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2023
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[2023] ZAFSHC 280
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Leano Construction Solutions (Pty) Ltd v PGJ Properties (Pty) Ltd (435/2019) [2023] ZAFSHC 280 (19 July 2023)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 435/2019
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
In
the matter between:
LEANO
CONSTRUCTION SOLUTIONS (PTY) LTD
Plaintiff
and
PGJ
PROPERTIES (PTY) LTD
Defendant
CORAM:
LOUBSER, J
HEARD
ON:
16, 17 and 19 MAY 2023
JUDGEMENT
BY:
LOUBSER, J
DELIVERED
ON:
The judgment was handed down electronically
by circulation to the
parties’ legal representatives by email and released to SAFLII
on 19 JULY 2023. The date and time for
hand-down is deemed to be 19
JULY 2023 at 11:00
[1]
In this action the plaintiff-company is claiming payment of the sum
of R500 000.00 plus
interest from the defendant-company. It is
alleged in the summons that the plaintiff, duly represented by mr.
Neo Malefane, and
the defendant, duly represented by mr. Petrus
Steyn, entered into an oral agreement at Bloemfontein on 29 November
2017 in terms
of which the plaintiff lent an amount of R500 000.00
to the defendant. It was a term of the said agreement that the loan
would
be used for working capital, and that it would be repayable to
the plaintiff on demand, it is alleged.
[2]
It is further alleged in the summons that the amount of R500 000.00
was subsequently paid
over to the defendant on the same day, namely
29 November 2017. However, the defendant failed to repay the loan to
the plaintiff
on demand and is consequently indebted to the plaintiff
in the amount of R500 000.00, it is alleged.
[3]
In the plea filed by the defendant, the loan agreement between the
parties, as alleged,
is denied. It is pleaded that the defendant
never concluded a loan agreement with the plaintiff, and that it is
accordingly not
indebted to the plaintiff in any amount claimed. It
is further pleaded that the R500 000.00 received by the defendant on
29 November
2017 was a nominated payment by mr. Neo Malefane in his
personal capacity.
[4]
It is alleged in the plea that a week before the payment was made to
the defendant,
namely on 22 November 2017, a directors meeting of the
companies by the name of Empire Bricks (Pty) Ltd and Mangaung
Building Material
and Hardware (Pty) Ltd was held. At this meeting,
mr. Petrus Steyn, mr. Neo Malefane and mr. Daniel Havenga were
present. It was
agreed at this meeting that mr. Malefane will make an
immediate cash contribution of R750 000.00 and a further cash
contribution
of R550 000.00 before the end of November 2017 to the
two companies, Empire Bricks and Mangaung Building Material and
Hardware.
It was further agreed that mr. Malefane’s payment, as
aforesaid, will be allocated against his personal loan account no 1
held personally by him in a close corporation by the name of Complex
Webs CC, which close corporation was a shareholder of both
Empire
Bricks and Mangaung Building Material and Hardware.
[5]
At a pre-trial conference it was agreed by the parties that the
issues in dispute
are as referred to in the pleadings, and more
specifically the following: Firstly, whether an agreement was
concluded between the
plaintiff and the defendant, and secondly, what
the terms of the agreement were. During the course of the hearing,
only two witnesses
were called to testify, namely the abovementioned
mr. Neo Malefane, who testified on behalf of the plaintiff, and mr.
Petrus Steyn,
who testified on behalf of the defendant.
[6]
Mr. Malefane gave his testimony first. He testified that he is the
sole director and
a shareholder of the plaintiff. Around November
2017 he purchased the members interest in Complex Webs CC, and
thereby he became
a director of the defendant, of the company Bird
Street Properties (Pty) Ltd, of Empire Bricks and of Mangaung
Building Material
and Hardware. That loan agreement was concluded
around 28 November 2017, in terms of which R500 000.00 was
transferred by the plaintiff
to the defendant on 29 November 2017, he
testified. A week before, a shareholders meeting took place. At that
meeting, mr. Steyn,
he himself and mr. Havenga were present. Mr.
Steyn was the managing director of the defendant, of Bird Street
Properties, of Empire
Bricks and of Mangaung Building Material and
Hardware. Mr. Steyn informed them at the meeting that the said
businesses were experiencing
cashflow problems. He the witness, then
indicated that he will look at the financial position of his other
businesses, namely the
plaintiff, and he will then see what
assistance he can give. He testified that he mentioned an amount of
between R700 000.00
and R1 million as possible assistance. He
also indicated that the loan would be made by the plaintiff, he
testified.
[7]
Mr. Malefane testified that he then looked at the financial position
of the plaintiff,
and he contacted mr. Steyn on 29 November 2017, and
informed him that the plaintiff would lend an amount of R500 000.00.
Mr. Steyn
then said that the loan must be paid to the defendant for
working capital. He further testified that they agreed that the
amount
was repayable on demand. He demanded the repayment early in
2018, but to date the loan was never paid back.
