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[2016] ZAKZDHC 10
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J & H Building Supplies CC v Masiqhame Trading 379 CC and Another (10313/2012) [2016] ZAKZDHC 10 (15 March 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
Case
no: 10313/2012
DATE:
15 MARCH 2016
Not
reportable
In
the matter between:
J
& H BUILDING SUPPLIES
CC
......................................................................................
PLAINTIFF
And
MASIQHAME
TRADING 379
CC
............................................................................
1
st
DEFENDANT
BONGANI
TRUELOVE
ZULU
................................................................................
2
nd
DEFENDANT
Coram:
JEFFREY AJ
Heard
:
9, 10, 11, 16 September; 1 October 2015
Delivered
:
15 March 2016
Summary:
Sale – Building materials - Proof
of delivery - Agreement - Interpretation – Terms and conditions
as to time of payment
– whether payment postponed until first
defendant paid by its employer, the KwaZulu-Natal Department of Human
Settlements
JUDGMENT
Jeffrey
AJ
[1]
The plaintiff sues the first and second
defendants jointly and severally for the payment of the sum of
R13 526 254.38,
being the balance allegedly due, owing and
payable in respect of certain building material sold and delivered by
it to the first
defendant; interest on the aforesaid balance
a
tempore morae
and costs.
[2]
The first defendant was appointed in
writing as an implementing agent by the KwaZulu-Natal Department of
Human Settlements (known
at the time of the first defendant’s
appointment as the Provincial Department of Housing, KwaZulu-Natal)
to implement the
rectification of 2 086 wire wall houses at Edendale
in accordance with an agreed scope of works. In order to fulfil
its obligations,
the first defendant
inter
alia
purchased certain building
materials from the plaintiff which, so the plaintiff alleged, it duly
delivered to the first defendant’s
site representative during
the period April 2010 to November 2010.
[3]
The plaintiff pleaded and it is common
cause that the first defendant would pay the plaintiff for all
building materials supplied
on a 15 day payment cycle calculated from
the date of supply of the materials.
[4]
Clause 3.1.5 of the parties’
agreement provided that: “(The first defendant) agrees to pay
(the plaintiff) the invoice
amount as presented in stages for the
supply of building materials without any deduction whatsoever.’
Added in manuscript
to clause 3.1.5 were the words: ‘When
payment is received by (the plaintiff) the corresponding
acknowledgment of debt will
be cancelled.’
[5]
The
defendants pleaded that in terms of this clause: ‘(a) the
plaintiff would from time to time submit invoices to the first
defendant reflecting the building material supplied and the agreed
costs thereof; (b) when progress payments were received by the
first
defendant in stages from (the KwaZulu-Natal Department of Human
Settlements) … the first defendant would,
from
those progress payments received in stages
[1]
,
make payment to the plaintiff against the price of the building
materials supplied by the plaintiff.’
[6]
The second defendant is the sole member of
the first defendant. The plaintiff’s cause of action
against him is based
on two written acknowledgments of debt in terms
of which he acknowledged that he was indebted to the plaintiff,
jointly and severally
with the first defendant, for payment of the
sum of R7 418 976.94 and for an additional sum of
R6 986 281.14.
The second defendant also undertook to
pay all legal costs occasioned by the Plaintiff in recovering any
amounts due in terms of
the acknowledgment of debts on the scale as
between attorney and own client.
[7]
The defendants pleaded that the first
acknowledgment of debt executed during July 2010 by the second
defendant did not correctly
record the agreement between the parties
as I have set out in the preceding paragraph and that it was the
common intention of the
parties that the agreement would contain the
following paragraph: ‘The acknowledgement of debt is in regard
to building materials
supplied to the Edendale Wire Wall
Rectification Project. The creditor agrees that payment of the
said amount by the debtor
would only be effected upon and from
payments to the debtor by the Department of Human Settlements KZN
pursuant to the contract
for the construction of houses for that
department’. The defendants pleaded that this
acknowledgment of debt fell to
be rectified accordingly.
[8]
The plaintiff replicated that if it is held
that the common intention of the parties was that as pleaded by the
defendants, ‘it
was nonetheless implicit in such intention that
payment would be made within a reasonable time; and the terms
contended for by
the defendants amounts to a condition, which has
been fictionally fulfilled in that the department has not paid the
first defendant
because the defendants failed to perform their
obligations to the department.’
