela
attended at the offices of Mrs Petersen and introduced himself to
her. He was already acquainted
with Mrs Kolesky, the conveyancing
clerk in Mrs Petersen’s office, who had advised him that she
was employed by Mrs Petersen
and had also asked him to bring work to
Mrs Petersen. Adverting to the fact that Mrs Petersen was a woman of
colour and observing
that purchasers/sellers of properties in the
townships would be more comfortable dealing with a professional
person of colour,
Njamela enquired whether Mrs Petersen would be
interested in undertaking the conveyancing work in respect of the
transfers of
properties in the townships. Mrs Petersen indicated
that she was willing to do so. When the joint venture was commenced
Heaney
and Smith agreed to continue making use of the services of
Mrs Petersen. She thus became the conveyancer who attended to the
transfers in respect of the transactions entered into by the joint
venture (as well as other transactions concluded by Njamela
on his
own account).
After the commencement of Njamela’s
association with the partnership, the partners loaned and advanced
to him various sums
of money (which were said to be for private
purposes). The evidence indicated that the total sum involved was
substantial. (According
to Heaney the amount could have been as much
as R98,000.00).
At a stage the association between
Njamela and the partnership came to an end, but when, and the
circumstances under which this
occurred, were not elucidated in
evidence (save that Engelbrecht stated that it was consequent upon
the transaction in question
that relations between Njamela and the
partnership soured, although Heaney stated that in June 2008
relations between the partnership
and Njamela were still fine). The
loans in question were never recovered by the firm from Njamela,
and, indeed, the particulars
of claim filed in the present
proceedings embraced the allegation that Njamela was a man of straw
and unable to repay what he
owed to the partnership. During the
evidence reference was made to the service on the partnership on 11
September 2008 of a garnishee
order issued by the magistrate of Port
Elizabeth on that date (exhibit D), which reflected that Njamela,
the debtor in question,
only had assets of R5,000.00 and was
hopelessly insolvent. The partnership in fact issued summons against
Njamela for the recovery
of his indebtedness to it, but no
attachment of assets belonging to Njamela was possible. (It was not
clear whether the sum claimed
from Mrs Petersen in the present
proceedings was included in the summons issued against Njamela).
The evidence of Engelbrecht, Heaney
and Smith was to the effect that initially the partnership perceived
the association with
Njamela as holding prospects of being a
financially rewarding one for the partnership.
The transaction in question
On 27 April 2008 the joint venture
sold erf 3488 Ibhayi to a Mr and Mrs Lings (who were married in
community of property) for
the sum of R215,000.00. Transfer of the
property into the name of the Lings’s was effected on 24 June
2008, Mrs Petersen
having attended to same.
On 10 July 2008 Mrs Petersen
submitted a statement of account to Heaney and Smith in respect of
the transaction (exhibit B20).
It read as follows:
‘
DEBIT
CREDIT
By Bond proceeds
R205,000.00
By amount received from
Mr Lings 7,500.00
To outstanding rates
255.13
To amount paid to
Prestige Auto Sales 195,000.00
To amount paid to Boqwana
(Johnson
Undertaking) 5,000.00
To available for payment
12,244.87
TOTAL 212,500.00
215,500.00’
The plaintiffs’ cause of
action and the defence thereto
As the statement of account reflected
it embraced an accounting in respect of a total sum of R212,500.00,
and not the sum of R215,000.00
for which the property in question
was in fact sold. The evidence for Heaney and Smith did not explain
the difference between
the two figures. Mrs Petersen ventured
alternative possible explanations therefor (because of the passage
of time she was uncertain
on the issue). It is however unnecessary
to consider this aspect further. It was not suggested that the issue
affected the claim
Heaney and Smith sought to enforce.
Similarly, it was not suggested that
the amount of R5,000.00 paid to Boqwana (ie the attorneys firm of
Boqwana Loon & Connellan)
in respect of the Johnson undertaking,
did not constitute a valid debit.
What was in issue was the legitimacy
of the payment of R195,000.00 to Prestige Auto Sales. Before I
consider the evidence and
counter evidence on this score I should
record that in their particulars of claim Heaney and Smith claimed
payment of the sum
of R130,000.00 (2 x R65,000.00), being two-thirds
of the sum of R195,000.00. At the hearing Mr
Beyleveld
, for
Heaney and Smith, advised me however that the claim was in fact
limited to the sum of R125,918.38 (the figure reflected
in a letter
addressed by Engelbrecht to Mrs Petersen on 12 September 2008, which
will be referred to in detail later). This figure
was arrived at as
follows: R212,500.00 – (R255.13 and R5,000.00) = 207,244.87 x
⅔ = R138,163.25 – R12,244.87
= R125,918.38.
It was common cause between the
parties that on 13 May 2008 Mrs Kolesky telephoned Heaney and a
conversation between them took
place. It was not in dispute that it
was Heaney who, on behalf of himself and Smith, liaised with the
office of Mrs Petersen
and held Smith’s mandate to make
decisions binding on both of them. (Smith did, however, also attend
at the office of Mrs
Petersen when powers of attorney in respect for
the transactions of the joint venture required to be signed).
Heaney’s evidence of the
conversation between himself and Mrs Kolesky was to the effect that
the latter advised him that
Njamela wished to purchase a motor
vehicle from a motor dealer styled Continental Cars, and she
enquired whether Heaney would
give authorisation for Mrs Petersen to
furnish Continental Cars with an undertaking of payment of money out
of the proceeds of
the transaction in question. No amount was
mentioned, however. He, Heaney, advised Mrs Kolesky that she could
give an undertaking
to Continental Cars as long as it did not
involve an amount that exceeded Njamela’s one third share of
the net proceeds.
Mrs Kolesky’s evidence on the
other hand was that she mentioned a specific amount to Heaney,
namely R174,000.00, and it
was for an undertaking to Continental
Cars to pay that amount out of the proceeds in question that she
sought Heaney’s
authorisation. That authorisation was
forthcoming, with Heaney jokingly making the comment: ‘I
suppose we must allow the
boss his privileges’.
Mrs Kolesky’s further evidence
proceeded as follows. She advised Mrs Petersen that Heaney had
authorised an undertaking
to Continental Cars for payment of the sum
of R174,000.00 out of the proceeds in question. She overheard Mrs
Petersen thereafter
speaking to Heaney on the telephone to obtain
confirmation of the mandate. She then typed a letter to Continental
Cars which,
after signature by Mrs Petersen, was sent by hand to
Continental Cars. The letter (exhibit B17), dated 13 May 2008, read
as follows:
‘
OUR
TRANSFER NJAMELA & OTHERS TO S & N LINGS
ERF 3488 IBHAYI
With reference to the
above and further to previous correspondence herein we hereby
undertake to pay to yourselves the sum of R174,000.00
(ONE HUNDRED
AND SEVENTY FOUR THOUSAND RAND) on date of registration of the above
transaction.
Thanking you for your
kind co-operation.’