[8]
In cross-examination the witness confirmed that all four the entities
mentioned were in
financial trouble, and he conceded that the R500
000.00 paid to the defendant was immediately distributed among the
other entities.
He also conceded that he did not find interest on the
loan amount as a compelling factor. It was put to the witness that he
never
contacted mr. Steyn on 29 November 2017 or spoke to him. It was
in fact mr. Havenga, the accountant of the entities, who had informed
mr. Steyn that the plaintiff had paid R500 000.00 into the account of
the defendant. It was also put to the witness that the defendant
did
not need any working capital, since only Empire Bricks and of
Mangaung Building Material and Hardware were actually trading.
They
were the ones who needed working capital, and not the defendant.
[9]
Mr Steyn testified that the meeting of 22 November 2017 was called to
discuss the financial
problems of Empire Bricks and Mangaung Building
Material and Hardware, and to discuss those problems with mr.
Malefane. The minutes
of the meeting were prepared by mr. Havanga,
who was responsible for the finances of the two companies as their
accountant. Mr
Steyn further testified that he never spoke to mr.
Malefane on 29 November 2017, as alleged. At the meeting of 22
November 2017,
he came under the impression that mr. Malefane himself
would make a loan available. Havenga had made it clear to Malefane
that
all moneys would go through the account of the defendant. The
loan would be documented against Malefane’s loan account in
Complex Webs CC, he said. Mr. Steyn further testified that when the
payment of the R500 000.00 happened, mr. Havenga told him that
it was
the plaintiff who had made the payment.
[10]
In cross-examination mr. Steyn testified that he is not sure who will
be liable for the repayment
of the loan after the proceeds thereof
were distributed among the other entities. The money was put on a
loan account, and he cannot
say how the money will be paid back. He
is not sure how the accounting system will deal with this aspect.
[11]
At the end of his testimony, the court posed a few questions to mr.
Steyn, to which he responded
as follows: The R500 000.00 that was
paid, was a loan. This loan must be paid back. It must be paid back,
“probably”
to the plaintiff, although Malefane had said
he himself would make the contribution. The loan must be paid back by
the businesses.
They must pay it back to Complex Webs CC. The
businesses who must pay back to Complex Webs CC are Empire Bricks and
Mangaung Building
Material and Hardware, he said.
[12]
During the course of the trial, the court was made
privy to a number of documents, to which I will refer
only as far as
they are regarded to be relevant to the issues before the court. The
first document is the minutes of the meeting
of 22 November 2017.
Although this document is not signed, it is of some significance
because both parties relied on it to advance
their respective cases.
It is firstly clear from the minutes that those present were mr.
Steyn and mr. Malefane, both representing
the defendant, Bird Street
Properties, Empire Bricks and Mangaung Building Material and
Hardware. Secondly, it is only mentioned
that mr. Steyn explained the
cash flow issue and where it started from day one. Thirdly, it is
documented that “Neo is positive
that we can turn the cash flow
situation around. Neo will look into the matter to make a cash
contribution of R750 000.00 immediately
and R550 000.00 towards the
end of the month. This payment will be allocated against his loan
account 1.” In the fourth place,
it does not appear that any
agreement was concluded at the meeting. And in the fifth place, the
plaintiff is not mentioned at all
wherever the possibility of a cash
loan is discussed.
[13]
The next document is an online pay alert by Standard Bank showing the
payment by the plaintiff
to the defendant’s account of the
amount of R500 000.00 on 29 November 2017. Another document that
needs mentioning, is a
bank account statement of the defendant
showing the payment of the R500 000.00 on 29 November 2017. It goes
on to show that on
the very next day, namely 30 November 2017, most
of the loan amount was paid out by the defendant to other entities,
which included
Empire Bricks and Mangaung Building Material and
Hardware. Empire Bricks received R100 000.00 and Mangaung Building
Material and
Hardware also received R100 000.00. Mr. Steyn himself
received R50 000.00, and EMP Diesel the amount of R106 133.94. An
amount
of R41 122.08 went for “BSP huur November 17”, and
Centlec BSP Ben Jones Elect was paid an amount of R25 624.14.
Bloemsec
received R385.00. An amount of R23 961.38 went to SARSEF
0046794021, and an amount of R12 501.80 for MLM-PGJ Robert Burns
Street.
These payments roughly amounts to a total of R460 000.00.
The balance of the R500 000.00 loan apparently remained in the
account
of the defendant at the end of November 2017.
[14]
Now on a conspectus of all the pleadings, evidence, and documents
before the court, it becomes
clear that the plaintiff is placing
heavy reliance on the alleged communication between mr. Malefane and
mr. Steyn on 29 November
2017 to prove that on that day, an oral
agreement was concluded between the plaintiff and the defendant for
the payment of the
R500 000.000 by the plaintiff, which amount would
be payable on demand. However, it is denied by mr. Steyn that such a
conversation
ever took place on 29 November 2017. In addition, the
defendant in turn places heavy reliance on the minutes of the meeting
of
22 November 2017 to show that it was actually mr. Malefane, acting
in his personal capacity, who had undertaken to provide the funds
as
working capital for Empire Bricks and Mangaung Building Material and
Hardware. The defendant contends that, on this basis, it
is not
liable to refund the plaintiff. The plaintiff therefore has no claim
against the defendant, it is contended.
