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[2019] ZALMPPHC 34
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Sebokuboku Constructions and Water Supply CC v PJMJ Engineering and Plant Hire CC (36/2015) [2019] ZALMPPHC 34 (18 July 2019)
REPUBLIC OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(LIMPOPO
DIVSION, POLOKWANE)
(1)
REPORTABLE:
YES
/NO
(2)
OF
INTEREST TO OTHER JUDGES:
YES/
NO
(3)
REVISED
CASE NO: 36/2015
18/7/2019
In
the matter between:
SEBOKUBOKU
CONSTRUCTIONS AND WATER SUPPPLY CC
PLAINTIFF
and
PJMJ
ENGINEERING & PLANT HIRE CC
DEFENDANT
JUDGMENT
MAKGOBA
JP
[1]
The
Plaintiff instituted an action against the Defendant for payment of a
total amount of R 938 271.00 being in respect of the reimbursement
of
expenses for fuel, ground engagement tools, the hiring of graders,
transportation of graders, accommodation of grader operators
and
project management fees. Furthermore the Plaintiff claims a statement
and debatement of a full account of the business of a
partnership
between the Plaintiff and the Defendant.
[2]
The
Defendant in its plea denied that a partnership agreement was
concluded between the Plaintiff and the Defendant. It was
specifically
pleaded that Mr Marcus Malebatja, the managing member of
Plaintiff, was employed by the Defendant as a project manager for
which
he was paid an amount of R 100 000.00 for 38 days. It was
further pleaded that the Defendant deposited money into Mr
Malebatja's
nominated bank account to enable him to manage and make
the necessary payments of expenses on behalf of the Defendant, when
executing
his duties. Accordingly the Defendant denied that any
amount is owed to the Plaintiff in respect of the reimbursement of
the expenses.
Common
Cause Facts
[3]
It is common cause that
3.1.
The
Plaintiff prepared a quotation for submission to the Road Agency
Limpopo (''RAL") using the Defendant's letterhead. The
quotation
was accepted by RAL.
3.2.
The
Defendant was at that time under financial constraints. The Plaintiff
started managing the project and used its money, for which
it was to
be reimbursed.
3.3.
The
Defendant was provided with two banking accounts of Sebokuboku
Construction & Water Supply CC and the bank account of Marcus
Ruby Investment CC for the Defendant to make payments into these two
accounts.
3.4.
The
Defendant made its bank card available for use by Plaintiff for the
purpose of fuel purchases and other necessities needed for
the
management of the project. The Plaintiff also used its own bank card
for the same purpose for which it was to be reimbursed.
3.5.
The
project which commenced on 14 April 2014 and which was supposed to
last for 38 days was eventually extended with another 28
days and was
concluded on 29 August 2014 .
3.6.
The
following number of graders were provided by the Plaintiff, the
Defendant and one Mr Kwinana.
14 April 2014 to 16 May 2014
The Plaintiff 5 graders
The Defendant 2 graders
Mr Kwinana 2 graders
19 May 2014 to 19 June 2014
The Plaintiff 5 graders
The Defendant 2 graders
Mr Kwinana 2 graders
4 August 2014 to 29 August 2019
4 from Barlow paid by the funds
received from RAL
The Plaintiff 1 grader
The Defendant 1 grader
3.7.
The
first payment was made by RAL on 6 June 2014 in an amount of R 807
623.00. The second payment of R 1 308 193.00 was made on
18 July
2014. The third payment of R 672 722.00 was made on 4 September 2014.
The fourth payment of R 589 764.00 was made on 11
September 2014. The
final two payments of R 166 270.00 and R 259 958.00 were made in
March 2015. The total amount received from
RAL in respect of the
project is therefore R 3 804 530.00.
Factual
Matrix
[4]
Mr
Seja Marcus Malebatja and his son Mphaki Lefa Malebatja gave evidence
on behalf of the Plaintiff. Various documents were also
handed in by
Mr Marcus Malebatja during the trial as evidence. Mr Johannes Modiba
and one Mr Sylvester Khwinana gave evidence on
behalf of the
Defendant.
[5]
Mr
Marcus Malebatja testified that he was the managing member of the
Plaintiff. He further testified that the Plaintiff had since
2005
been involved in inter alia the upgrading of roads in the Limpopo
Province. He knows Mr Modiba, the sole member of the -Defend
ant,
very well as he is the nephew of a close friend of his.
