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[2020] ZALMPPHC 99
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Gaboinewe Investments (Pty) Ltd v Vardocap (Pty) Ltd (3246/2020) [2020] ZALMPPHC 99 (7 December 2020)
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
(1)
REPORTABLE:
NO/
YES
(2)
OF
INTEREST TO OTHER JUDGES: NO/
YES
(3)
REVISED
07/12/2020
CASE
NO: 3246/2020
In
the matter between:
GABOINEWE
INVESTMENTS (PTY) LTD
PLAINTIFF
and
VARDOCAP(PTY)LTD
DEFENDANT
JUDGMENT
NAUDE AJ:
[1]
This is an opposed summary judgment
application in which the Plaintiff seeks payment in the sum of R1 460
000.00 (One Million Four
Hundred and Sixty Thousand Rand) form the
Defendant.
[2]
It is common cause between the parties
that the Plaintiff, duly represented by its director, Kagiso Ivan
Khabeng and the Defendant,
duly represented by its director and/or
duly authorised person W.A van der Walt entered into a written
mandate agreement on or
about 23 February 2018 at Centurion.
[3]
In terms of the agreement the Plaintiff
was appointed as a consultant and/or lead transaction advisor for the
purpose of raising
finance for the Defendant's project from the
Industrial Development Corporation ("the IDC"). In terms of
the agreement
the Plaintiff would secure debt funding for the
Defendant's project from the IDC.
[4]
The Defendant agreed to pay the
Plaintiff's mandate fees. In terms of the agreement the Defendant
would pay the Plaintiff's project
development costs, which
constituted of the following:
a)
a commitment fee of R40 000.00 (Forty
Thousand Rand);
b)
a completion of proposal package
submission fee to the funder of R100 000.00 (One Hundred Thousand
Rand);
c)
fees on the approval of basic assessment
by the funder in the sum of R100 000.00 (One Hundred Thousand Rand);
and
d)
a success fee calculated at the
applicable effective rate provided in clause 4.1.1 of the agreement.
[5]
It was further agreed that the mandate
fees rates on successful sourcing of capital for the Project shall be
priced at a percentage
of the total amount raised from the IDC
Funding as per a schedule contained in the agreement. In the case the
IDC approves the
funding by 31 March 2018, the full rate as per the
schedule in the agreement will be payable to the Plaintiff. In the
event that
the IDC approves the funding after the 31
st
of March 2018, the Plaintiff will be paid an amount equal to two
thirds (66.67%) of the rates in the schedule.
[6]
It was further an express payment term
of the mandate agreement that the Defendant will advance an amount of
R1 500 000.00 (One
Million Five Hundred Thousand Rand) to the
Plaintiff upon the first disbursement tranche by the IDC post
approval of finance and
the remainder of the Plaintiff's invoice
would be settled upon the second disbursement tranche by the IDC.
[7]
In terms of Clause 7.1 of the Mandate
Agreement, the agreement will commence from the effective date set
forth and continue for
a period of one year from the effective date
unless terminated earlier. Either party may terminate this agreement
at any time upon
thirty (30) day notification. Upon termination the
Plaintiff shall be entitled to receive compensation and reimbursement
for any
work accrued , but not paid by the Defendant.
[8]
In terms of Clause 7.2 of the Mandate
Agreement, in the event of the Defendant terminating the agreement
after the IDC Term
sheet being issued, the Plaintiff will be
entitled to receive the full amount of the Mandate Fees as outlined
in Clause 4.1.2 of
the agreement.
[9]
Clause 7.3 stipulates that in the event
that funding is not approved by any reason not related to the
Consultant's work, the client
does not have to pay the Success Fee.
[10] The
Plaintiff claims remuneration or fees for performing its obligations
in terms of the mandate agreement.
The Plaintiff submits that it
discharged its obligations in terms of the mandate agreement by
acting as Lead Consultant in developing
and submitting a bankable
business proposal for the purposes of raising finance from the IDC
for the Defendant's project.
