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[2020] ZALMPPHC 47
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OSZ Tayob Trading Trading Pietersburg (Pty) Ltd v Ramusi (HCAA 08/2019) [2020] ZALMPPHC 47 (9 June 2020)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
(1)
REPORTABLE:
YES/
NO
(2)
OF
INTEREST TO OTHER JUDGES:
YES
/NO
(3)
REVISED
Case
no: HCAA 08/2019
In
the matter between:
OSZ
TAYOB TRADING PIETERSBURG (PTY) LTD
APPELANT
And
PAULINA
NTEBO
RAMUSI
RESPONDENT
APPEAL
JUDGMENT
MULLER
J:
[1]
This is an appeal against the judgment
and order of Makgoba JP. Leave was granted by the learned Judge
President to the Full
Court
of this Division.
[2]
The appellant, is a company, which
instituted action against the respondent as surety and co-principal
debtor for the recovery of
R 3 520 490.45 and costs in respect of
goods
sold
and delivered to
a
closed
corporation, Ntema Investments CC
[1]
in terms of a written agreement which embodied a credit facility, a
cession of debts and a surety.
[3]
The written agreement which incorporated
the surety was not disputed at the trial.
It is
therefore common cause that the
respondent bound herself jointly and
severally as surety and co-principal debtor with the principal debtor
Ntema Investments CC
to the appellant. The appellant elected to
institute action against the respondent, who is a member of the CC,
instead of the closed
corporation.
[4]
The defence of the respondent, simply
put, was that the debt had been paid and as a matter of
fact the
appellant was overpaid.
[5]
It was agreed at
a pre-trail conference held between the
parties and also at
the
commencement of the trial that the respondent had the onus to prove
payment and the duty to begin
.
[2]
[6]
The appellant, in its particulars of
claim, relied on a certificate of indebtedness as proof of the amount
due and payable, which
certificate purported to be a certificate as
envisaged by clause 18(e) of the deed of surety.
[7]
Clause 18(e) reads:
"The
amount
of
the
signatory/ies
indebtedness
hereunder
and
that
of
the
Applicant
to EH
Hassim
at any time, shall be
determined
and proved by
a
certificate signed
by
EM Hassim (or by one of EH Hassim's directors or managers whose
appointment, qualification and/or authority need not be proved)
and a
certificate in terms hereof shall be binding on the signatory/ies,
shall be prima facie proof of the amount of the signatory/ies
indebtedness hereunder and shall be valid as a liquid document
against the signatory/ies in any competent court for the purpose
of
obtaining provisional sentence or judgment against the signatory/ies
thereon."
[8]
At the commencement of the trial counsel
for the appellant handed up to the court a certificate of
indebtedness for the amount of
R2 731 392.34 as proof of the amount
due and owing by the responde
n
t.
[3]
[9]
The respondent testified and thereafter
closed her case. The appellant elected to close its case without
calling any
witness.
[10] After having
heard argument Makgoba JP granted absolution of the instance and
ordered that each
party pays its own costs.
[11]
The first ground of appeal is that an
order for absolution of the instance, in law, is incompetent where a
defendant is burdened
with the onus to prove its defence. I agree
that such an order is incompetent. In the event where the defendant
has the
burden
of
proof,
the
court
may grant
judgment
for
the
plaintiff, if the defendant is unable to
prove its defence in respect of which it has the onus. If the court
is satisfied that the
defendant has succeeded in proving its defence,
dismissal of the claim must follow. There is no room for an order for
absolution
of the instance when the onus of proof rests with a
defendant.
[4]
The appeal must therefore succeed in respect of the first ground of
appeal.
[12]
But that is not end of the appeal.
Attached to the particulars of claim were two reconciliation
statements and a certificate of
indebtedness. The first
reconciliation statement is in respect of contract NTE 004 in the
amount of R2 670 749.54 and the second
in respect of contract NTE 006
for R849
740.91.