[9]
The defendants admitted in their plea that
building materials were supplied by the plaintiff to the first
defendant but they denied
the value of the building materials so
supplied.
[10]
When the trial commenced, Mr
Mohammed
Essop
who appeared for the defendants,
informed me that his instructions were to apply for an adjournment
only and if an adjournment
was not granted by me, he would request
the Court for leave to be granted to his instructing attorneys to
withdraw as the defendants’
legal representatives. The
application for an adjournment was made and it was strenuously
opposed by Mr
Kissoon Singh SC
,
who appeared with Mr
Collingwood
for the plaintiff. The application was dismissed by me
primarily because it was clear from the orders of this Court dated
23
March 2015, 21 April 2015 and 12 May 2015 that the true reason for
the defendants seeking an adjournment was merely to delay
the trail
for as long as possible. The second defendant’s excuse of
a lack of money for not being ready to proceed
with trial rang
somewhat hollow in the face of the earlier pre-trial procedure before
judges in chambers at which the second defendant
was specifically
advised of the consequences of not being ready for trial or failing
to engage legal representation.
[11]
Undeterred by my refusal of the application
for a postponement, the defendants, represented in person by the
second defendant, pressed
on with their defence.
[12]
The plaintiff, as a consequence, was put to
the task of proving the elements of its claim by the defendants.
I am indebted
to Mr
Kissoon Singh SC
,
Mr
Collingwood
and their instructing attorneys for meticulously preparing a spread
sheet and cross-referencing this with the relevant delivery
notes,
invoices and other relevant documents. This reduced the time of
the hearing – which exceeded the three days
initially allocated
for the trial - and it has made my task in resolving this matter more
manageable.
[13]
The plaintiff called several witnesses.
[14]
First, Mr Shameer Khan testified that he
was the sole member of Katsuba Trading CC. He said he was a
building contractor who
had been employed by the second defendant in
respect of the wire wall project at Edendale. Katsuba Trading
CC provided the
labour that built
temporary
structures for the residents of the wire wall house to move into
while the wire wall houses were demolished and permanent
structures
were built by Katsuba CC. The building materials were supplied
by Competitive Hardware CC. He said that
the defendants and the
first defendant’s project manager, Mr Jameel Shaik, told him
that the first defendant’s name
must never be mentioned on the
building site because there would be trouble as the labour that was
employed by Katsuba Trading
CC was drawn from the local community and
they had not been paid by the first defendant. In essence, he
said, Katsuba Trading
CC was a front for the first defendant -
Katsuba Trading CC had a site camp to which building material was
delivered and his employees
would then distribute this material from
the site camp to the individual building sites where they were
building. He said
that the supplier, Competitive Hardware,
stopped delivering building material when it was not paid by the
first defendant.
It was then that the plaintiff took over the
delivery of building materials. The delivery notes were
addressed to Katsuba
Trading CC because of the aforementioned
difficulty that the first defendant had with the local community in
not paying them.
On the instructions of the second defendant
and Mr Jameel Shaik, he employed a storeman to receive, check and
sign for the building
materials that were delivered by the
plaintiff. He employed Mr Nxumalo – known by his nickname
Bux – whom he
had known for some ten years and who he regarded
as a responsible person. The way the orders were placed, he
said, was he
would telephonically tell Mr Jameel Shaik what materials
were required and Mr Shaik would then tell the plaintiff what
materials
had to be delivered to the site. The plaintiff would
send a truck to the site with the materials that had been ordered.
On arrival the materials would be checked and signed off by Mr Bux
and the plaintiff’s representative. He said he had
seen
Mr Bux signing off the delivery notes acknowledging receipt on many
occasions. He said that he was familiar with Mr
Bux’s
signature and readily and with confidence identified his signature on
being taken through the relevant delivery notes
by Mr
Kissoon
Singh SC
save for a number signed by
one Victus (a storeman employed by Katsuba Trading CC in an area
known as Buffer),
Londiwe Gazu and
Nokuthula.
He added that Katsuba
Trading CC was employed by the first defendant until the end of
October 2010 and is still owed approximately
R2 400 000.00;
and, thereafter, Reclaim Africa was employed in its stead and it
received the building materials when
they were delivered to site by
the plaintiff. He stressed that it was never a term of his
agreement with the first defendant
that Katsuba Trading CC would only
get paid once the first defendant had been paid by the Department of
Human Settlements.