[15]
The crucial question is then whether this court can find in the
circumstances of this case and
on the evidence that mr. Malefane and
mr. Steyn had actually agreed in a conversation on 29 November 2017
that the plaintiff would
provide a loan of R500 000.00, that the loan
would be paid to the defendant and that the loan would be repayable
on demand. Here
we have the word of one witness against the other. In
such circumstances, the probabilities of the matter must be
considered, as
well as the evidence of the respective witnesses when
they advanced their contradictory versions.
[16]
The probabilities in my view favour the version of the plaintiff. The
minutes of the meeting
of 22 November 2017 leaves the firm impression
that it would be mr. Malefane who will provide the loan in his
personal capacity.
Something must have happened to change this
intention to one where the plaintiff was the entity that eventually
provided the loan.
That something could probably be the conversation
on 29 November 2017. The evidence of mr. Steyn that the R500 000.00
must be paid
back to “probably” the plaintiff, in my view
brings an end to the enquiry. His further evidence that the loan must
be paid back by Empire Bricks and Mangaung Building Material and
Hardware, makes no sense, because we have seen that the R500 000.00
became distributed to several entities, and not only to the two
companies in question. In the premises, I find that an oral agreement
was concluded between the plaintiff and the defendant on the terms
alleged by the plaintiff. If the loan was made for the benefit
of
Empire Bricks and Mangaung Building Material and Hardware, it makes
no difference to the position of the defendant, since the
agreement
stipulated that the loan would be made to the defendant.
[17]
Even if this court is wrong in finding that there was in fact an oral
agreement between the parties
on 29 November 2017, I have no doubt
that, at the very least, a tacit contract came into being between the
parties on that day.
This is so because of the following: Firstly,
the R500 000.00 was paid into the bank account of the defendant on 29
November 2017
by the plaintiff, notwithstanding any agreement that
might have preceded such payment. Secondly, mr. Steyn was well aware
at the
time that it was the plaintiff who had paid the said amount,
and he was well aware that the payment represented a loan. It was mr.
Havenga who informed him as such. Thirdly, mr. Steyn did not reject
the payment into the defendant's account, nor did he do anything
to
object to the payment by the plaintiff. On the contrary, he was quite
happy and content to make use of the money the very next
day by
allowing the defendant to distribute the funds to other entities. If
the payment by the plaintiff was not in accordance
with any prior
agreement with mr. Malefane, mr. Steyn had full opportunity to pay
back the full amount to the plaintiff without
making use of it.
[18]
The now Supreme Court of Appeal has found that if a party fails to
respond in circumstances that
call for a response, it will be an
important factor in the final determination of the dispute.
[1]
This is such a case, where the conduct of mr. Steyn, or for that
matter, mr. Havenga, established on a balance of probabilities
that a
tacit loan agreement came into being between the plaintiff and the
defendant on 29 November 2017. After all, in deciding
whether a tacit
contract was concluded, the law considers the conduct of both parties
objectively and the circumstances of the
case generally.
[2]
The conduct of the parties in the present case, viewed against the
background of all the circumstances that emerged during
the trial,
justify only one reasonable inference, and that is that both parties
tacitly agreed on 29 November 2017 that the plaintiff
would provide a
loan to the defendant, which he had to pay back on demand. If I am
wrong with the payment on demand, I am in any
event satisfied that a
reasonable period for the payment of the loan has already lapsed.
Having regard to the evidence of mr. Malefane,
I cannot find that
payment of interest by the defendant was a term of the tacit
agreement.
[19]
In the summons, the plaintiff referred to the terms of the agreement
between the parties as the
relevant express, alternatively implied,
alternatively tacit terms and conditions of the agreement. I find, in
the premises, that
the tacit terms of the agreement have been proved
by the plaintiff. Consequently, I make the following orders:
1.
The defendant is ordered to pay the sum of R500 000.00 to the
plaintiff.
2.
The defendant is ordered to pay the plaintiff’s costs of suit.
P.
J. LOUBSER, J
For
the plaintiff:
Adv.
J.H. Els
Instructed
by:
Phatshoane
Henney Inc.
Bloemfontein
For
the defendant:
Adv.
P.J.J. Zietsman SC
Instructed
by:
Honey
Attorneys
Bloemfontein
/roosthuizen
[1]
McWilliams
v First Consolidated Holdings (Pty) Ltd
1982 (2) SA 1
(AD) at page
10
[2]
Mühlmann
v Mühlmann
1984 (3) SA 102
(AD) at 124 A-B, and Standard Bank
of SA Ltd v Ocean Commodities Inc.
1983 (1) SA 276
(A) at 292B