Totalling the amount claimed of R3 520
490.45.
[5]
[13]
The
certificate of
indebtedness attached to
the
particulars
of
claim
only
confirms that the amount of R3 520
490.45 is claimed in in respect of goods sold and delivered and
monies loaned and advanced, which
amount is
due
and
payable.
[14]
The respondent pleaded that the
appellant was paid the amount of R3 895 084.52
[6]
in
respect
of contract NTE
004
which
included
"returns".
[7]
And
in
respect of contract NTE 006
the
appellant was
paid an
amount of
R6
435
691.84
[8]
which included "returns" as embodied in Annexure A and B
which are attached to the plea as proof of payments
made.
[15]
Annexures A
[9]
and B
[10]
are a reconciliation statements issued by the appellant in respect of
contract NTE 004 which showed an outstanding balance in the
amount of
R1 713 573.41
[11]
and contract NTE 006 which shows an outstanding balance of R346
298.96.
[12]
The total amount outstanding in respect of both annexure A and Bis R2
059
872.37.
[13]
[16]
The respondent testified that the CC was
involved in two projects. In respect of contract NTE
004
the
CC was contracted to
build
65 RDP
houses
and
in
respect of contract NTE 006 the CC was
required to build 100 houses. The department who contracted with the
CC paid the appellant
directly by virtue of the cession in
favour of
the appellant which is embodied in the
credit agreement. For the
65
houses the appellant received R3 109 968.67. The amount excluded the
"returns" of materials which were not used in
the building
project. The amount also excluded the labour in respect of the 65
houses in the amount of R560 000.00
[14]
which should have been added to the figure. The department paid out
R3.5m
on
the project.
[17]
The respondent testified in respect of
contract NTE 006 that the appellant was paid R5 916 376.08. The
amount excluded labour in
the amount of R800 000.00.
[15]
The appellant was paid the labour by the department due to the
cession to which the appellant had no claim whatsoever. As a result
the appellant in actual fact received R6 700 000.00 and the CC by
contrast was paid R57 000.00 per house on the project. The contract
value was R5 700 000.00.
The respondent also suggested in her evidence
that the appellant never supplied the CC with delivery notes but at
the completion
of the project certain materials delivered and not
utilised were returned for which the CC was credited in the amount of
R519 315.76.
[18]
In cross examination the respondent,
when she was referred to the total amounts reflected in annexures A
and B insisted that those
amounts excluded labour which the appellant
was obliged to pay to the CC after the appellant received payment
from the department
in terms of the cession.
[19]
It was also put to the respondent that
her calculation was incorrect when she added the "returns"
to the total instead
of deducting the "returns" in respect
of which the CC received credits for the returns. The respondent
conceded but stated
that with the cost of labour added, the total
costs would have exceeded that contract value and that the appellant
have received
all the money paid in terms of the contract by the
department. The respondent was of the opinion that it makes no
business sense
to spend more on the projects than she contracted for
and that she obtained the expertise of the appellant to assist her to
remain
within her
budget.
[20]
It was put to her that annexures A and B
do not support her version that she overpaid the appellant. The
respondent maintained that
the cost of the labour was paid to the
appellant to which the appellant has no right. She was firmly of the
opinion that in terms
of the National Credit Act the appellant cannot
give credit which exceeded
the
amount which the
department
will
pay
for
the
project. It was pointed out to the
respondent that she should have instituted a counterclaim and that no
such claim was
instituted.
[21]
The respondent testified that she had
given instructions to her attorney to institute a claim. (A
counterclaim, of course, would
have been an exercise in futility if
the
CC was
not joined to
the
proceeding
s
.
The
respondent is the
surety and
not
the
debtor who
entered into
the
credit
agreement
with
the
appellant.)