[6]
During
March 2014 Mr Malebatja became aware of a memorandum by Road Agency
Limpopo (RAL) in terms of which it requested quotations
for the
supply of graders. He obtained a copy of the memorandum from the
procurement manager of RAL. It entailed the supply of
graders for the
blading of various provincial gravel roads as well as the
transportation of the graders, the supply of diesel and
ground
engagement tools (GET), maintenance of the graders, the provision of
grader operators and accommodation for grader operators.
Because of
his experience in the field he knew where to hire graders. The
Plaintiff was however unable to submit the necessary
quotation as its
letter of good standing had 'expired'. He then approached Mr Modiba
in this regard and enquired from him whether
the Defendant complied
with all the necessary requirements including a letter of good
standing which Mr Modiba confirmed. Mr Malebatja
then asked Mr Modiba
whether they could "make a partnership" in terms whereof
they would submit the quotation in the
name of the Defendant. He
would do everything from the quotation to running the project as he
had the required knowledge and experience
to which Mr Modiba agreed.
[7]
On
27 March 2014 Mr Malebatja submitted the quotation to RAL on the
Defendant's letterhead as agreed. On 7 April 2014 Mr Malebatja
was
informed by Mr Modiba that he had received an appointment letter from
RAL in respect of the Capricorn District. Thereafter
they met at Mr
Modiba's Office. He then proposed to Mr Modiba that he would act as
the project manager and that a fair compensation
as such would be R
100 000.00 for the 38 days of the project to which Mr Modiba agreed.
[8]
Mr
Malebatja further proposed that they should invite a certain Mr
Khwinana (who was known to him and a friend to Mr Modiba) to
source
graders and that he would also bring his son, that is Malebatja's
son. Before the project started on the 14th of April 2014
the four of
them met at Mr Modiba's Office. During the said meeting Mr Khwinana
was invited to also source graders for the project
and that for each
grader sourced payment would be made at the rate of R 450.00 per
hour. All disbursement incurred would be reimbursed
from the first
payment received from RAL.
[9]
Mr
Malebatja further testified that the first invoice submitted by the
Plaintiff in respect of expenses incurred by it was for an
amount of
R 228 726.00 which was in fact paid from the first funds received
from RAL. However when the second payment was made
by RAL he
suggested to Mr Modiba that rather than to pay the Plaintiff's
invoice in respect of the reimbursement of expenses incurred
by the
Plaintiff, they should pay a deposit of R 450 000.00 to Barlow for
the hiring of new graders reason being that they had
experienced
numerous breakdowns of graders, which could jeopardise the successful
completion of the project. The suggestion was
accepted.
[10] Mr
Malebatja testified that he had utilised funds which the Plaintiff
had received for another 'job'
as well as some of his wife's pension
benefit to fund this project. The Plaintiff had incurred expenses in
respect of GET and fuel
as set out in claims 3, 4 and 8 of the
Particulars of Claim in the total amount of R 562 222.00. He
testified that claim 7 was
in respect of the hiring of a cat grader
by the Plaintiff which was used at Skeiding. Claim 5 was in respect
of the project manager
as well as assistant fees. Claims 1, 2 and 6
were in respect of short payments made by the Defendant of invoices
submitted by the
Plaintiff for the reimbursement of expenses.
[11]
Mr Malebatja testified that save as
aforesaid the profit and loss still had to be calculated. In
cross-examination he testified
that the Plaintiff and the Defendant
were in partnership and as such liable for any loss which resulted
from the project.
[12]
Mr Malebatja referred to the bank
statement of the Plaintiff for the period May 2014 which showed that
the Plaintiff had made payment
during May in excess of R 200 000.00
for the hiring of graders from BJP and Mantel as well as for diesel.
He further testified
that the Plaintiff funded the project because it
was a partner. He reiterated that they had received their first
payment in the
amount of R 807 623.00 from RAL on 6 June 2014 from
which an amount of R 228 726.00 was paid to the Plaintiff as
reimbursement
of expenses incurred by the Plaintiff as per invoice
submitted in this regard.