[15]
The plaintiff’s second witness was Mr
Haroon Franks. He testified that he was the sole member of
Reclaim Africa CC.
He was a building contractor, he said, and Reclaim
Africa CC was employed by the first defendant at the Edendale Wire
Wall Project
to demolish and reconstruct dwelling units at the site.
He said that he did not finish constructing the seventy double storey
dwellings he was engaged to build because he was not paid. He
went to see the Department’s official, Mr Cele, who told
him
that there was no money for the project meaning that the Department
had overspent on the project. He said he was owed
R7 200 000.00
by the first defendant. The plaintiff would deliver materials
to the site which were received by
his elder brother, Alpha, and his
assistant, Londiwe Gazu, as well as Nontula. These people were
employed by Reclaim Africa
CC. He knew and confirmed the
signature of Alpha on various delivery notes put to him but he said
he was uncertain of and
could not identify the signatures of the
other two employees.
[16]
The plaintiff’s third witness was Mr
Thokozani Eric Magagula, a representative of the Department of Human
Settlements.
He said he was employed by the Department as a
senior project manager responsible for low cost housing in the Tugela
area.
The Edendale Wire Wall Project fell under this area.
He referred to a cession agreement between the first defendant and
the
Department concluded on 20 August 2009 in terms of which the
first defendant instructed the Department to make payment to a
minimum
value of 1000 housed directly to Amawele Joint Venture. He
said that the total value of the project was R90 810 710.16
and after the cession was concluded the first defendant’s
invoices were paid. In December 2010 the funding for the
project was increased by R34 150 092.00 raising the total
value of the project to R124 034 128.36. The
total
sum paid to the first defendant according to the Department’s
records was R27 960 047.46 (R31 874 454.11
including VAT) and Amawele Joint Venture was paid R74 873 070.09
(R85 355 299.90 including VAT). The
total sum
including VAT paid to both the first defendant and Amawele Joint
Venture was R117 229 754.01. He denied the
suggestion by
the second defendant that the project had been undervalued.
[17]
The plaintiff’s fourth witness was Ms
Nomusa Primrose Sibisi. She testified that she was the
proprietor of Uqotho Projects
and Construction and was employed as a
building sub-contractor by Katsuba CC on the Edendale Wire Wall
Project during 2009 and
2010. She said that she saw building
materials being delivered to the site on many occasions and she
continued building housing
units until November 2010 using the
building materials that had been delivered. She identified the
persons who delivered
the building materials and said they were known
to her as Osman and Abdul and that she had seen them outside the
Court room.
She denied the suggestion put to her under
cross-examination that she had sat with Osman and Abdul outside the
Court room.
She added that she recognised them from the
Edendale building site.
[18]
The plaintiff’s fifth witness was Mr
Yunus Suleman Mansoor. He testified that at material times he
was employed by the
plaintiff doing administrative work and visiting
building sites. He said that he was responsible for preparing
the invoices
for the building materials supplied to the Edendale site
and that he also assisted in delivering the materials but the person
who
was responsible for all the deliveries was Mr Abdul Mansoor.
He identified his signature – signed as Yunus - on all
the
relevant delivery notes and said that he had received the materials
from the supplier on behalf of the plaintiff and that Mr
Bux had
received the materials. He confirmed that Mr Bux had signed the
relevant delivery notes in his presence. Victus
also received
delivery from him and signed the relevant delivery notes in his
presence.
[19]
The plaintiff’s sixth witness was Mr
Osman Mansoor. He testified that at material times he was
employed by the plaintiff
and accompanied Mr Abdul Mansoor in
delivering the materials to the Edendale site. He said that the
suppliers’ trucks
would deliver the materials to the site, they
would check the material on behalf of the plaintiff and sign off the
delivery notes
and he saw Mr Bux signing the delivery notes on behalf
of Katsuba Trading CC. He identified the relevant delivery
notes that
he and Mr Bux had signed as well as those signed by him
and Londiwe Gazu.
[20]
The plaintiff’s seventh witness was
Mr Abdul Mansoor. He testified that he was employed by the
plaintiff doing receiving
and dispatching. He said the
plaintiff’s supplies delivered the materials to the site camp
at the Edendale site.