The respondent, as the surety, is not a party
to the main credit agreement. A suretyship is accessory to the main
credit agreement
entered into between the appellant and the CC. It is
an undertaking by the surety that the obligation of the principal
debtor will
be discharged and, if not, that the creditor will be
indemnified. The surety however, could raise the same defences as the
principal
debtor.
[22] After
conclusion of the cross-examination, the learned Judge-President
directed certain questions
to the respondent to clear up
uncertainties. She explained that the appellant employed quantity
surveyors to determine what was
needed for the project which the
appellant then delivered on site. When the builders on site do not
utilise some of the items delivered
they are returned to the
appellant. The department paid the appellant as the supplier in
accordance with the cession. The CC is
therefore at the mercy of the
supplier. The department only pays the contractor after the supplier
had notified the department
that they had been paid in
full.
[23]
The
respondent confirmed that
no
payments
had
been
made
to
the
appellant after the action had been
instituted. The respondent was unable to give an explanation for the
difference when it was
put to her that the certificate of
indebtedness (exhibit A)
showed
that
an
amount
of
R2
731
392.35
is
due
and
owing to the appellant but that the appellant claimed R3 520 490.45
in the summons. One
can
hardly
think,
in
fairness
to
the
respondent, that
she
would
have
been
able
to
give
an
explanation,
when
confronted,
why
there
is
c:;uch
a marked difference between the amount claimed and the amount
reflected in Exhibit
A,
when
the
exhibit
was
handed
up
at
the
commencement of
the
trial
[24] However, her
evidence that no payments had been made after the summons was issued
is incorrect.
Annexure A and B attached to the plea clearly shows
that
the
following payments had
been
made
after
the
summons was
issued
on
19 September 2013:
(i)
16 July 2014 - R290 000.00 in terms of
annexure
A;
(ii)
18 October 2013 - R170 000.00 in terms
of annexure
B;
(iii)
20 December 2013 - R6 690.00 in terms of
annexure B;
(iv)
20 December 2013 - R41 895.00 in terms
of annexure
B;
(v)
18
February
2014
-
R2
000.00
in
terms
of
annexure
B;
(vi)
2 June
2014
-
R220
000.00
in
terms of
annexure
B.
[25]
I am unconvinced that the respondent was
able to prove that the CC made an overpayment or that the department
had made payment to
the appellant of the full contract value which
included the costs of the labour in the amount of R8 000 .00 per RDP
house erected
by the CC. One expected that the
respondent would have called an
official from the relevant department to prove the amounts in respect
of the contracts NTE
004 and 006 which were paid to the appellant in
terms of the cession. The respondent cannot at the trial complain
that no delivery
notes were supplied to her if her legal
representatives neglected or failed to obtain these documents in
terms of the rules, prior
to the commencement of the trial. If the
respondent was of the view that she
viii
be prejudiced at the trial an adjournment should have been sought to
obtain the relevant documents. Both parties intimated
that they were
ready for the trial to commence.
[26]
It is
clear
that the CC has put
its
trust in
the
appellant to
determine the quantity of materials
needed to complete the contracts and trusted the appellant with the
contents of the contracts
and the value of the project.
It is no surprise that the respondent is
of
the
view that
she
cannot
owe
the
appellant more than what the project was worth.
[16]
[27]
It is
a
ground of
appeal
that
the
court
ought to
have
accepted
the
certificate
of indebtedness, annexure "OZS 3,
as proof of the amount claimed
[17]
.
I cannot agree with
the
contention.
To illustrate
this
point;
the
certificate
was signed by Samantha
Naidoo
in
her
capacity
as
an
accountant
of
t'1e
appellant.
The
claim,
so the certificate says, is in respect of "goods sold and
delivered" as well as "monies lent and advanced."
To
evaluate the content of the certificate it is necessary to return to
the
wording
of
clause
18(e) of
the
deed of surety.