[13]
The amounts claimed by the Plaintiff in
respect of the disbursements and expenses incurred can be summarised
as follows and as per
the particulars of claim:
Claim 1: R 27 157.50 (being short
payment)
Claim 2: R 733.00 (being short
payment)
Claim 3: R 78 473.06 (for GET)
Claim 4: R 397 862.31 (for diesel)
Claim 5: R 193 684.21 (for
management fees)
Claim 6: R 19 497.00 (being short
payment)
Claim 7: R 134 976.00 (for grader
hiring)
Claim 8: R 85 887.89 (for diesel)
Total: R 938 271.08
In his evidence Mr Malebatja was
able to testify on all the amounts claimed by producing supporting
documentation in the form of
invoices, receipts and bank statements.
The relevant invoices have been attached as annexures to the
particulars of claim in this
matter. He testified that the Plaintiff
had never claimed more than what was due to it as all the invoices
were supported by documentary
proof thereof.
[14]
Mr Malebatja made a good impression as a
witness. His evidence was straightforward both during evidence in
chief and cross-examination.
He answered questions satisfactorily and
without any contradictions. The evidence of Lefa Malabatja
corroborates that of Mr Malebatja
with regard to the existence of a
partnership between the Plaintiff and the Defendant. Lefa Malebatja
testified that he was employed
by the partnership at a remuneration
of R 20 000.00 for 38 days. He was present at a meeting with Messrs
Malebatja, Modiba and
Khwinana when the four of them discussed the
sourcing of graders. The said meeting was held at Mr Modiba's office.
[15]
Mr Johannes Modiba testified that he was
approached by Mr Malebatja who asked him whether he was able to go to
RAL to make a quotation.
Mr Malebatja said to him that he knew about
the 'job' and that it was an opportunity for him (referring to Mr
Modiba) to quote.
He declined it whereafter Mr Malebatja went to his
mother during the night for her to ask him to avail his company with
regard
to the opportunity. After a meeting at his mother's place he
gave the Defendant's letterhead to Mr Malebatja to work for him in
the event of the quotation being accepted by RAL.
[16]
After the quotation had been accepted by
RAL he appointed Mr Malebatja as the project manager for an agreed
remuneration of R 100
000.00 for a period of 38 days. Mr Malebatja
thereupon asked him whether he could also involve his son in the
running of the project.
They then agreed to it and that R 20 000.00
would be a fair remuneration for his services. Mr Malebatja also
suggested to him that
they should invite people that they trusted to
source graders for which graders they would be paid R 450.00 per
hour. They would
also be reimbursed for the expenses incurred by them
in the process to which he had agreed to.
[17]
He testified that his cash flow at the
time was tied and for them not to lose the opportunity Mr Malebatja
offered to use his funds
in the meantime which he could pay back to
him out of the money received for the project to which he agreed.
When asked whether
he had paid Mr Malebatja the R 100 000.00 as
agreed he initially said yes, according to his records. When asked in
which account
he had paid the R 100 000.00 he said he had to first
check his bank statement. When this question was once again put to
him in
cross examination he said that Mr Malebatja's salary
formed part of the first payment of R 228 726.00 made to the
Plaintiff.
[18] In
cross-examination Mr Modiba said that due to his cash flow problems
at the time it was agreed that
Mr Malebatja would bring in whatever
he could to help in running the project so that they did not lose the
project, for which he
would be reimbursed.
[19] When
it was put to Mr Modiba that this version was contradictory to what
was pleaded by him in paragraphs
4.2.4 and 10.3 of his plea to wit
that he paid all operational costs of the project and that the
Plaintiff was misleading the Court
by generating invoices for
disbursements as if the Plaintiff had paid for amounts appearing on
those invoices from its own funds,
he could not give any explanation
thereof. It was further put to him that the aforesaid conduct of the
parties were not that of
an employer employee relationship but of
partners to which he could not give a satisfactory answer or
explanation.
[20]
When
asked by the Court how it came about that an employee had to source
and pay for graders for an employer, he said that they
had a short
period of time to source the graders. This answer is still not being
understood by this Court.
[21]
There
is a vast discrepancy between the Defendant's plea and Mr Modiba's
testimony before Court. In the Defendant’s plea the
following
was stated as a defence to show that the Defendant does not owe any
amount to the Plaintiff in respect of disbursements
or expenses:
"1) 4.2.4. In
terms of the said appointment the Defendant would pay for all
operational
costs of the project into the nominated account of Mr
Malebatja who would then be able to make any necessary payment for
the project
on behalf of the Defendant.