Mrs Petersen testified that she did
not have a clear recollection of the events in question (explaining
that the mandate given
by Heaney on 13 May 2008 did not become the
subject of the claim of Heaney and Smith against her). She
confirmed, however, that
she would have secured Heaney’s
confirmation of the mandate prior to furnishing Continental Cars
with the undertaking,
either by telephone or in a conversation face
to face, as it was her invariable practice to obtain confirmation
herself from
the client in question before she issued any
undertaking to a third party in respect of a payment out of the
proceeds of any
transaction where the conveyancing work was done by
her.
Heaney denied that there was any
telephone or other conversation between himself and Mrs Petersen in
respect of the undertaking
to be furnished to Continental Cars.
Heaney further denied that there was
any subsequent telephone conversation between himself and Mrs
Kolesky or between himself
and Mrs Petersen regarding a replacement
undertaking to be furnished to another motor dealership styled
Prestige Auto Sales.
Mrs Kolesky testified however that on
4 June 2008, and at Njamela’s request, she again telephoned
Heaney, this time to secure
a replacement mandate. She advised
Heaney that Njamela was not proceeding with the purchase of a
vehicle from Continental Cars,
but instead wished to purchase a
different vehicle from Prestige Auto Sales. An undertaking for
payment of the sum of R195,000.00
was, however, required, and she
sought Heaney’s authorisation for such undertaking to be
furnished, payment to be made
out of the proceeds of the transaction
in question. Heaney gave the authorisation sought, this time
commenting: ‘
The bastard is driving a better car
than what I am driving
’.
Again, she advised Mrs Petersen of
the mandate given by Heaney and, again, she overheard Mrs Petersen
speaking on the telephone
to Heaney to obtain confirmation of the
authorisation. Thereafter, a letter (exhibit B19) signed by Mrs
Petersen was addressed
to Continental Cars withdrawing the earlier
undertaking, and on the same date a further letter (exhibit B19A),
signed by Mrs
Petersen, was addressed to Prestige Auto Sales, which
read as follows:
‘
OUR
TRANSFER SMITH HEANEY & NJAMELA TO S & N LINGS
ERF 3488 IBHAYI
With reference to the
above we hereby irrevocably undertake to pay to yourselves the sum of
R195 000,00 (ONE HUNDRED AND NINETY
FIVE THOUSAND RAND) on date
of registration of the above transaction.
We confirm that all
conditions have been met and our documentation has been forwarded to
our Cape Town correspondents for lodgement.
We anticipate
registration to take place on or about the 13
th
June 2008.
Thanking you.’
Mrs Petersen confirmed the evidence
set out in the preceding paragraph and added that when Heaney
confirmed the authorisation
to her he made the comment ‘I
suppose (or guess) we don’t have a choice.’ Hence, in
due course, the payment
by her to Prestige Auto Sales of R195,000.00
as reflected on the statement of account she rendered to Heaney and
Smith.
The essence of the dispute between
the parties is accordingly whether or not Heaney (on behalf of
himself and Smith) gave the
authorisation to Mrs Petersen alleged by
the latter and Mrs Kolesky. Only if this question is answered in the
negative can Heaney
and Smith succeed in the action.
Onus and credibility
Counsel were agreed, and correctly
so, that Heaney and Smith bore the onus of proving the terms of the
contract on which they
sued. This included proof of the negative
that no authorisation was given for the undertaking furnished by Mrs
Petersen to Prestige
Auto Sales and the implementation thereof.
Reference may be had to two decisions
relating to the approach to be adopted in assessing the credibility
of a witness and whether
the onus has been discharged. The headnote
in
National Employers’ General Insurance Co Ltd v Jagers
1984 (4) SA 437
(E) reads as follows:
‘
In
deciding whether the plaintiff has discharged the
onus
of proof, the estimate of the credibility of a witness will be
inextricably bound up with a consideration of the probabilities
of
the case and, if the balance of probabilities favours the plaintiff,
then the Court will accept his version as being probably
true. If
however the probabilities are evenly balanced in the sense that they
do not favour the plaintiff’s case any more
than they do the
defendant’s, the plaintiff can only succeed if the Court
nonetheless believes him and is satisfied that
his evidence is true
and that the defendant’s version is false. It is not desirable
for a Court first to consider the question
of the credibility of the
witness and then, having concluded that enquiry, to consider the
probabilities of the case, as though
the two aspects constitute
separate fields of enquiry.’
In
Stellenbosch Farmers’
Winery Group Ltd and Another v Martell Et Cie and Others
2003
(1) SA 11
(SCA), paragraph 5, the following was stated:
‘
[5]
On the central issue, as to what the parties actually decided, there
are two irreconcilable versions. So, too, on a number of
peripheral
areas of dispute which may have a bearing on the probabilities. The
technique generally employed by courts in resolving
factual disputes
of this nature may conveniently be summarised as follows. To come to
a conclusion on the disputed issues a court
must make findings on
(a)
the credibility of the various factual witnesses;
(b)
their reliability;
(c)
the probabilities. As to
(a)
,
the court’s finding on the credibility of a particular witness
will depend on its impression about the veracity of the witness.
That
in turn will depend on a variety of subsidiary factors, not
necessarily in order of importance, 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, (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 or
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 its 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 will prevail.’
Assessment
The preliminary observation should be
made that much of Engelbrecht’s evidence was of a hearsay
nature, having been based
on what Heaney or Smith had conveyed to
him. To that extent his testimony could not be invoked for the
purpose of establishing
the truth of what was conveyed to him.
I am aware of the oft-quoted dictum
that demeanour in the witness box is a tricky horse to ride as an
indicator of the credibility
of the witness. As reflected in
SWF
Group
it nevertheless remains a factor. I accordingly record the
following. Engelbrecht and Heaney made a neutral impression on me.
The same comment applies to Smith save that it may be added that at
times he was somewhat nervous (a factor however which does
not merit
emphasis) and that on occasion his evidence was contradictory and
confusing. A further witness called on behalf of
Heaney and Smith
was attorney de Lange. As will appear later however no issue depends
on de Lange’s credibility.
Mrs Petersen impressed me favourably
as regards her candour and general demeanour in the witness box. The
fact that she testified
that her recollection of certain
alleged
events was either vague or non-existent was not, in my view, any
derogation from her credibility. On the contrary, the fact that
she
did not resort to denials in respect of certain of these events,
where same would have advanced her case, enhanced her credibility.
Mrs Kolesky (who attended a pre-trial
consultation during a lunch break after the case for Heaney and
Smith had been closed and
immediately prior to her entry into the
witness box, which preceded Mrs Petersen’s testimony) also
impressed me favourably
with her general demeanour in the witness
box, and, a factor that should not be overstated, the confidence
with which she gave
her testimony (although, as will appear below,
her evidence was not without blemish). As will be recorded later,
Mrs Kolesky
stands accused of having embezzled substantial sums of
money from Mrs Petersen during her employment with the latter. Mr
Beyleveld
submitted that this accusation was a factor that I
should take into account as bearing on Mrs Kolesky’s
credibility. I
am not persuaded, however, as to how Mrs Kolesky’s
credibility is affected by the accusation.
It would be convenient at this stage
to set out certain correspondence that passed between the parties.