A delivery note was prepared and signed
by him or sometimes Mr Osman Mansoor or Mr Yunus Mansoor. Mr
Bux received the materials
on behalf of Katsuba Trading CC and when
Reclaim Africa took over from Katsuba Trading CC, Victus, Londiwe
Gazu or Nokuthula received
delivery of the materials on behalf of
Reclaim Africa. He identified all these signatures.
[21]
The plaintiff’s eighth witness was Mr
Hassan Yacoob Mansoor. He testified that he was sole member of
the plaintiff that
he started in 2008 doing the supply of building
materials. He said he had passed grade 10 and then went to work
in the family
businesses. In 2010 he met the plaintiff’s
project manager, Mr Jameel Shaik, and they discussed the supply of
building
material to the Edendale site. Mr Shaik told him
that the first defendant was involved with 2 080
somewhat units and the plaintiff would be required to supply building
materials
from foundations to roofs for about 700 units. This
was the first time that he had been involved in such a large
project.
He was given a bill of quantities by Mr Shaik and he
was able to prepare two quotation that he gave to Mr Shaik –
one for
single storey dwellings and the other incorporating double
storey dwellings. He believed Mr Shaik who told him that this
was a good opportunity to get involved in other projects that the
first defendant had and, if he proved himself on the Edendale
project, the plaintiff would be given further lucrative work.
Mr Shaik told him that the first defendant had a CIDB rating
that it
had the financial capacity and means to execute the type of large
contract that the Edendale was and that he should rest
assured that
the first defendant was financial stable and would be able to pay for
the plaintiff. The plaintiff, he said,
would order building
materials from its suppliers but, because it was a very small
business and did not have any of its own trucks,
its suppliers would
deliver in their own trucks to the Edendale site and the goods would
be received and checked by the plaintiff’s
representatives on
site and then delivery was given to Katsuba Trading CC’s or
later, Reclaim Africa’s, representatives.
With regard to
payment of the plaintiff’s invoices, he testified that by the
end of May 2010 the sum of
R3 087 681.00
was payable but the plaintiff only received an amount of
R600 000.00. When he queried this with
Mr Shaik he was
told that Mr Shaik had R600 000.00 on hand so he had paid this
amount but the balance would be forthcoming
‘within a week or
two’. Mr Shaik asked him to carry on supplying the first
defendant with building materials
giving him the assurance that the
first defendant would be good for payment. Further materials
were supplied by the plaintiff
but by 8 June 2010, R2 865 793
was payable by the first defendant and only R200 000.00 was
received by way of the
first defendant’s cheque that, after a
complaint about the clearance period made by Mr Mansoor, Mr Shaik
agreed to deposit
in his own account and pay the plaintiff provided
the plaintiff kept on supplying building materials to the first
defendant. Mr
Mansoor said that supply was halted because the
plaintiff was not being paid. A meeting was then arranged
between himself
and the second defendant. At this meeting on 22
July 2010 Mr Shaik made a number of amendments to a so-called
acknowledgment
of debt that was prepared by him and that the second
defendant signed. The plaintiff then continued supplying
building material
to the first defendant because, according to Mr
Mansoor, he was lulled into a false sense of security that the second
defendant
and his wife, whom Mr Shaik told Mr Mansoor, also had
numerous contracts with the Department and earned large sums of
money, were
good to pay the plaintiff should the first defendant
default in its obligations. But, Mr Shaik also assured Mr
Mansoor with
promises that payment would be forthcoming shortly and
that he – Mr Mansoor – should not be concerned. But
Mr
Mansoor said that plaintiff’s suppliers from whom the
building materials were purchased for delivery to the first
defendant,
were putting pressure on the plaintiff to settle what was
due to them. In late November 2010 the plaintiff declined to
make
any further deliveries to the first defendant. Mr Mansoor
complained once again to Mr Shaik about non-payment. They
discussed the matter and agreed that they would hold the matter over
until January 2011 after the annual builders’ shut-down
period.