[28]
Clause
18(e)
makes
no
provision
for
a
certificate
of
indebtedness
to
be
issued by an accountant of the
appellant. The clause requires that a certificate be issued
by EM
Hassim personally or
be issued by
a
director
or
manager
of the appellant. In addition, the
certificate relates to an indebtedness for goods sold
and delivered and monies lent and advanced which is not
the cause of action against the principal debtor. The claim of the
appellant is based on an incidental credit agreement entered into
between the appellant and the CC in terms whereof goods were
sold
and
delivered to the
CC
as
the principal debtor
.
There
is no suggestion or allegation, in the particulars of claim that
monies were lent and advanced to the CC by the appellant.
[29]
A certificate issued in terms of clause
18(e) must strictly comply with the requirements of the said clause
to be admissible as
evidence. The certificate failed dismally to
comply with the requirements set by the clause. The effect of the
failure to observe
the basic requirements for a valid certificate, is
that the certificate has no probative value. It cannot constitute
prima facie
evidence
against the respondent and must, therefore, be disregarded as proof
of the indebtedness of the respondent towards the appellant.
[30]
When the
trial commenced another certificate,
exhibit A, was handed up as a substitute for
certificate annexure "OSZ
3."
[18]
The
appellant
relied
on
exhibit
A
as
prima
facie
proof
of
the
respondents'
indebtedness
in
the
amount
of
R
2
731
392.34.
I
cannot
think
of
any
other
reason
why
Exhibit
A
was
handed
up
at
the trial
if
the
appellant
did
not
rely
on
it
as
proof
of
the
amount
due.
The
appellant, effectively, abandoned
reliance on the first certificate when Exhibit A was handed
up
as
prima
facie
proof
of
the
contents
for
purposes
of
the
trial.
Exhibit A does not suffer from the same
defects as
the
first certificate and
covers
the
period
up
to
11
December 2017.
[19]
However, Exhibit
A
is
not
free
from
criticism.
[31] The certificate
refers to "NTEMAINVESTMENT & SURETY." Clause 18(e) of
the deed of suretyship
states that the amount of the indebtedness of
the signatory of the deed of suretyship may be proved by means of a
certificate which
shall
be
binding
on
the
signatory.
No
one
called
"Surety"
signed
the
deed of suretyship. The respondent signed the application as duly
authorised representative of a closed corporation as well
as the
surety and co-pri1cipal debtor in her personal capacity. The
certificate,
ex
facie
the
document, lacked the
necessary
particularity
to
identify
the
respondent
as
the
surety
to
establish
prima
facie
proof
of
the
indebtedness of
the
respondent. Evidence was necessary to
establish the identity of the surety. The certificate should, at the
very least, contain sufficient
particulars to correctly identify the
debtor(s),
[20]
the creditor and the amount of the indebtedness as at the date the
certificate was issued. Exhibit "A" is, in my view,
similarly without probative value.
[32]
Very importantly, both Annexures A and B
attached to the particulars of claim, covered the period 31 March
2011 to 21 August 2013,
whereas Annexures A . and B attached to the
plea, on which the respondent relies,
covered the period 31 March 2011 to 16 July 2014. Summons was issued
on
19
September 2013.
[33]
It must be accepted that goods were
sold, delivered and certain payments had been made between 22 August
2013 and July 2014 as per
Annexure A and B attached to the plea.
[34]
The appellant requested the court, in
its notice of appeal, to grant judgment in its favour for the amount
of R2 059 872.37 together
with interest, costs of the action on an
attorney and client scale as well as collection commission. The
judgment which the appellant
seeks is not based on either of two
certificates of indebtedness. It is premised on the amounts reflected
in Annexure A and B attached
to the plea, which the respondent relied
upon, as being the balance outstanding, and due and payable. The
outstanding balance in
respect of annexure A is reflected as
R1713573.41 and in respect of annexure
Bas R346 298.96. The total amount
outstanding is R2 059 872.37.