(a) Exhibit A14, dated 12 August 2008,
addressed by Engelbrecht to Mrs Petersen, read as follows:
‘
Re
– MOFFAT NJAMELA
Please confirm in writing
that at this stage you will hold any and all funds pertaining to all
deals that you have where Mr Moffat
Njamela is involved including
distributions, sales commissions and third party guarantees. We have
requested an urgent meeting
with Mr. Njamela for tomorrow morning
where after we will be in a position to advise you further.’
(b) On 12 September 2008 Engelbrecht
addressed exhibit A9 to Mrs Petersen, which read as follows:
‘
TRANSFER
SMITH, HEANEY & NJAMELA TO LINGS: ERF 3488 IBHAYI
We refer to the above
matter and advise as follows:
We allege that you had
incorrectly given an undertaking to Prestige Auto Sales on behalf of
one M Njamela for the amount of R195 000.
Your offices were
advised telephonically that an undertaking may be issued based only
on Moffat Njamela’s share of the proceeds
of the above
mentioned deal. From your statement dated 10 July 2008, it is clear
that the amount paid over far in exceeds Mr Njamela’s
share of
the proceeds.
The total amount
available for distribution was R207 244.87. Of this Mr Njamela
was entitled to one third (being a one third
owner) amounting to
R69 081.62. We allege that you have thus paid over an amount of
R125 918.38 with no authority from
the two remaining
parties/recipients to the proceeds. Smith and Heaney hereby demand
that you settle the amount that is due to
them forthwith.
Should they not receive
settlement of this amount, then they will have no further alternative
but to proceed with the matter and
if need be approach the Law
Society with the evidence that they possess. We trust that this will
not be necessary and that you
will honour the amount due. You are
hereby required to make good the amount by no later than the close of
business on Monday 15
th
September 2008. The money can be
deposited into the Jack Allers bank account, which details you have
on file. Kindly fax through
proof of payment to our offices.
Further to that we
request the title deeds for erf 55950 and erf 12931 Ibhayi. The same
can be delivered to our offices or we can
collect. Please advise.’
(c) On 15 September 2008 Mrs Petersen
addressed a letter to the Jack Allers Group in which it was stated
that Mrs Petersen was away
and would respond shortly to the letter
referred to in (b).
(d) On 15 September 2008 Engelbrecht
addressed exhibit A10 to Mrs Petersen, which read as follows:
‘
TRANSFER
SMITH, HEANEY & NJAMELA TO LINGS: ERF 3488 IBHAYI
With reference to the
above and further to your letter dated 15 September 2008, we remind
you that that during a telecon that took
place at 11h56 on 12
September 2008 between Gary Engelbrecht and yourself, you agreed to
pay the amount of R125 918.38 over
to us by close of business
today.
We hereby advise that we
grant an extension of such payment deadline until 12h00 on the 17
th
of September 2008. Kindly fax proof of payment to our
offices.’
(e) Mrs Petersen responded on 22
September 2008 via exhibit A11, reading as follows:
‘
TRANSFER
SMITH HEANEY & NJAMELA TO LINGS
ERF 3488 IBHAYI
With reference to the
above and further to previous correspondence herein we confirm that
your Mr Heaney authorised our firm on
13 May 2008 to issue an
undertaking in favour of Continental Cars in the sum of R174 000,00
on behalf of Mr Njamela and the
amount was clearly stated to him.
Furthermore we confirm
that our offices again contacted your Mr Heaney on 4 June 2008
advising him that Mr Njamela requested us
to withdraw from the
abovementioned undertaking as he cancelled the transaction and that
he requested us to issue an undertaking
in favour of Prestige Auto
Sales in the sum of R195 000,00. Your Mr Heaney authorised this
undertaking to the writer hereof
and one of our employees without any
mention of any restrictions in respect of shareholding.
In view of the above we
are of the opinion that your Mr Heaney, who was acting on behalf of
the joint venture, authorised issuing
of the undertaking in the
amount of R195 000,00 without setting any limitations.’
(f) Exhibit C20 was a letter dated 26
August 2008 addressed by Heaney to Mrs Petersen. It read as follows:
‘
MATTERS
PERTAINING TO MOFFAT NJAMELA DEALS
With reference to our
telecon today, we confirm that the R42000.00 held by yourselves as a
guarantee to Jack Allers, will be paid
over to us by close of banking
hours today. We further request proof of deposit of said amount to be
faxed to us.
With reference to the
Stoffel transfer, kindly deduct the R2500.00 outstanding against the
R5000.00 I.P.Johnson money and effect
payment to Mr Stoffel. We
request that the balance, being R2500.00, be refunded to us together
with the above-mentioned R42000.00.’
It may also be recorded that the
undertaking to Boqwana Loon & Connellan in respect of the
Johnson transaction (paragraph
16 above) was furnished by Mrs
Petersen by way of exhibit B18, a letter dated 16 May 2008 reading
as follows:
‘
OUR
TRANSFER NJAMELA & OTHERS TO S & N LINGS
OUR BOND S & N LINGS
/ STANDARD BANK
ERF 3488 IBHAYI
With reference to the
above and further to previous correspondence herein we hereby
undertake to pay to yourselves the sum of R5 000,00
(FIVE
THOUSAND RAND) on date of registration of the above transaction.
We confirm that the
clients have signed the transfer and bond documents, all conditions
have been met and as soon as we are in receipt
of the transfer duty
receipt we shall proceed with lodgement.
Thanking you for your
kind co-operation.’
Exhibit G was a record
inter alia
of telephone calls made from Mrs Petersen’s office during part
of June 2008, the correctness of which was formally admitted
by Mr
Beyleveld
on behalf of Heaney and Smith. Included among the
calls recorded were three calls made to the office of the Jack
Allers Group
on 4 June 2008, namely at 10h16 (duration: 2 minutes 3
seconds), 10h20 (duration: 1 minute 18 seconds) and 10h22 (duration:
51
seconds). A further call was made to the cellphone of Heaney at
10h24, which lasted 52 seconds.
In elucidation of the statement in
exhibit A10 that Mrs Petersen had agreed during a telephone
conversation with Engelbrecht on
12 September 2008 to pay the sum of
R125,918.38 to the Jack Allers Group (paragraph 36(d) above) it may
be recorded that it was
common cause that after receipt of
Engelbrecht’s letter of 12 September 2008, exhibit A9
(paragraph 36(b) above), Mrs Petersen
telephoned Engelbrecht and
said to him that she would effect payment of the said sum.
Mrs Petersen furnished the following
explanation of the circumstances under which she made the statement.
She was at the time
under very severe emotional stress. She had
shortly before, approximately at the end of August 2008, received
information that
her five year old son had been diagnosed with an
incurable disease which would very seriously disable him or even
cause his death.
As a divorcee she was a single mother and the news
‘totally shattered her’ and she felt that ‘her
life was
busy crumbling’. The situation was exacerbated by a
further contributory factor. There was, as she put it, a financial
drain on her legal practice, financially her practice was failing
and she did not know the reason therefor. It was only later that
she
was advised by her auditors that Mrs Kolesky had been defrauding her
and had embezzled in excess of a million rand. During
September 2008
she ‘did not want to carry on anymore’ and confirmed in
answer to a question by me that her emotional
condition was such
that she could not make a decision that was valid in law. At no
stage had she entertained the thought that
she had done anything
wrong and the statement made to Engelbrecht was dictated by her
emotional condition, simply to make something
that she was in no
condition to deal with, go away.