[11]
The Plaintiff submits that the Defendant
is in breach of its obligations in terms of the agreement in that the
Defendant has failed
to pay the Plaintiff's fees for the "completion
of the proposal pack and submission" in the amount of R100
000.00 as
well as fees consequent on the Plaintiff's proposal having
passed initial basic assessment by the IDC in the further amount of
R100 000.00.
[12]
Approval for initial basic assessment
was granted by the IDC on the 19th of March 2018. On the 17th of
September 2018 the IDC approved
a total debt finance facility of R27
000 000.00 (Twenty Seven Million Rand) for the Defendant's project,
in consequence of the
application submitted by the Plaintiff.
[13] The
Defendant opposes the application for summary judgment and submits
that the Plaintiff is not entitled
to payment of any fees, for mainly
two reasons:-
a)
First, the Plaintiff is not entitled to
recover remuneration for commission in terms of the mandate agreement
because it failed
to perform its obligations in terms of the
agreement, and
b)
Secondly, it was a tacit or implied term
of the mandate agreement that the plaintiff would only be entitled to
payment of remuneration
or commission in terms of the agreement if it
was the effective cause for the raising of project funding by the
Defendant from
the IDC. According to the Defendant the Plaintiff was
not the effective cause of the funding received by the Defendant from
the
IDC.
[14]
The Defendant further argues that the
Plaintiff would be entitled to be paid fees upon the successful
sourcing of capital for the
project. The Defendant's counsel further
argued that in order to recover remuneration or commission for the
performance of a mandate,
an agent must allege and prove all of the
following:
a)
The contract of mandate;
b)
An undertaking to pay remuneration. This
involves the interpretation of the agreement according to the
ordinary rules of interpretation.
c)
Due performance of the mandate. Due
performance of the mandate depends on the terms of the mandate. In
the absence of special terms,
it includes proving that the Plaintiff
was the effective cause of the funding. This may involve considering
whether there was a
break in the chain of causation.
[15]
The Defendant in its plea, admits the
conclusion of the mandate agreement but pleads the existence of what
it contends to be tacit
terms of the agreement. The alleged tacit
terms are as follows:-
"4.3.1 the plaintiff
would only be entitled to remuneration in terms of the contract if
the raising of project funding
from the IDC was
as
a result of the
business proposal submitted by the plaintiff;
4.3.2
the plaintiff would not be
entitled to remuneration in terms of the contract if the raising of
project funding from the IDC occurred
irrespective of the plaintiff's
involvement, or if the plaintiff
was
not the effective cause of the
raising of project.
4.3.3
the plaintiff would not be
entitled to remuneration in terms of the contract if plaintiff's
involvement did not persist in influencing
the IDC to the point that
it advanced project funding to the defendant."
[16]
The Defendant argues that the plaintiff
is not entitled to remuneration in terms of the Mandate Agreement
because the raising of
project funding from the IDC was not as a
result of the business proposal submitted by the Plaintiff. The
Plaintiff is furthermore
not entitled to remuneration in terms of the
agreement because the raising of project funding from the IDC
occurred irrespective
of the Plaintiff's involvement and the
Plaintiff was not the effective cause of the raising of project
funding.
[17]
The Defendant further contends that the
Plaintiff's business proposal did not persist in influencing the IDC
to the point that it
advanced project funding to the Defendant.
According to the Defendant, in fact, the proposal submitted by the
Plaintiff, on behalf
of the Defendant, was not approved by the IDC,
and the Defendant had to submit a further business proposal to the
IDC, which eventually
persisted in influencing the IDC to advance a
first tranche of project funding to the Defendant in the amount of
R27 000 000.00.
[18]
The Plaintiff's counsel argued that the
tacit terms sought to be advanced by the defendant, are untenable in
that their importation
would conflict with and contradict the clear
and express terms of the mandate agreement.
[19] It
was further argued that the tacit terms sought to be pleaded cannot
co-exist with the payment terms
of the mandate agreement. This is
inasmuch as the mandate agreement clearly stipulates different
categories of payments. Some of
these payments were to be made prior
to the funding being received. It is only the success fee which was
to be paid thereafter.