[35]
In my view, the respondent has not
proved, on a balance of probability, that the costs of labour had to
be taken into account when
the indebtedness of the respondent in
respect of the goods sold and delivered to the CC is
calculated. And even if the labour had
to be taken into account, the respondent has failed to prove that the
amount in respect of
the
labour had been paid to the appellant by the department in terms of
the
cession.
[36]
The deed of suretyship makes no
provision for costs. Neither for costs on an attorney and client
scale, nor for collection commission.
The appellant is, therefore,
not entitled to such costs. Counsel for the appellant did not advance
any argument to the contrary
when he was requested ta
comment.
ORDER
(1)
The appeal is upheld with
costs.
(2)
The order of absolution of the
instance, with each party to pay its own costs is set
aside.
(3)
The order is replaced with the
following order:
(a)
Judgment
is
granted in favour
of
the
plaintiff against the
defendant for:
(i)
payment of the amount of R2 059
872.37.
(ii)
interest a
tempore
morae
from date of judgment
to date of final payment.
(iii)
costs of suit.
GC
MULLER
JUDGE
OF THE HIGH COURT
LIMPOPO
DIVISION: POLOKWANE
I
concur
MF KGANYANGO
JUDGE OF THE HIGH COURT
LIMPOPO
DIVISION: POLOKWANE
I
concur
TC TSHIDADA
ACTING JUDGE OF THE HIGH COURT
LIMPOPO
DIVISION: POLOKWANE
APPEARANCES
1.
For the
Appellant
: NA Cassim SC
2.
For
the
Respondent
: TD Ledwaba
3.
Date of hearing
: 29 May 2020
4.
Date Judgment delivered
: 09 June 2020
[1]
Hereinafter "the CC".
[2]
Pillay v Krishna
1946 AD 946
,958,
Standard Bank of
SA
v Oneanate Investments (Pty) Ltd (in liquidation)
[1997] ZASCA 94
;
1998 (1) SA
811
(A) 823D.
[3]
The certificate was admitted into the record as Exhibit A although
there is no indication on record when it was done.
[4]
Hirschfeld v Espoch
1937 TPD 19
, 21;
Schoeman v Moller
1949(3) SA 949 (0) 957;
Challinger v Speedy Motors
1951
(1) SA 340
(C) 349F-G;
Scheepers v Video
&
Telecommunications Services
1981 (2) SA 490
(E) 491H-492A.
[5]
The reconciliation statements attached to the particulars of claim
are for the period 31 March -31 August 2011.
[6]
Payments as per reconciliation annexure A R3 109 968.67 plus R785
115.85 totals R3 895 084.52.
[7]
Returns are goods purchased that were returned and credit notes were
issued in respect of which.
[8]
Payments as per reconciliation annexure B R5916 376,08 plus returns
R519 315.76 totals R 6 435 691.84
[9]
Annexure A is a reconciliation statement for the period 31 March
2011 until 16 July 2014.
[10]
Annexure B is a reconciliation statement for the period 13 April
2012 until 2 June 2014
[11]
The totals are: Purchases R5608 657.93; Returns R785 115.85;
Payments R3 109 968.67;
Outstanding balance R1
713 573.41
[12]
The totals are: Purchases R6 781 990.80; Returns R519 315.76;
Payment R5 916 376.08;
Outstanding balance R346
298. 96.
[13]
R1713573.41 plus R346 298.41.
[14]
R8 000.00 per house.
[15]
R8 000.00 per house.
[16]
The respondent is the member of the CC and negotiated all the
contracts on behalf of the CC.
[17]
Counsel for the appellant did not rely on any of the two
certificates in argument. He relied on the plea and the evidence of
the respondent.
[18]
The record does not show that exhibit A was handed in. It is clear
from the totality of the proceedings that the document was
indeed
handed in by counsel for plaintiff
[19]
Senekal v Trust Bank of Africa Ltd
1978 (3) SA 375
(A) 382G.
[20]
The signatories of the deed of suretyship.