She thereafter consulted her parents
who advised her not to pay something she did not owe. She also
sought legal advice from her
attorney. Exhibit A11, her letter to
the Jack Allers Group on 22 September 2008 (paragraph 36(e) above)
followed.
The particulars of claim filed on
behalf of Heaney and Smith did not make out any cause of action
based on an alleged acknowledgement
of debt and Mr
Beyleveld
acted responsibly in adopting the stance during argument that he was
not seeking to suggest that Mrs Petersen was bound by the
statement
in question. He pitched his argument no higher than the submission
that the statement was a factor to be considered.
I am not so
persuaded. There was no challenge offered to Mrs Petersen’s
evidence as to the emotional state in which she
was at the relevant
time. I accept same. In the circumstances no adverse inference is to
be drawn against her based on the statement
in question.
In respect of the telephone records
counsel made two submissions. First, he pointed out that exhibit G
went no further than recording
that the four telephone calls in
question were in fact made, and he argued that they did not disprove
Heaney’s denial that
he had any conversation on 4 June 2008
with either Mrs Kolesky or Mrs Petersen concerning a replacement
undertaking to be furnished
to Prestige Auto Sales, to which he
added the query whether, specifically the call to Heaney’s
cellphone, was of sufficient
duration for confirmation of an alleged
authorisation for an undertaking to be secured.
Of course, telephone records do not
canvass the content of telephone calls, but it is not to be gainsaid
that exhibit G is consistent
with the defence evidence that there
were two telephone conversations with Heaney on 4 June 2008, one by
Mrs Kolesky and the
other by Mrs Petersen, concerning authorisation
by the former for an undertaking, and to that extent offers support
for the defence
evidence. I am also not persuaded there is any merit
in counsel’s query whether a telephone conversation of 52
seconds
duration was long enough for confirmation of authorisation
to be secured by Mrs Petersen from Heaney.
The second submission, if I
understood it correctly, was that while exhibit G was incorporated
into the defence case, conspicuous
by its absence was any record of
telephone calls made from Mrs Petersen’s office on 13 May
2008, which could have served
the purpose of establishing that there
was more than one call to Heaney, and hence a possible second call,
one from Mrs Petersen,
to obtain confirmation of the alleged
authorisation for the undertaking furnished to Continental Cars. The
failure by the defence
to produce telephone records relating to 13
May 2008 required to be seen in the light of the proposition put to
Mrs Kolesky (which
was confirmed by her) that the phone records
would establish whether or not there was a second call to Heaney on
the day in question.
Developing his argument counsel submitted that
the inference to be drawn from the failure of the defence to produce
the phone
records in question was that Mrs Kolesky and Mrs Petersen
had lied about the events on that day; and if they lied about that
they could easily also have lied about the alleged events on 4 June
2008.
I cannot uphold the argument. Apart
from the fact that the quantum leap from a failure to produce phone
records to a finding of
mendacity is one that, in my view, would not
be justified, the argument loses sight of the incidence of the onus.
As already
recorded Heaney and Smith bore the onus of establishing
the terms of the relevant contractual arrangement including
disproving
terms that the defence averred were there but which
Heaney denied. It was open to Heaney and Smith to adduce evidence of
telephone
records, either those relating to the telephones of the
Jack Allers Group/Heaney’s cellphone or alternatively those
relating
to the telephones of the office of Mrs Petersen. If
anything, an adverse inference would be drawn against Heaney and
Smith, as
the onus bearing parties, for their failure to adduce
evidence of relevant telephone records. For the purposes of the
present
judgment I will restrict my approach to a finding that
Heaney and Smith took the risk that the evidence they did adduce
would
in the result prove to be insufficient to carry the day in
their favour.
Similar comments apply to Mr
Beyleveld’s
attempt to make capital out of the fact
that the defence had not tendered the evidence of the then
receptionist in Mrs Petersen’s
office who, on the defence
evidence, put through the telephone call which Mrs Petersen alleges
she made to Heaney. Counsel pointed
out that there was no evidence
that the receptionist was not available. On the other hand there was
no evidence that she was
available. She would in any event have been
requested to testify about events that happened some years ago and
what weight her
evidence could have carried is a matter for
speculation. At worse for the defence case, a risk was taken that
the defence evidence
adduced might prove to be insufficient to carry
the day for the defence.
Play was sought to be made of the
fact that although transfer of the property in question into the
names of the Lings’s
was effected on 24 June 2008 the relevant
statement of account was only submitted on 10 July 2008 (paragraphs
13 and 14 above).
It was pointed out that the usual practice of
conveyancers was to advise the client as soon as transfer had been
effected and
to render an account expeditiously thereafter. The
defence evidence was that Heaney had requested that the rendering of
accounts
be held back until all ‘linked’ transactions
had been completed and the various statements of account could then
be rendered together. It appears that the word ‘linked’
was used loosely, not in the sense that the transactions were
interrelated, but merely in the sense that they were roughly
contemporaneous. This explanation was challenged. I find it
unnecessary
to resolve the dispute. I am unable to draw any
inference from the alleged delay in submitting the account that
bears on the
issue of which side was telling the truth as to whether
or not Heaney gave the authorisation for the undertaking to be given
to Prestige Auto Sales. The rendering of an account was not
avoidable, it would inevitably have followed and an accounting which
disclosed a payment of R195,000.00 to Prestige Auto Sales was
likewise inevitable.
An aspect that was strongly stressed
by counsel in argument was the fact that Mrs Petersen had not sought
written confirmation
from Heaney of his authorisation for the
undertaking to be given, or at least addressed a written
communication to Heaney placing
on record that he had given the
authorisation. It was in this regard that the witness de Lange
referred to guidelines issued
by the Law Society that reflected that
such written confirmation should be secured. In de Lange’s
view the obtaining of
written confirmation of an authorisation to
pay out proceeds of a property transaction to a third party was not
only a prudent
course to adopt; failure to do so would in fact
constitute negligence on the part of the conveyancer. The witness
went so far
as to state that even where there was no dispute at all
as to whether authorisation had been given, and the client in fact
subsequently
confirmed that authorisation for an undertaking to be
given and implemented had been granted and no issue arose on that
score,
the conveyancer would still be painted with the brush of
negligence if he/she had not secured written confirmation of
authorisation
in respect of an undertaking to a third party prior to
implementing the undertaking. (It would seem that he was propounding
‘negligence
in the air’).
Mrs Petersen conceded that it was
prudent practice to secure written confirmation of authorisation for
an undertaking to a third
party, and that was in fact her usual
practice. (Mrs Kolesky gave evidence of a similar ilk, and I will
return later in another
context to consider related aspects of her
evidence on this score). Mrs Petersen testified, however, that
consequent upon the
course of dealings between herself and
Heaney/Smith a position of trust had developed and she was
accordingly persuaded that
she could act on the oral authorisation
that Heaney had given her. There had in fact been other oral
authorisations given and
no disputes had arisen in respect of the
implementation of the undertakings in question.
