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[2018] ZANCHC 11
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Van der Merwe v Hendrik Fielies t/a Komeng Building & Related Services (CA & R 73/2016) [2018] ZANCHC 11 (9 February 2018)
IN THE HIGH COURT OF
SOUTH AFRICA,
NORTHERN CAPE DIVISION, KIMBERLEY
Case
no: CA & R 73/2016
Not
reportable
In the
matter between:
C VAN DER
MERWE APPELLANT
and
HENDRIK FIELIES t/a
KOMENG
BUILDING & RELATED
SERVICES RESPONDENT
Heard:
18 September 2017
Delivered:
09 February 2018
Corum:
Phatshoane ADJP and Snyders AJ
JUDGMENT
Phatshoane ADJP
[1] This
is an appeal by Mr Cornelius van der Merwe, the appellant, against
the judgment
and part of the order dated 27 November 2015 issued by
Ms A.I. Venter, the Regional Magistrate of De Aar, in which she
dismissed
his claim of R243 114.00 with costs.
[2] The
appellant instituted action against Mr Hendrik Fielies t/a Komeng
Building &
Related Services, the respondent, in which he claimed
payment of an amount of R297 354.00 together with interest and costs
arising
out of an oral agreement concluded between them for the
re-surfacing of the 6.6 km Remhoogte gravel .road number 3023
situated
in Prieska and the 3.7 km Niekerkshoop gravel road number
P69/01 situated in Niekerkshoop. Included in this claim is an amount
of R54 240.00 for the additional work performed by the appellant. The
latter claim is not in dispute and judgment was granted in
respect
thereof.
[3] The
appellant's main contention is that around May 2014 he concluded an
oral agreement
with the respondent in terms of which he was
subcontracted to re gravel the two roads in issue at an agreed
contract price
of R75 000.00 per km plus VAT. He forwarded an invoice
to the respondent for the payment of a total amount of R880 650.00
computed
as follows: an amount of R495 000.00 in respect of 6.6 km
road and R277 800.00 for the 3.7 km road plus VAT in the amount of
R108
150.00. The respondent made two payments of R300 000.00 and R337
536.00, respectively, to the appellant in respect of the two road
works. The difference in the payment, in the amount of R297 354.00,
is in issue in this litigation.
The factual
background:
[4] Around
November 2013 the respondent, an inexperienced emerging contractor,
was awarded
a tender by the Department of Roads and Public Works,
Northern Cape Province ("the department"), to resurface the
6.6
km Remhoogte gravel road and 3.7 km Niekerkshoop gravel road. It
is not clear from the evidence what the actual tender price was.
From
an internal memo dated 12 March 2014 drafted by the acting director
legal services of the department, handed in evidence during
the
trial, it would appear that the value of the tender was in the order
of R1 543 367.26. This amount was not clarified in evidence
apart
from the fact that the respondent testified that he tendered for an
amount of approximately R1.6 million. He then subcontracted
the work
to the appellant, an earthmoving contractor, on the advice of Mr
Hendrik Petrus Greeff ("Mr Greef'), an engineer
in the employ of
the department at the time, who was appointed as a project manager
for the two mentioned road works.
[5] The
appellant quoted to the respondent an amount R75 000.00 per km on
each of
the resurfaced road plus VAT. He says that the respondent was
uncertain of the price he quoted and constantly telephoned his
attorney
to verify the figures. The .appellant convinced him to
.contact Mr Greeff. He says that, the respondent knew of the R75
000.00
per km quotation for the works and its affordability. He
further intimated that when he gave him this quotation he did not
know
of the price the respondent had quoted to the department for the
resurfacing of the two roads. After the respondent had spoken to
Mr
Greeff, the appellant says, he gave him the green light to carry out
the works with an understanding that he would pay him R75
000.00 per
km.