The tacit terms alleged do not draw a
distinction between these various categories.
[20] The
Plaintiff's counsel argued that specifically at clause 4 of the
mandate agreement, there is provision
made for the payment of various
monies prior to funding having in fact been received from the IDC,
which include the following:-
a)
a commitment fee of R40 000.00 (Forty
Thousand Rand);
b)
a completion of proposal pack and
submission to the funder fee of R100 000.00 (One Hundred Thousand
Rand);
c)
an approval of basic - initial
assessment by the funder and the IDC coming for due diligence fee of
R100 000.00.
[21]
The tacit terms the
Defendant seeks to import in the agreement, which suggest that
remuneration to the Plaintiff, was
only payable upon receipt of
project funds from the IDC, contradicts the clear terms of the
mandate agreement which establishes
triggers for certain payments,
prior to funding being actually received.
[22]
A tacit term, or term implied from the
facts, was described by Corbett AJA in Alfred McAlpine & Son
(Pty) Ltd v Transvaal Provincial
Administration
[1974] 3 All SA 497
as,
"an unexpressed provision
of the contract which derives from the common intention of the
parties, as inferred by the Court
from the express terms of the
contract and the surrounding circumstances. In supplying such an
implied term the Court, in truth,
declares the whole contract entered
into by the parties."
[23]
In order to decide whether a tacit term
is to be imported into the contract one must first examine the
express terms of the contract.
Rumpff
JA in Pan American World Airways Inc v SA Fire and Accident Insurance
Co Ltd
[1965] 3 All SA 24
stated as
follows:
"When dealing with the
problem of an implied term the first enquiry is, of course, whether,
regard being had to the express
terms of the agreement, there is any
room for importing the alleged implied term."
[24]
The express terms can deliberately
exclude the possibility of importing tacit terms of a particular
type. Nor can a tacit term be
imported on any question to which the
parties have applied their minds and for which they have made express
provision in the contract.
A tacit term cannot be imported in
contradiction of an express term.
[25]
The principle was well expressed by
Van
Winsen JA in SA Mutual Aid Society v Cape Town Chamber of Commerce
[1962] 1 All SA 583
as follows:
"A term is sought to be
implied in an agreement for the very reason that the parties failed
to agree expressly thereon. Where
the parties have expressly agreed
upon
a
term
and given expression to that agreement in the written contract in
unambiguous terms no reference can be had to surrounding
circumstances in order to subvert the meaning to be derived from
a
consideration of
the language of the agreement only."
[26]
Solomon JA in Union Government
(Minister of Railways) v Faux Ltd
1916 AD 105
112
said:
"Now
it is needless to say that
a
Court should be
very slow to imply
a
term in
a
contract which is
not to be found there, more particularly in
a
case like the
present, where in the printed conditions the whole subject is dealt
with in the greatest importance on
a
matter which
could not have been absent from the minds of the parties at the time
when the agreement was made."
[27]
In
Cassim
v Kadir
1962 (2) SA 473
(N) 4758, Miller J
said
of such a contract:
"The
contract, in its existing form, is therefore efficacious and complete
and needs no addition in the form of an implied
term."
If
an examination of the express terms does not immediately exclude the
possibility of importing a tacit term, the next question
is what
general test the court should apply in order to decide whether the
importation of a tacit term would be appropriate.
[28]
Millin J in Rapp and Maister v
Aronovsky
1943 WLD 68
74-5
held as
follows:
"It has often been pointed
out that it is not sufficient to show that the term would be highly
reasonable or convenient to
one or other or even both the parties.