While not disputing that there had
been other oral authorisations given by him Heaney sought to suggest
that there had also been
authorisations given in writing. Afforded
an opportunity to produce the relevant documentation, he was only
able to produce exhibit
C20 (paragraph 36(f) above). This letter,
however, dealt with other matters and was dated 26 August 2008,
after the events with
which this judgment is concerned.
Mr
Beyleveld
, correctly, did
not seek to argue that the mere fact that Mrs Petersen had not seen
to it that written confirmation of the alleged
authorisation
attributed to Heaney had come into existence constituted negligence
entitling Smith and Heaney to the judgment
they sought. The issue
remained whether the authorisation in question was in fact given.
His submission was, however, that in
the light thereof, first, that
the obtaining of written confirmation was admittedly a prudent
practice; second, that obtaining
such confirmation was the practice
usually followed by Mrs Petersen; third, that the amount of the
undertaking was in a substantial
figure, I should have regard to the
fact of an absence of written confirmation as having a bearing on
the question whether Mrs
Petersen truthfully testified that she
personally had secured Heaney’s oral confirmation that he had
authorised the undertaking
to Prestige Auto Sales.
The validity of the submission is not
to be gainsaid. The omission by Mrs Petersen to secure written
confirmation of the alleged
authorisation conveyed orally to her by
Heaney is clearly a factor to be thrown into the melting pot and be
weighed together
with the other evidence and counter evidence on the
issue in question.
I turn to deal with a particular
aspect of Mrs Kolesky’s evidence. She painted a picture of
Njamela having made what can
only be described as a terrible
nuisance of himself during the period preceding the obtaining of
Heaney’s authorisation
for the undertaking to be given to
Prestige Auto Sales. He, as it were, camped out in the office for
some days while he waited
for the undertaking, which he was
personally to take to Prestige Auto Sales. His pestering of her ‘het
my mal gemaak’.
On 4 June 2008, the day on which authorisation
was in fact sought and obtained and the undertaking was given,
Njamela had sat
himself down in the offices and intimated that he
would not budge until he had received the undertaking. She therefore
eventually
picked up the telephone to speak to Heaney and request
the authorisation. Her evidence continued as follows. After securing
Heaney’s
authorisation she advised Mrs Petersen thereof and
thereafter prepared a letter of undertaking to Prestige Auto Sales
for signature
by Mrs Petersen. The latter was however busy
consulting with clients and Njamela had perforce to wait for some
hours before Mrs
Petersen could attend to the matter. After Mrs
Petersen signed the undertaking, it was handed to Njamela who left
with it. He
was in such a hurry that there was no time to prepare a
written letter of confirmation.
Mr
Beyleveld
roundly
criticised portions of this evidence, with justification. Whatever
other pressures of work Mrs Kolesky laboured under,
and in the light
of the alleged substantial nuisance that Njamela was making of
himself, one fails to understand why she did
not earlier simply pick
up the telephone to contact Heaney, a very simple procedure. It is
clear that Mrs Kolesky was guilty
of gross exaggeration as to what
pressures Njamela subjected her to. Her comment about a written
letter of confirmation could
at best only have referred to the
period before Njamela left the office – nothing prevented a
letter of confirmation being
prepared subsequently.
However, after giving this aspect
anxious consideration, I am not clear as to how far it assists
Heaney and Smith in the prosecution
of their case. It seems to me
that it can only be in respect of the argument that on the first
occasion when Heaney’s authorisation
was sought on 13 May 2008
Kolesky had planned a fraudulent scheme
vìs-a-vìs
Heaney/Smith as well as Mrs Petersen, and that on the second
occasion she planned a similar fraud, but was hesitant to implement
it until Njamela wore her resistance down. (I return later to
consider in more detail the imputation of fraud, in and about her
contact with Heaney, levelled against Mrs Kolesky in argument).
Part of one aspect of the dispute
between Heaney and Mrs Petersen as to alleged relevant telephonic
communications between them
may at this stage be dealt with shortly.
Apropos Mrs Petersen’s statement that when she telephoned
Heaney to seek his confirmation
of the authority for an undertaking
to be furnished to Prestige Auto Sales, he made a comment to the
effect that ‘they’
had no choice in the matter, Heaney
stamped the evidence as being ridiculous, pointing out that it was
‘their’ money
and that ‘they’ were entitled
to deal therewith as they wished.
Heaney misinterpreted Mrs Petersen’s
statement. It was not intended to convey that in law Heaney and
Smith were obligated
to assist Njamela and had no alternative, but
rather that, for reasons Heaney did not disclose, he felt that
Njamela should be
given assistance. The statement was accordingly
not ridiculous, and in the light of the discussion which follows
below, it in
fact had the ring of truth.
Heaney testified that having gleaned
from Njamela that transfer of the property in question into the
names of the Lings’s
had been effected, he contacted Mrs
Kolesky and enquired ‘
when we can expect our
payment because obviously we’re anxious for it, and she
advised me that she would send the statement
of account’
.
He further explained that the partnership had ‘run a schedule
on each property’ setting out the expenses incurred
and he
wanted to know what amount would be paid out so that same could be
cross-referenced with the schedule (his expectation
being a sum of
approximately R125,000.00). On his enquiry on that score Mrs Kolesky
mentioned a figure of R12,000.00 odd. He
testified that this shocked
him and he queried how that was possible. Mrs Kolesky responded that
there had been an undertaking
to a dealership in the sum of
R195,000.00. He asked whence the authority for the undertaking to
which Mrs Kolesky replied that
he, Heaney, had given the
authorisation. His rejoinder was that that was impossible. He
directed Mrs Kolesky to forward the statement
of account as soon as
possible.
Mrs Kolesky’s evidence
confirmed that Heaney telephoned her, but stated that it was after
she had submitted the statement
of account to Heaney and Smith. He
expressed dissatisfaction with the amount that was to be paid out.
She responded by expressly
saying: ‘
Brent, can’t
you see the amount of the undertaking has been taken off because
that is what we paid over on behalf of Mr
Njamela which you
consented to’.
She later indicated that Heaney disputed
her statement. She further advised him that if he was dissatisfied
he should take the
matter up with Mrs Petersen.
Adverting to the letter exhibit A14
addressed by Engelbrecht to Mrs Petersen on 12 August 2008
(paragraph 36(a) above) Mr
Beyleveld
argued that there must
have been a background thereto which served as the context in which
the letter was written. That submission
was acceptable, so far as it
went. It was the context that counsel contended for that was the
subject of debate during argument.
Ms
Potgieter
, for Mrs
Petersen, argued that the context of the letter was the attempts
envisaged by the partnership to seek from Njamela payment
of what he
owed it, including that portion of the proceeds of the transaction
in question that had accrued to Heaney and Smith
but which had
formed part of the amount paid to Prestige Auto Sales for the
benefit of Njamela.