[6] The
appellant went on to say that Mr Greeff confirmed with him that he
discussed
the R75 000.00 quotation with the respondent and that the
latter would be in a position to pay him. He then set about to
resurface
the road as orally agreed. He completed the first stretch
and proceeded to the next. About three to four days before completion
of the second gravel road the respondent paid him R300 000.00 on the
first 4.9 km of the first road. The appellant informed him
of the
shortfall of R118 000.00 on the first road to which he responded that
he only received R330 000.00 from the department and
that he needed
R30 000.00 to pay his workers. At a later stage the respondent paid
him R336 000.00 for the second road. The appellant
enquired from him
about the balance of the monies owed and he informed him that he
would pay him R100 000.00 at the end of the
next month. He later
reneged alleging that he had not received any further payment from
the department. At some stage the appellant
received a letter dated
01 August 2014 from the respondent's attorneys indicative that he
will not receive any further payment
from the respondent.
[7] Mr
Greeff confirmed having informed the respondent that he quoted the
department less
for the first road but more for the second road and
that he would be able to afford the R75 000.00 tariff as quoted. The
respondent
agreed to pay the appellant. As a rule, Greet said, a
contractor cannot subcontract more than 25% of his contract price. In
respect
of the first road he intimated that the respondent's tariffs
did not show any profit in respect of works, however, with the
resurfacing
of the second road the respondent would have made a
profit. The respondent denied that Mr Greeff advised him that if the
quotations
he submitted to the department for the two projects were
taken together he would be able to afford the R75 000.00 tariff as
quoted
by the appellant.
[8] The
respondent intimated that he obtained the appellant's contact numbers
from Mr Greeff
who said he must make use of his services because the
appellant was an efficient earthmoving contractor. Although not
certain,
he said, there was a friendship of some sorts between the
appellant and Mr Greeff. It was remarkable to him that when he called
the appellant he was knowledgeable of the project and was immediately
available to inspect the roads. He confirmed that the appellant
quoted R75 000.00 per km for the works. He further says that the
appellant informed him that he required direct payment from the
department. He in turn told him that he could not afford the amount
in question because he quoted less than R60 00.00 to the department.
[9] The
respondent categorically denied that there was an agreement that he
would
pay the appellant R75 000.00 per km for the works. He further
intimated that he informed the appellant that there was a risk that
he could lose the contract with the department if he engaged a
subcontractor. Out of this conversation, the respondent says, the
parties understanding was that the appellant would not do the work
anymore. All of a sudden and to his amazement he saw the appellant
busy re-graveling the first road. Possibly, the respondent says, he
may have discussed the matter with Mr Greeff. However, he intimated
having had no quibbles with the appellant carrying out the works.
[10]
The respondent testified having received approximately R400 000.00
from the department, being the full
payment for the first road, even
though the work on that road was not yet completed. He then paid R300
000.00 to the appellant
for that gravel road. He denied that he told
the appellant that he received R330 0000.00 from the department. He
says the appellant
merely called him regarding the difference in
payment, in the amount of approximately R115 000.00, which he paid
over to him when
he effected the second payment for the second road.
He worked out a payment of about R62 000.00 per km on the first road
and paid
same to the appellant. The appellant never provided him with
a written quotation or an invoice. He only received the invoices by
e-mail after he had already effected the payments, when the project
was already completed, and was taken aback.
[11]
Under cross-examination the respondent revealed that the relationship
between Mr Greeff
and the appellant was long standing. He was placed
in a precarious situation as an emerging contractor without any
machinery or
equipment to do the works. This was the first road that
he was engaged to maintain and was not well-versed in road works.