2)10.2..... Defendant
pleads that funds were put into the Plaintiff's account by Defendant
to enable Mr Malebatja to manage and make the necessary payments on
behalf of the Defendant when executing his duties.
3)10.4. The
Defendant further pleads that all payments to the supplier,
Barlow
and other suppliers were made by the Defendant, some by paying the
disbursements amounts into the nominated account of Mr
Malebatja
including that of the Plaintiff, and others were paid directly to
suppliers."
[22]
In
his testimony in Court Mr Modiba stated that Mr Malabatja would time
and again present invoices to him which he settled. Mr Modiba
was
unable to explain the material contradiction between the plea and his
testimony. In general he was not a good witness. His
evidence was
shaken on several occasions under cross-examination. On the other
hand the evidence of Mr Marcus Malebatja was, as
against that of Mr
Modiba, detailed, consistent and probable. The evidence of Mr
Khwinana, who testified for the Defendant, does
not take this case
any further.
[23]
The
evidence of Mr Modiba and the submission by the Defendant's Counsel
that the Defendant has overpaid the Plaintiff to the tune
of R 443
493.23 in respect of the disbursements or expenses incurred is
improbable. One would have expected the Defendant to have
lodged a
counter claim for repayment of such a significant and large sum of
money.
Issues
for Determination
[24]
The following issues are for
determination:
24.1.
Whether
there was a partnership agreement entered into by and between the
Plaintiff and the Defendant.
24.2.
Whether
there is any outstanding amount due to the Plaintiff by the Defendant
relating to the services rendered by the Plaintiff,
including
disbursements incurred by the Plaintiff in connection with the
management of the project.
The
Law with regard to Partnership
[25]
There
are no formalities prescribed for the conclusion of a partnership
agreement. The agreement may thus be concluded in writing,
orally or
even tacitly, that is implied by conduct. The presence of the
essentialia of a partnership in an agreement is
prima
facie
proof of an intention to
create a partnership.
[26]
In
casu
the evidence establishes the
following as the essentialia of a partnership:
26.1.
The
Plaintiff and the Defendant would jointly submit a tender/quotation,
in the name of the Defendant, to provide graders for the
blading of
provincial gravel roads for the Road Agency Limpopo.
26.2.
The
Plaintiff would, in the name of the Defendant, prepare certain
quotations to be submitted by the parties in the partnership
to RAL.
26.3.
Any
expenses incurred by a party in execution of the project, would be
reimbursed to such party out of the first available funds
received
from RAL and such reimbursement would take place into a bank account
as nominated by a party, from time to time.
26.4.
The
graders sourced by any of the parties would be reimbursed as expenses
and at the rate of R 450.00 per hour excluding VAT, on
a 9 hours a
day rate.
26.5.
The
net profit earned by the partnership would be shared equally between
the Plaintiff and Defendant.
[27] In
the case of
Pezzutto v Dreyer and Others
1992 (2) SA 379
(A)
at
page 3891- 390E it was held that:
'For
a
partnership to
come about there must be an agreement to that effect between the
contracting parties. In determining whether or not
an agreement
creates
a
partnership
a
Court will have
regard, inter alia, to substance of the agreement, the circumstances
in which it
was
made and the
subsequent conduct of the parties....What is necessary to create
a
partnership
agreement
is
that the
essentialia of
a
partnership
should be present. Our Courts have accepted Pothier's formulation of
such essentialia
as
a
correct
statement of the law. The three essentials are (1) that each of the
partners bring something into the partnership, whether
it be money,
labour or skill; (2) that the business should be carried on for the
joint benefit of the parties; and (3) that the
object should be to
make
a
profit
.. .Where Pothier's four requirements are found to be present the
Court will find
a
partnership
established 'unless such
a
conclusion is
negative by contrary intention discloses on
a
correct
construction of the agreement between the parties' ...
a
joint venture in
respect of
a
single
undertaking can amount to a partnership provide the essentialia of
a
partnership are
present...'
[28]
In brief, the essentialia
necessary for the creation of a partnership are
(1)
that
each of the partners bring something into the partnership, whether it
be money, labour or skill;
(2)
that
the business should be carried on for the joint benefit of the
parties;
(3)
that
the object should be to make a profit; and
(4)
that
the contract be a legitimate one.