The argument on behalf of Smith and
Heaney was that the context was not restricted to envisaged
endeavours to recover monies from
Njamela, but also embraced the
claim made by the partnership that Mrs Petersen was liable to it
based on the averment that she
had implemented an undertaking in
favour of Prestige Auto Sales which had not been authorised by
Heaney.
Heaney’s evidence was that
after receipt of the statement of account sent to him by Mrs Kolesky
pursuant to their earlier
telephone conversation, he discussed the
matter with Smith and it was decided that contact should be made
with Mrs Petersen to
find out how it was possible that ‘
an
undertaking relating to our money could be paid out to somebody
without our permission.’
He telephoned Mrs Petersen and
raised the issue with her. Her response was that Mrs Kolesky had
advised her that he, Heaney,
had given consent for the undertaking.
His rejoinder was that Mrs Kolesky was lying.
A meeting was thereupon arranged at
which Heaney, Smith and Engelbrecht met with Mrs Petersen. The date
was during the first week
or one and a half weeks of August 2008.
The discussion centred round the issue how it happened that the
partners’ money
could be paid out to a third party without
their authority, and how reimbursement could be achieved.
During the meeting Mrs Petersen left
the room saying that she would check with Mrs Kolesky and on her
return stated that Mrs Kolesky
averred that Heaney had authorised
the undertaking (which Heaney testified was being disputed by him).
Asked what was the outcome of the
meeting Heaney stated that the partnership was owed money that had
been ‘paid to Njamela’,
so the obvious first reaction
was that it should be recovered from him. Mrs Petersen intimated
that she would assist them in
recovering monies from Njamela.
Engelbrecht discussed with her the possibility of withholding monies
from Njamela out of the
proceeds of a separate deal that Mrs
Petersen was handling on his behalf. Hence, the letter, exhibit A14.
At no stage during the meeting did
Mrs Petersen acknowledge that she had not been authorised to give
the undertaking.
Matters did not take a satisfactory
turn and a request was made for a further meeting at which Njamela
was to be present. Such
a meeting was held on 21 August 2008.
Present were Heaney, Smith, Njamela and Mrs Petersen. Njamela was
supposed to explain how
he would repay the partnership. Mrs Petersen
asked him how he could place her in such a difficult position as she
was now involved
in the matter. Njamela however was what Heaney
described as ‘unremorseful’. There was no direction
indicated as to
how the monies owing were going to be recovered from
Njamela. The letter of 12 September 2008, exhibit D (paragraph 36(b)
above)
then followed.
Engelbrecht also spoke of a meeting
between the three partners and Mrs Petersen, but he was uncertain as
to when it took place,
and conceded the possibility that it occurred
only after the correspondence referred to above had passed between
him and Mrs
Petersen. (In this regard I should record that a
transcript of the evidence that was made available recorded that Ms
Potgieter
put to Engelbrecht that Mrs Petersen would testify
that the meeting was definitely after the exchange of the
correspondence on
12 and 15 September and Engelbrecht was asked if
he could dispute that. The transcript records that the response was:
‘No,
it was not’. However, my own note of the evidence,
which I am satisfied was correct, is that Engelbrecht’s
response
was that he could not dispute the proposition. On this
aspect it is also relevant to record that Engelbrecht’s
evidence
included the statement that the first contact he had
directly with Mrs Petersen was when she telephoned him on 12
September 2008
after receipt of the letter exhibit A9). As to the
course the meeting took his evidence largely accorded with that of
Heaney.
It was in respect of the alleged
meetings that Smith’s evidence was contradictory and
confusing. He confirmed that there
were two meetings. However, it
was his initial evidence that at the first meeting the discussions
centred around the question
of how the money could be recovered from
Njamela. Asked whether there was any discussion by anyone relating
to an undertaking
to pay a garage or more than one undertaking to
pay motor dealers, his first response was: ‘No’. He did
however add
that at a stage Mrs Petersen left the meeting to consult
with Mrs Kolesky about the conversation the latter had had with
Heaney.
Prior to Mrs Petersen doing so ‘
it had
been reiterated that Mr Heaney had said that an undertaking could
take place as long as it did not affect the proceeds
of our shares
of the sales
’. Asked whether Mrs Petersen said anything
on her return to the room, he stated that the conversation again
revolved around
the question of how the partners would get the funds
from Njamela, but he added that Mrs Petersen made the comment that
Njamela
had put pressure on her office before and that she had
personally helped him out of difficult circumstances before,
something
which had not featured in the evidence of either Heaney or
Engelbrecht. Prompted specifically with the proposition that Mrs
Petersen
had left the room in order to consult with Mrs Kolesky and
the question whether Mrs Petersen said anything in that regard on
her return, Smith answered: ‘
Ja, she did not at
any stage confirm that [Mrs Kolesky] had received permission to pay
out proceeds
’. Probed further as to what Mrs Petersen
had said, he replied that he did not recall. He further answered in
the negative
the question whether at any stage at the meeting Mrs
Petersen indicated that she had spoken to Heaney in regard to the
furnishing
of any undertakings on behalf of Njamela. According to
Smith the upshot of the meeting was no more than it was agreed that
the
defendant would try to arrange another meeting with Njamela
present.
In respect of the alleged second
meeting Smith confirmed that it took place on 21 August 2008, with
he, Heaney and Njamela meeting
with Mrs Petersen. It had been hoped
that Njamela would agree ‘to repay the funds incorrectly paid
on his behalf’.
Njamela however proved to be uncooperative. A
comment made by Heaney at the meeting was that by his actions
Njamela would cause
the defendant to face a fraud charge. This too
was something Heaney had not mentioned. It was then that Mrs
Petersen asked Njamela
how he could have placed her ‘in the
situation’. At this meeting Mrs Petersen had not claimed that
she personally
had received authority from Heaney to issue
undertakings for the benefit of Njamela. She was told that if the
steps against Njamela
proved to be unsuccessful action would be
taken against her company, also an aspect that neither Engelbrecht
nor Heaney had mentioned.
It was put to Engelbrecht in
cross-examination that at the meeting at which he was present there
was an attempt to prevail on
Mrs Petersen (or to threaten her) to
hold back monies due to Njamela from other transactions.
Engelbrecht’s reply was that
there was merely a discussion
concerning whether Mrs Petersen could hold such monies back, to
enable the partnership to seek
an attachment order. Engelbrech
conceded however that it was correct that Mrs Petersen replied that
in the absence of an interdict
or court order it would be
unprofessional for her to hold any monies back.
It was further put in
cross-examination of Engelbrecht, Heaney and Smith:
(a) that Mrs Petersen had no
recollection of any meeting(s) that occurred during August 2008;
(b) that she recalled only the one
meeting, ie the one at which Engelbrecht was present, which took
place after the correspondence,
referred to earlier, had passed
between the parties;
(c) that Heaney was not present at
that meeting, only Engelbrecht and Smith;
(d) that Njamela also was not present;
(e) that at the meeting Mrs Petersen
was told that the relationship with Njamela had soured, and that if
she did not assist the
partnership to recover the monies owed to it
by Njamela, they would ‘come after her’;
(f) that at the meeting Mrs Petersen
stated that she personally had a conversation with Heaney during
which he authorised the undertaking
for R195,000.00;
(g) that at a stage Mrs Kolesky came
into the room where the meeting was held and in reply to a question
put to her stated that
Heaney had given her authority for the
undertaking in the sum of R195,000.00.