The Magistrate's
findings
[12] The
Magistrate could not comprehend that the appellant concluded the
contract described
without putting it in writing. It was illogical to
her that the appellant would make_ regular contact with Mr Hendrik
Petrus Greeff,
an engineer in the employ of the department, when he
had concluded the contract with the respondent. She reasoned that the
appellant
was aware that the respondent quoted less for the first
road and that one would have expected that he would obtain greater
certainty
on the terms of the agreement or at least put further
agreement in writing or secured the presence of an eyewitness which
he did
not do. The Magistrate was of the view that the alarm bells
were ringing when the appellant was paid less for the first gravel
road but nevertheless proceeded to resurface the second road. She
held that the appellant did not discharge the onus to persuade
her of
his version. As already alluded to, she dismissed his claim save for
the undisputed amount of R54 240.00 for the additional
work and
interest thereon at the mora rate of 9%. She also ordered the
appellant to pay costs on party and party scale.
The appellant's
grounds of appeal
[13]
The grounds of appeal to this Court are that the Magistrate erred:-
13.1 in
finding that the contradictions in the respondent's version were not
material
and that he was not truthful in his account.
13.2 in
not finding that the payment of R300 000.00 was only effected
approximately 30
days after the first portion of the 4.9 km stretch
of the first gravel road was completed and that at that stage the
appellant
was almost finished with the re-surfacing of the second
gravel road and that the work had to.be completed for purposes of
obtaining
payment.. .
13.3 in
finding that the appellant ought to have obtained more certainty on
the terms of the oral agreement.
13.4 in
not taking into account that the appellant became aware that the
respondent quoted less for the first
road at the stage when he had
nearly completed the second road.
13.5 in
not finding that the parties agreed that the respondent would pay the
appellant R75 000.00 plus VAT
per km of the re-gravelled road.
13.6 in
finding that the appellant did not discharge the onus to prove that
the respondent owed him an amount
of R297 354.00..
The Analysis:
[14] The
key issue arising for consideration in this appeal is whether the
parties orally agreed
to a contract fee of R75 000.00 per km of the
resurfaced road plus VAT on the amount. There are disputes of fact on
this aspect.
As already alluded to, the respondent categorically
denied that he agreed to this price. His version was that he quoted
to the
department an amount less than R60 0000.00 for the road works
and therefore he could not have agreed to the R75 000.00 tariff
because
this would not have redound to his benefit. The appellant's
own witness, Mr Greeff, confirmed that the respondent quoted less
than
the R75 000.00 for the 6.6 km stretch.
[15]
The
legal principles applicable to the determination of disputes of fact
where mutually destructive versions are presented to the
Court are
trite. The technique generally applied was laid down authoritatively
as follows in
Stellenbosch
Farmers' Winery Group Ltd
&
another
v Martell et Cie
&
others
[1]
:
'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; and
(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. an
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 prevail.'
[16] The
following dictum in
National Employers' General Insurance
Co
Ltd v Jagers
1984 (4) SA 437
(E) at 4400- G is also apposite:
'It seems to me,
with respect that in any civil case, as in any criminal case, the
onus
can ordinarily be discharged by adducing credible
evidence to support the case of the party on whom the
onus
rests.
In a civil case the
onus
is obviously not as heavy as it is in
a criminal case, but nevertheless where the
onus
rests on the
plaintiff as in the present case, and where there are two mutually
destructive stories, he can only succeed if he satisfies
the Court on
a preponderance of probabilities that his version is true and
accurate and therefore acceptable, and that the other
version
advanced by the defendant is therefore false or mistaken and falls to
be rejected. In deciding whether that evidence is
true or not the
Court will weigh up and test the plaintiff's allegations against the
general probabilities. The estimate of the
credibility of a witness
will therefore 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 plaintiffs case any more
than they do the defendant's,
the plaintiff can only succeed if the
Court nevertheless believes him and is satisfied that his evidence is
true and that the defendant's
version is false.'
[17]
It
is also trite that in the absence of demonstrable and material
misdirection by the trial Court, its findings of fact are presumed
to
be correct and will only be disregarded if the recorded evidence
shows them to be clearly wrong.
[2]
The Magistrate was of the view that all the witnesses were truthful
in their account. Her findings were largely based on the
probabilities.
The onus rested on the appellant to prove that he was
entitled to claim an amount of R75 000.00 per km from the respondent.