The cases show that the court has to be continually on its guard
against being persuaded
to introduce a term which, on analysis of the
argument, appears to be no more than a term which would make the
carrying out of
a contract more convenient to one of the parties or
to both of the parties and might have been included if the parties
had thought
of it and if they had both been reasonable. You are not
to imply a term merely because if one of the parties or
a
bystander had
suggested it, you think only an unreasonable person would have
disagreed. You have to be satisfied that both parties
did agree. It
is quite a different proposition, if in a hypothetical
case
Scrutton LJ puts
it, you feel the parties might say: 'You have called our minds to
something we have not thought of and what you
say is not
unreasonable, let us discuss it.' If that is all that the Court feels
might have happened, then the court is not entitled
to imply the
term."
[29]
The second part of
Scrutton
LJ's
test, the bystander test, is
also known as the
"officious
bystander"
test from its
formulation by
MacKinnon LJ in
Shirlaw v Southern Foundries (1926) Ltd
[1939] 2 KB 206
at 227.
'Prima facie that which in any
contract is left to be implied and need not be expressed is something
so obvious that it goes without
saying; so that, if, while the
parties were making their bargain, an officious bystander were to
suggest
some
express
provision for it in their agreement, they would testily suppress him
with a common 'Oh, of course'.
[30]
The Plaintiff's counsel argued that the
tacit terms sought to be advanced by the Defendant contradict the
express terms of the mandate
agreement and are thus untenable and
further inasmuch as they are of the nature of an "imputed tacit
term" do not bear
up to scrutiny, in that the defendant has
failed to allege that these "tacit terms it alleges" were
matters discussed
and which they agreed upon or would have agreed
upon by necessary implication, as opposed to its mere preference. I
agree with
this argument.
[31]
In the case of
Wilkins
v Voges
[1994] ZASCA 53
;
1994 (3) SA 130
(A) at 1361, Nienaber JA
said:
"A tacit term, one so
self-evident as to go without saying, can be actual or imputed. It is
actual if both parties thought
about a matter which
is
pertinent but did
not bother to declare their assent. It is imputed if they would have
assented about such
a
matter if only
they had thought about it
-
which they did
not do because they overlooked
a
present fact or
failed to anticipate
a
future one.
"
[32]
Subsequent circumstance, which could not
have been present in the minds of the parties, will not be relevant,
but in cases of doubt
the subsequent conduct of the parties under the
contract may be relevant in drawing an inference about their
intentions at the
time it was entered into.
[33]
The Plaintiff's counsel argued that the
belated defences raised by the Defendant are spurious, as the
Defendant has admitted its
liability to the Plaintiff.
[34]
In the Plaintiffs particulars of claim,
the Plaintiff pleaded that
"[10]
On 11 April 2018 and in an email directed to the plaintiff and the
IDC, the defendant undertook to pay the outstanding
professional
development fees."
[35]
In the email dated 11 April 2018 the
following was stated by Thandi Dywili, a director of the Defendant:
"It is very strange of
Kagiso to declare me liar, when he has been constantly reassured of
his payment."
and then further:
"Why:
Because we have not made an intentional decision to withhold his due
Consulting Fees, we have cash flow challenges. And
we completely
respect that his fees earned by packaging the first stage of our
application, is due to him. What we will try and
do as
a
business, is to
see if we cannot pay him
a
minimum, until
his fees are paid up."
[36]
It is of significance to note that all
the other directors of the Defendant were included in the e-mail sent
by Thandi. Not one
of the other directors replied to state that the
proposal made by the Plaintiff to the IDC was rejected and the
Plaintiff was not
entitled to its fees. It is clear that all the
other directors of the Defendant were also aware that the Plaintiff
was indeed owed
and entitled to its fees as per the Mandate
Agreement.
[37]
In another email dated 3 April 2018 sent
by Thandi Dywili, the following was stated:
"You will be paid when the
company has money. We have continuously made it clear that you will
be paid."
[38]
It is clear from the above e-mails that
the admissions made by the Defendant's director does not only
establish that the Defendant
has conceded to the fact of liability,
but that the Defendant concedes that the Plaintiff was the effective
cause of the Defendant
receiving funding and has the Plaintiff
performed its obligation. The Defendant's argument that the proposal
was rejected by the
IDC and did not lead to the IDC performing a due
diligence, cannot hold water.