(It would appear that it was this
incident that was referred to when it was later put that Mrs Kolesky
was present at the meeting).
(h) that the letter of 12 September
2008, exhibit A9, was the first intimation she received that the
partnership was seeking to
hold her personally liable;
(i) that at the meeting she
specifically stated that Heaney should be told that he should come
and say to her to her face that he
had not given her authorisation
for the undertaking (in other words, she issued a challenge);
(j) that Smith commented to her that
Heaney was an old school friend whom he and Engelbrecht were
assisting by going into business
with him.
In her evidence Mrs Petersen
confirmed the propositions referred to in the preceding paragraph.
In particularly she affirmed that
the letter of 12 September 2008,
exhibit A9, was the first intimation that she received of the
averment that she had had no authority
to furnish the undertaking
for the sum of R195,000.00 and that it was the attitude of the
partnership that
she
was liable to Heaney and Smith in
respect of that portion of the said sum that represented part of
their share of the proceeds
of the transaction in question. She had
earlier come to learn that the partners were seeking to recover
monies from Njamela.
Mrs Kolesky testified that she bore
knowledge that there was a meeting between Mrs Petersen and members
of the partnership. She
was unable to say whether it took place
before or after receipt of the letter of 12 September 2008, exhibit
A9. Initially, during
examination in chief she stated that Heaney,
Smith and Engelbrecht attended the meeting. However, under
cross-examination (without
there having been any intervening
adjournment) her evidence proceeded as follows:
‘
Daar
was getuienis gewees dat daar ‘n gesprek was in die kantore van
die verweerderes waar, soos u getuig het, Mnr Heaney
teenwoordig was,
Mnr Engelbrecht en Mnr Smith en die verweerderes. --- As ek nou
daaraan dink is ek nie seker of Mnr Heaney daar
was nie. Ek het Mnr
Smith gesien en ek het Mnr Engelbrecht gesien. Ek is nie doodseker of
Mnr Heaney daar was nie.
Mnr Heaney sê hy
was daar gewees. --- Dit mag wees maar ek kan dit nie bevestig dat hy
daar was nie.’
She stated that she did not attend
the meeting. It was put to her that during the course of the meeting
Mrs Petersen excused herself,
saying that she was going to get
confirmation from the witness whether there had in fact been a
telephonic mandate given by Heaney
for the undertaking to be
furnished. Her response was that she could not recall that, but she
added that on occasion Mrs Petersen,
during a consultation with a
client, would come to her with an inquiry or an instruction.
Mrs Kolesky further testified that
she knew of no further meeting at which Njamela was also present.
I have little difficulty in accepting
the defence version that the context in which exhibit A14, dated 12
August 2008 (paragraph
36(a) above), was written did not embrace any
intimation by the partnership that they would seek to hold Mrs
Petersen liable
for the amount allegedly paid out on behalf of
Njamela or even that their stance was that Heaney had not given
authorisation
for the undertaking in question. Similarly, I accept
the evidence of Mrs Petersen that there was only one meeting, the
details
of which were those deposed to by her. Certainly, I am
unpersuaded that Heaney and Smith discharged the onus of proving the
contrary,
on either score. My reasons for so concluding follow.
As indicated earlier, both Mrs
Petersen and Mrs Kolesky impressed me as being more credible
witnesses than were Engelbrecht, Heaney
and Smith. The contradiction
between Mrs Petersen’s evidence (that Mrs Kolesky at a stage
came into the room where the
meeting was being held) and the
proposition put on her behalf during cross-examination (that Mrs
Kolesky was present during the
meeting) was more apparent than real.
The two statements are quite capable of being reconciled. The fact
that Mrs Kolesky did
not confirm that she went into the meeting room
at a stage and confirmed that Heaney had telephonically authorise
her to give
the undertaking in question, is neither here nor there.
It could well be something that she no longer remembered, and she
was
not pertinently questioned on the aspect. The fact that Mrs
Kolesky initially stated that Heaney was at the meeting referred to
by her is of no assistance to Heaney and Smith. Her subsequent
qualification of that evidence, as set out in paragraph 76 above
was
spontaneous and in my view correctly reflected her true evidence.
I have not lost sight of the fact
that in an earlier telephonic conversation Heaney, in response to
Mrs Kolesky’s averment
that he had given authorisation for the
undertaking, had said that that was impossible, and that Mrs Kolesky
had then told him
that he should take the matter up with Mrs
Petersen. If indeed it was taken up with Mrs Petersen it would, on
the case presented
by Heaney and Smith, have been made unambiguously
clear to her both that the undertaking had not been authorised
and
that she would be held personally liable. However, although the
three partners testified that at the first meeting it was stated
that the undertaking had not been authorised, there was no
suggestion it was in any manner conveyed to Mrs Petersen that they
would look to her to reimburse the moneys allegedly wrongly paid
out. Smith specifically excluded that this happened and said
that
the discussion instead revolved around steps to be taken to obtain
reimbursement from Njamela. The contradictions between
Smith’s
evidence and that of his colleagues place a question mark on the
credibility of their version of the first meeting.
Had the letter, exhibit A14, been
written in the context contended for by counsel, it is inexplicable
that the letter did not
advert to both the allegation that the
undertaking had not been authorised and to the partners’
intention to hold Mrs Petersen
liable. On the other hand the letter
is completely in keeping with the context argued on behalf of Mrs
Petersen, that the partners
were merely pursing avenues to recover
money from Njamela.
It is only Smith who averred that at
the alleged second meeting (after exhibit A14 had been written) it
was said to Mrs Petersen
that if the partners failed in their
endeavours against Njamela they would seek to hold her personally
liable. One questions
then why a formal written demand was only
addressed to Mrs Petersen some three weeks later (to which may be
added that the letter
of demand was only written some two months
after the partners had become aware of the implementation of an
undertaking to Auto
Prestige Sales which was allegedly
unauthorised).
It is not in any way improbable that
a meeting with Mrs Petersen would be held with only Engelbrecht and
Smith present, ie in
the absence of Heaney. The dispute that had
arisen revolved precisely around his alleged conduct. Mrs Petersen’s
evidence,
which was not pertinently challenged, that she conveyed to
Engelbrecht and Smith that, as it were, she dared Heaney to come to
tell her to her face that he denied that he had given her
authorisation, had the ring of truth.
I turn now to consider the
probabilities. In the paragraphs that follow I set out my reasons
for concluding that the probabilities
favour the acceptance of Mrs
Petersen’s version.
Two aspects may be given short
shrift. It was suggested, first, that there was some sort of
personal relationship between Mrs
Petersen and Njamela that would
have moved her to assist him by way of furnishing an unauthorised
undertaking, and, second, that
she did so as a result of succumbing
to pressure applied by Njamela who made the nuisance of himself that
Mrs Kolesky deposed
to. Neither suggestion had any merit. Mrs
Petersen denied that there was a personal relationship between her
and Njamela of any
nature whatsoever. There is no reason to question
the acceptability of her denial. She also testified that Njamela did
not seek
to place her under any pressure at all, and firmly added
that she would not have countenanced same. Again, there is no reason
to question the acceptability of this evidence.