[18] In
an attempt to demonstrate that the Magistrate misdirected herself in
concluding as she
did much store was placed on the letter dated 01
August 2014 which was forwarded to the appellant by the respondent's
attorneys.
The appellant criticized the Magistrate for not taking
same into account. This letter, which forms the basis of the
appellant's
argument that he had concluded an oral agreement with the
respondent for the payment of R75 000.00 per km, reads in part:
'It is our
instruction that there was an agreement between you and our client
that you will subcontract on both these sites for
an amount of R75
000.00 p/km. Client advise, however, that the Department of Public
works indicated that the amount payable to
the subcontractor
constitute more than 50% of the profit and that client ran the risk
of losing the tender if that is the situation.
Client advise that
you then agreed to a lesser amount and client [paid] you R415 000.00
on the Remhoogte project and R225 000.00
on the Niekerkshoop project.
In total you received R640 000.00 from our client. It is, however,
our instruction that you now claim
an amount of R218 000.00 from our
client and it is our instruction that client is not indebted to you
[in] the said amount. In
light of the above it is our instruction to
bring it to your attention that our client is of the view that he
fulfilled his obligation
in terms of your agreement and any future
action by you [will] be defended.'
[19] I
am of the view that the aforesaid letter does not assist the
appellant in proving that,
he had.concluded.an oral agreement with
the respondent for the payment of R75 000.00 per km because while it
confirms that there
was an agreement for the payment of an amount in
issue it also expressly states that the parties agreed to an amount
less than
the R75 000.00.
[20] The
appellant was aware, at least at the time when he issued summons
against the respondent, that
the department had paid the latter less
than the amount he allegedly quoted for the construction of the 6.6
km road. This is what
is reflected on the record:
'Kammies: Ja. Nou
sien u hier die ander kotrakteur of die persoon met wie u
gekontrakteur het betaal nou al klaar vir u halfpad
sien u, gaan LI
aan met daardie werk?---- Ek was nie so ·bekommerd daaroor
gewees nie aangesien hy mos nou te min geld ontvang
het op die eerste
deel om my voluit te betaal. '
[21] The
appellant, on his version, accepted the respondent's word that he
received R330 000.00 from
the department for the 6.6 km road works.
How he could have, under these circumstances, expected more payment
from the respondent
for the 6.6 km road escapes me. He simply could
not justify more payment from the respondent for the first road.
[22] Ms
Siberhagen, for the appellant, contended that the respondent's
version was improbable.
She submitted that the respondent intimated
having quoted less than R60 000.00 for the works and then testified
that he paid R62
000.00 to the appellant. She argued that on the
respondent's version, that he computed an amount of R62 000.00 per
km, he ought
to have paid the appellant an amount of R346 332.00 and
not R300 000.00.
[23] Apparent
from the record is that the respondent explained that he quoted less
than R60 000.00
but further on during his examination-in-chief he
expatiated:
'Kammies: ..Nou as u
nou u berekeninge gemaak het by die betaling wat Mnr van der Merwe
nou gesoek het op daardie Remhoogte projek,
op watter bedrag het u
uitgekom---Ek het gekom op die bedrag wat hy, wat ek horn gegee het,
dit was die eindbedrag wat ek sou moes
vir horn betaal het.
Kammies: wat was die
bedrag gewees?--- Dit was R600 000.00
iets gewees,
ek
kan
nou net nie die korrekte bedrag..
.(tussenbei)....
Kammies: Ja teen
watter kilometer tarief ja? ---Ek het horn uitgewerk op,
ek dink
R62 000.0 0Q volgens what hy ,na my gemaak het dat. Hendrik jy
skuld my nog R115 000.00.'
The respondent went
on to say that the R62 000.00 was the amount he could afford.