See
also:
Bester
v Van Niekerk 1960 (2) SA 779 (A) at 783H-784A and Purdon v Muller
1961 (2) SA 211 (A) at 218B-D.
[29] In
the present matter the Plaintiff's case is based on an oral
partnership agreement concluded
during March/April 2014 between the
Plaintiff, represented by its managing member, Mr Malebatja and the
Defendant represented by
its managing member, Mr Modiba in respect of
a single project, to wit the hiring of graders to RAL for blading of
the provincial
gravel roads in the Capricorn District during the
period 14 April 2014 until 29 August 2014.
Circumstances pointing out to the
existence of a partnership between the parties
[30]
The
undisputed evidence of Mr Malebatja is that he had the knowledge,
experience as well as the funds to do the project. However
the
Plaintiff could not submit a quotation to RAL as its letter of good
standing had expired. The Plaintiff therefore had to form
a
partnership with another company which complied with all the
requirements including a letter of good standing. Consequently and
because he knew Mr Modiba very well he approached him to form a
partnership in respect of the project to which the latter had agreed.
[31]
It
is the Defendant's case that Mr Malebatja was a mere employee of the
Defendant. It is against the nature of an employment contract
for an
employee to fund his employer's project to the tune of hundreds of
thousands of Rand. Such conduct to the effect that each
of the
partners bring something into the partnership is clearly indicative
of a partnership agreement. In the present case Mr Malebatja
brought
in money, graders, skill and labour into the business project of the
partnership.
[32]
Mr
Modiba's testimony to the effect that the Defendant was at the time
cash strapped is an indication that Mr Malebatja was to contribute
to
the capital to start the project. This is a clear indication that a
partnership between the Plaintiff and the Defendant was
intended. Mr
Malebatja testified that his understanding of a partnership was that
they could share equally in the profit and loss
from the project.
[33]
Mr
Malebatja testified that when the second payment of R 1 308 193.00
was made by RAL to the Defendant on 18 July 2014 he informed
Mr
Modiba to rather pay an amount of R 450 000.00 to Barlow for hiring
of new graders as they had experienced numerous breakdowns
of the
graders hired from other service providers, instead of reimbursing
the Plaintiff for expenses incurred at that stage. This
means that Mr
Malebatja was prepared to forego any payment due to him for the sake
of a successful completion of the project. In
my view Mr Malebatja's
aforesaid conduct is a further indication of his intention to make
profit for the joint benefit of the Plaintiff
and the Defendant.
[34]
From
the totality of the evidence adduced at the trial the Plaintiff
presented a plausible version of events. The Defendant's version
that
Mr Malebatja was a mere employee of the Defendant is highly
improbable. The conduct of the Plaintiff at all material times
manifestly surpassed that of an employee. Such conduct is in my view
indicative of a partner. .
Conclusion
[35]
Having
regard to the totality of the evidence and the probabilities in this
matter I reach a conclusion that it is more probable
than not that a
partnership agreement was entered into by and between the Plaintiff
and the Defendant. Furthermore the Plaintiff
has proved on a balance
of probabilities that a total amount of R 938 271.08 is still
outstanding in respect of the disbursements
incurred in the running
of the business of the partnership.
[36]
Accordingly,
judgment is granted in favour of the Plaintiff against the Defendant
for:
(a)
Payment of the sum of R 938 271.00;
(b)
Interest on the aforesaid amount at 9%
per annum a
tempore morae;
(c)
That the Defendant renders a full
account of the business of the partnership.
(d)
Debatement of the aforesaid account;
(e)
Payment to Plaintiff of whatever amount
that appear to be due to the Plaintiff upon debatement of the
account.
(f)
Costs of the action.
EM
MAKGOBA
JUDGE PRESIDENT OF THE
HIGH COURT, LIMPOPO DIVISION,
POLOKWANE
APPEARANCES
Heard
on
: 10, 11, 12 & 18 June 2019
Judgment
delivered on :
18 July 2019
For
the Plaintiff
: Ms M C De Klerk
: DDKK Attorneys Inc
For
the Defendant
: Adv S M Malatji
Instructed
by
: Langa Attorneys