No benefit would have accrued to her
from giving Njamela an unauthorised undertaking. On the contrary, it
would have been abundantly
and unambiguously clear to her that in
doing so she was placing herself in a position where she would
inevitably have to face
serious consequences. As was emphasised by
Ms
Potgieter
, it was inevitable that the allegedly
unauthorised undertaking and the payment in terms thereof would come
to light. Accounting
in respect of the transaction in question would
have to be given and the fact of the undertaking could not have been
concealed.
The consequences for Mrs Petersen could have included
criminal charges as well as disciplinary measures by the Law
Society, probably
resulting in her being struck off the roll of
attorneys. In the light of this scenario the improbability of her
having done what
was attributed to her (on two occasions) is
manifest.
To meet this point Mr
Beyleveld
raised the argument that Mrs Petersen had not wittingly issued an
unauthorised undertaking. Instead, she had merely acted on
the
say-so of Mrs Kolesky and simply signed the undertaking placed
before her. In doing so without herself confirming with Heaney
that
he had in fact authorised the undertaking, as behoved her in the
circumstances, she had acted negligently. Hence, her liability
in
respect of the claim made by Heaney and Smith. The argument faces
two insurmountable hurdles: First, the testimony of Mrs
Petersen,
and for that matter that of Mrs Kolesky as well. Second, despite
counsel’s contention to the contrary, the point
was not put to
Mrs Petersen under cross-examination, certainly not sufficiently.
After Mrs Petersen had affirmed that she never
issued any
undertakings without confirming that they were duly authorised it
was merely put to her, first, that she was simply
making an
assumption and saying she would not have done so, and, second, that
Njamela had put pressure on Mrs Kolesky and that
she, Mrs Petersen,
signed the undertaking without obtaining authority. Both of these
propositions were firmly rejected by Mrs
Petersen and they do not
constitute a basis for the argument raised by counsel. It may also
be pointed out that there could be
no real talk of Mrs Petersen
having
unwittingly
failed, after signing the undertaking, to
take steps to secure confirmation in writing of Heaney’s
authorisation, having
regard thereto that on counsel’s
argument she herself had not personally spoken to Heaney.
In respect of Mrs Kolesky Mr
Beyleveld
conceded, correctly, that on Heaney’s version
she had on two occasions committed fraud
vìs-a-vìs
Heaney and Smith and
vìs-a-vìs
Mrs Petersen as
well, by facilitating and securing the furnishing of undertakings
that she knew were not authorised. In terms
of Heaney’s
evidence it had been made unambiguously clear to her precisely what
authorisation was being granted and what
was not being authorised.
There are however a number of considerations militating against this
scenario. First, the evidence
does not suggest that there was any
relationship between her and Njamela that rendered it likely that
she would assist him in
the manner suggested. (The fact that Mrs
Kolesky had previously worked for some years for another attorney
and become acquainted
with Njamela as a result of his bringing
conveyancing work to her then employer, did not establish that a
special relationship
between the two of them existed). Second, even
if Njamela had made a pest of himself on the second occasion, that
would hardly
have been sufficient to persuade Mrs Kolesky to commit
the fraud in question. Third, Mrs Kolesky was an experienced
conveyancing
clerk and she would have been fully aware, on the same
basis as discussed earlier, that the allegedly unauthorised
undertakings
would inevitably come to light and her fraud be
exposed. Fourth, she also ran the risk that Mrs Petersen, as behoved
her and
as was her practice, would adopt the stance that she would
not sign any undertaking without herself establishing by enquiry of
the client that it was in fact authorised.
On the other hand there is, in my
judgment, no cognizable improbability in Heaney having conducted
himself as Mrs Petersen and
Mrs Kolesky testified. As to the
suggestion that there was no benefit for the partnership in its
assisting Njamela in the manner
claimed, I have already recorded
that the partners perceived that their association with Njamela
would reap financial benefits
for them. This would have constituted
sufficient motivation for assistance to Njamela. The fact that
Njamela was already heavily
in debt to the partners and that they
initially anticipated, when the transaction in question was
commenced, that they would,
for the first time, receive a
substantial cash payment from the proceeds, does not eliminate the
motivation referred to.
There was no necessity for Mrs
Kolesky, on behalf of Mrs Petersen, to seek Heaney’s
authorisation for an undertaking in
an amount not exceeding
Njamela’s one third share of the net proceeds. The necessity
to contact Heaney would only have
arisen if authority was being
sought for an undertaking in an amount that exceeded that one third
share. In those circumstances
it is improbable that, as Heaney
claimed, Mrs Kolesky would not have mentioned an amount and merely
asked for authority for an
undertaking.
The probability that the evidence of
Mrs Petersen and Mrs Kolesky is true and that subsequently a false
claim was made that the
undertaking furnished to Prestige Auto Sales
had not been authorised, is enhanced by the fact that initially the
partners only
pursued avenues to recover their money from Njamela
(which could have been prompted by the fact that the relationship
between
them and Njamela had soured), and the fact that the formal
letter of demand was addressed to Mrs Petersen the day after the
partners
were served with the garnishee order which disclosed
Njamela’s parlous financial situation.
Finding
I accordingly conclude that the
plaintiffs have failed to establish their cause of action. It was
not argued that the present
matter was a proper case for an order of
absolution from the instance to be issued.
Costs
Subject to what follows, the general
rule that costs follow the event is to be applied.
On the morning of the fourth day of
trial, 4 February 2011, the matter was postponed to a date to be
arranged because the defendant
was ill and her evidence could not be
commenced. A medical certificate recorded that she was suffering
from a major depressive
episode with psychotic features and acute
anxiety. On the day fixed for the resumption of the trial, 6 May
2011, the defendant
was still ill and the matter was accordingly
postponed to 18 July 2011. Ms
Potgieter
submitted that the
costs occasioned by the postponements should be costs in the cause,
alternatively, that the costs lie where
they fell. She argued that
no fault could be ascribed to the defendant. Mr
Beyleveld
stressed that the reason for the postponements arose in the
defendant’s camp and submitted that it would be proper that
the defendant pay the costs occasioned by the postponements. There
are authorities for each of the three courses mooted. I have
a wide
discretion in the matter of costs. I am persuaded that it would be
fair to both parties if the costs lie where they fell.
Order
The following order is issued:
(a) Subject to (b) the plaintiffs’
claims are dismissed and judgment is given in the defendant’s
favour with costs;
(b) No order is made in respect of the
costs occasioned by the postponements on 4 February 2011 and 6 July
2011.
_________________________
F KROON
JUDGE OF THE HIGH COURT
APPEARANCES:
FOR PLAINTIFFS:
A Beyleveld SC,
instructed by
Pierre Kitching Attorneys
FOR DEFENDANT:
S Potgieter,
instructed by
Anthony Inc.