[24] In
my view, whether the respondent's first payment of R300 000.00 to the
appellant was for
the 4.6 km of the 6.6 km gravel road, as the
appellant sought to argue, does not take the issues any further
because according
to the respondent he received the full payment of
R400 000.00 for the first 6.6 km road out of which he paid the
appellant R300
000.00. At no stage was he ever informed that he will
receive further payments from the department in respect of the first
road
and there is no ·evidence to the contrary. The difficulty
with this case is that there is no documentary evidence in the
form
of Bid documents or the main service level agreement between the
department and the respondent showing the actual amount of
the tender
or evincing the precise amounts the respondent received from the
department or was entitled to receive. It was for the
appellant to
adduce this evidence or at the very least request the respondent to
discover the necessary documentary evidence.
[25] The
appellant took issue with the finding by the Magistrate that the
alarm bells were ringing
when he was paid less on the first gravel
road but nevertheless proceeded to resurface the second road. It was
contended on his
behalf that the Magistrate erred in not finding that
the payment of R300 000.00 was only effected approximately 30 days
after the
first portion of the 4.9 km stretch of the first gravel
road was completed and that at that stage the appellant had almost
finished
re-surfacing of the second gravel road and that the work had
to be completed for purposes of obtaining payment.
[26] The
point the Magistrate made was that the appellant was paid less for
the first road yet he proceeded
to finalize the second road on behalf
of the respondent whom he said was unable to comply with his
contractual obligations. The
Magistrate cannot be faulted in having
remarked that one would have expected that the appellant would obtain
greater certainty
on the terms of the agreement or at the very least
have a further agreement in writing with the respondent. In the
appellant's
say so the respondent defaulted in his contractual
obligations. It does not matter that the appellant was left with two-
or, three
days to finish the second road or that 75% of the work had
already been done on the second road at that stage. He ought to have
ceased any further road works. In truth, the appellant did not act
like an aggrieved party.
[27] Having
had the benefit of a careful study of the record I am of the view
that none of the parties
did exceptionally well in presenting their
cases. In my view, the appellant fared badly under cross-examination
on the aspect why
he carried on with the work when he had already
been underpaid. For instance he testified:
'Kammies: Nou toe u
nou sien u is nou alreeds onderbetaal vir die eerste gedeelte van die
werk, die Remhoogte werk, hoekom gaan
u toe aan met daardie
Niekerkshoop werk---Omdat Mnr Greeff vir my gese het die verskil in
sy tender maak dit day hy sal my op die
tweede werk kan die volle
bedrag betaal...'
Later on he was
questioned:
'Kammies: maar dit
is wat ek glad nie verstaan nie Mnr van der Merwe u het 'n kontrak en
dagvaar ons klient op sterkte van daardie
kontrak, maar elke keer
gaan maak u eers seker, kan die man betaal?----Nee ek het net daardie
eenkeer vir Mnr Greeff gebel, dit
is voor ek nog nie werk begin bou
nie.'
On further probing
he intimated:
"Nee, nee dit
was al op die eerste werk se betaling, die eerste betaling met ander
woorde dat ek vir Mnr Greeff geskakel en
gese maar hy het my nou al
soveel, hy het my soveel onderbetaal en hy het gese dat daar sal
genoeg fondse wees om my te betaal.'
He later gave in and
said he contacted Mr Greeff on two occasions. On the second occasion
he had already received less payment for
the first road and wanted to
establish if he would be paid the balance due. What is strange about
the appellant's responses is
that he does not contact the respondent
whom he clinched a deal with but contacts Mr Greeff.
[28] The
appellant also conceded that he carried on working on the second
road, the 3.7 stretch,
while knowing that he had not been paid in
full for the first road.
He reasoned
"omdat
Mnr Greeff vir my
gese
het die verskil in
sy
tender
maak ditJ:iat dit hy..sal my .op die. tweede werk kan die vol/e. be
drag.b etaal. lt.
was oot for Mr Greeff to make this kind of an
arrangement with the appellant. The appellant was subcontracted by
the respondent
not Mr Greeff. When confronted that Mr Greeff was not
his employer he intimated
"nee dit
is
korrek maar hy
het insae gehad en hulle twee het
mos
gekonsulteer oar die
betaling."