[39]
On 19 March 2018 Lesibana Ramaoka, the
Regional Officer, Limpopo Province, IDC, sent an email to Kagiso
Khabeng the director of
the Plaintiff, as well as to Thandi Dywili,
the director of the Defendant wherein the following was stated:-
"Dear Kagiso
Please
note that the deal has been recommended to go on DD [due diligence]
pending the following.
1.
Confirm valuation (please provide
assets register)
2.
How much has been spent so far,
how much each shareholder contributed so far,
3.
Clarity on the shareholders Joan
4.
Existing shareholders to
contribute 40% towards the R105 million
5.
New shareholders to contribute
40% towards the R30 million
6.
Please clarify the shareholders
share distribution or provide shareholders agreement and memorandum
of understanding.
7.
Raw material supplier
-
supplier contract from Exxaro. Please
note the following need to be addressed before DO commences, for
further information please
do not hesitate to contact me."
[40]
It is clear from the plain reading of
the above wording of the e mail that the proposal was accepted
by the IDC, but the IDC
requested for further information prior to
the due diligence process commencing. The fact that the IDC requested
the aforementioned
further information, and the fact that the further
information was provided by the Defendant, does not render the
Defendant's submission
of further information to be a new application
and proposal as submitted by the Defendant. The Defendant failed to
attach any documentation
or other proof that the proposal by the
Plaintiff was rejected and a totally new proposal was submitted by
the Defendant.
[41]
It is further noteworthy that the IDC on
17 September 2018 approved a total debt finance facility of
R27-million for the Defendant's
project. The Defendant at no stage
cancelled the agreement with the Plaintiff. The debt finance was
further approved within the
one year contract term as per clause 7.1
of the Mandate Agreement.
[42]
lt is trite law that the Defendant must
fully disclose the nature and grounds of the defence and the material
facts on which it
is based. The Defendant must depose to facts, that
if accepted as the truth or proved at the trial, with admissible
evidence, would
constitute a defence to the Plaintiff's action.
[43]
If the defence is averred in a manner
that appear in all the circumstances to be needlessly bald, vague or
sketchy, it will constitute
material for the court to consider in
relation to the requirement of
bona
fides.
(See Breitenbach v Fiat
SA (Edms) Bpk
1976 (2) SA 226
(T) at 228E-F).
[44]
In
Meek
v Kruger
1958 (3) SA 154
(T) at 159H-160A
it
was held that the purpose of summary judgment is to assist a
plaintiff where a defendant who cannot set up a bona fide defence
or
raise an issue to be tried, enters appearance simply to delay
judgment.
[45]
In my view, the Defendant has failed to
show that there exists a
bona fide
defence to the Plaintiff's claim and
is it thus appropriate in the circumstances that the application for
summary judgment, as sought
by the Plaintiff be granted with costs.
[46]
In respect of the success fee rate
applicable, it is common cause that the debt finance was finally
approved after 31 March 2018
and the Plaintiff is therefore only
entitled to 66.67% of the mandate success fee rate.
[47]
I therefore make the following order:-
1.
Summary Judgment is granted against the
Defendant.
2.
The
Defendant is ordered to pay the amount of R1 460 000.00 (One Million
Four Hundred and Sixty Thousand Rand) to the Plaintiff.
3.
Payment of interest on the sum of R1460
000.00
a tempore morae
from
date of summons, 3 June 2020, until date of final payment.
4.
Costs of suit.
M. NAUDE
ACTING JUDGE OF
THE HIGH COURT
APPEARANCES:
HEARD
ON:
1 DECEMBER 2020
JUDGMENT
DELIVERED ON: 7 DECEMBER 2020
For
the Plaintiff:
ADV. AE AYAYEE
Instructed
by:
MAPHOKO MHAHLELE INC.
C/O DDKK ATTORNEYS INC.
For
the Defendant:
ADV. PL UYS
Instructed
by:
SAVAGE JOOSTE & ADAMS INC.
C/O PRATT LUYT & DE LANGE
ATTORNEYS