[29]
It came out during the respondent's cross-examination that, absent
any agreement on the payment of
the R75 000.00, given that he
remained liable to pay the appellant he should have evicted him from
the site when he realized that
he was carrying on with the works.
That may well be. It is unfortunate that the respondent's educational
qualification were not
placed on record. One gathers from the
appellant's evidence that when he told the respondent that his
services were R75 0000.00
per km the latter was out of his depth
calling his attorney constantly in an attempt to make calculations on
the affordability
of the quotation. One can infer from this that he
was unsophisticated. What compounds his situation is his lack of
knowledge on
road construction.
[30]
The argument that it was improbable that the appellant would not have
left Prieska to set up his machinery
in Carnavon if there was no
agreement that the respondent will effect the payment of the agreed
price is sound. However, this should
be viewed in context. As already
alluded the respondent appeared not to be sophisticated. He also on
many occasions during his
evidence tried to paint a picture that the
appellant and Mr Greeff had a relationship of some sort to the point
that Mr Greeff
advised him that his business entity could only use
the appellant's services on the project. He says he had no quibbles
when noticing
the appellant busy on the site. As he puts it
"Hy
[the appellant] het dalk Mnr Greeff
se
woord gevat dit
is
hoekom hy op site gekom het."
[31]
The respondent's innuendo that there was some form of friendship
between the appellant and Mr Greeff
is not farfetched. I say this
because it was not in dispute that the appellant and Mr Greeff knew
each other. Mr Greeff directed
a request to the department for the
payment in respect of the works to be effected directly to the
appellant, the subcontractor,
although he says this was at the behest
of the respondent. He did not inform the appellant that in terms of
the memo dated 12 March
2014, in response to the direct payment, the
department
bad this to say:
"the
contractor may not award more than. 25
%
of the contract value
to any other enterprise if that enterprise does not have a B-BBEE
status equal or higher than
[that of]
the contractor."
It
was not in dispute that the appellant was a level 4 contributor
whereas the respondent a level 3 contributor in terms of their
BEE
status. In addition, the appellant testified that Mr Greet certified
the work as complete for purposes of issuing the payment
certificates
even though the 6.6 stretch was not completely resurfaced.
[32]
Mr
Kammies, for the respondent, contended that it was improbable that
the respondent would agree to an amount which would leave
him with no
benefit out of the contract. I agree that it would be absurd. In the
end, it cannot be said that the respondent was-mendacious
to the
extent that his version ought to have been out rightly rejected as
false. It is plausible, as he says, that he could not
have agreed to
the R75 000.00 per km tariff if he had quoted less than this amount
to the department. Put differently, it is probable
that the parties
may have agreed on a tariff less than the R75 000.00 per km.
[33]
I
am driven to the conclusion that I cannot on the material before me
come to the conclusion that the appellant discharged the onus
to
prove that he had an oral agreement with the respondent that his
tariff for the earthworks would be an amount of R75 0000.00
per km
plus VAT. That being the case, I do not find any basis to interfere
with the conclusion reached by the Magistrate. On these
conspectus
the appeal falls to be dismissed with costs. In the result I make the
following order.
Order:
1.
The appeal is dismissed with costs.
MV Phatshoane ADJP
I
agree
Snyders
AJ
APPEARANCES:
FOR THE
APPELLANT:
Adv A.S Sieberhagen
Instructed by Duncan & Rothman Attorneys
FOR
THE RESPONDENT:
Adv EJP Kamies
Instructed by Fletcher's Attorneys
[1]
2003 (1) SA 11
(SCA) at 14 -15 para 5.
[2]
S
v Hadebe
&
Others
1997 (2) SACR 6
41 (SCA) at
645 e-f,
Bernert v Absa Bank Ltd
2011 (3) SA 92
(CC) para
106,