When they met in the New Year the second so-called
acknowledgment of debt was signed by the second defendant after
Mr
Shaik had once again assured Mr Mansoor that payment would be made
shortly by the first defendant. But only an amount
of
R600 000.00 was paid to the plaintiff. At no stage, Mr
Mansoor testified, did the second defendant or Mr Shaik inform
him
that the plaintiff did not
effect all the
deliveries or that some of the delivery notes were false. He
said he first heard about the suggestion by the
first defendant that
some of the delivery notes may have been fabricated and that this was
being investigated by the police, about
two weeks prior to the
hearing.
[22]
The second defendant conducted the
cross-examination of the plaintiff’s witnesses. The first
defendant, of course, is
not a trained lawyer and I have made
allowance for that. But despite his best efforts, his
cross-examination was not effective
at shaking their evidence.
Indeed, if anything, it served to underscore the veracity of their
evidence in chief. The
demeanour of all the plaintiff’s
witnesses was satisfactory. The members of the Mansoor family
who gave evidence about
the delivery of the building materials that
were supplied by the plaintiff to the first defendant, gave this
evidence as they understood
the position to be. They did not
prevaricate and directly answered the questions put to them both in
chief and under cross-examination.
The manner in which they
conducted themselves in the witness box was such that I am able to
confidently accept their evidence as
to what transpired.
[23]
The first witness called by the defendants
was Mr Jameel Shaik, the first defendant’s project manager.
He denied that
he had ‘solicited’ the plaintiff and
testified that, on the contrary, the plaintiff had offered its
services to deliver
building material to the first defendant.
He conceded that building materials had been delivered to the first
defendant and
houses had been built, but he said that difficulties
arose when an official from the Department, Mr Cele, refused to pay
the first
defendant’s invoices that had been submitted to it.
After much delay and a commission investigating the problems on
the
site the Department informed the first respondent that, unless it was
ordered by a Court to do so, it refused to pay the first
defendant’s
invoices. He said that the plaintiff ‘
became
a statistic and a casualty in this whole process.’ The
first defendant was suing the Department, he added.
As far as
the placement of orders was concerned he denied, contrary to what was
said by the plaintiff’s witnesses, that he
– Mr Shaik –
had placed the orders with the plaintiff. He had the
unfortunate habit of not answering questions
directly succinctly that
were put to him during cross-examination. For instance, when
asked a simple question: if he had
a problem with the invoicing done
by the plaintiff, did he write to the plaintiff setting out how the
invoice had to be prepared,
he set off on a long, rambling and
irrelevant discourse. This manner of answering questions and his
haughty demeanour in the witness
box left me with the distinct
impression that he was trying to avoid giving direct answers and this
raised serious doubt in my
mind as to the veracity of his evidence.
[24]
The defendants’ second witness was Mr
Sthembiso Absolem Nxumalo. He
testified that he was also known as Bux and that he was employed by
Katsuba CC during 2010.
He said that he received building
materials from the plaintiff at the Edendale site. He
identified his signature on various
delivery notes but either did not
recognise his mark or denied that the mark was his on several of the
delivery notes. Disturbingly,
he said that he had retained the
original delivery notes after his employment by Katsuba CC came to an
end. He did not give
a satisfactory explanation in this
regard. He was evasive as to when his employment came to an end
and the reason for his
retaining the original delivery notes.
He said that he had deposed to an affidavit during July 2015
regarding the delivery
notes and in it he alleged that the signature
or mark on certain delivery notes was not his. His evidence was
unsatisfactory.
It runs contrary to the inherent probabilities
of the matter.
[25]
I am satisfied that the plaintiff has
established on the balance of probabilities that all the building
materials as alleged by
it were delivered to the first defendant and
that it has established the amount of its claim.
[26]
With regard to the issue of when payment
was to be effected the starting point is, of course, the terms of the
parties’ agreement.
As
Wallis
JA said in
Dexgroup (Pty) Ltd v
Trustco Group International (Pty) Ltd and Others
2013
(6) SA 520
(SCA) para 16: ‘… the developments in
the interpretation of written documents reflected in
KPMG
Chartered
Accountants (SA) v Securefin Ltd and Another
and
Natal
Joint Municipal Pension Fund v Endumeni Municipality
… make it clear that in interpreting any document the starting
point is inevitably the language of the document but it falls
to be
construed in the light of its context, the apparent purpose to which
it is directed and the material known to those
responsible for
its production. Context, the purpose of the provision under
consideration and the background to the preparation
and production of
the document in question are not secondary matters introduced to
resolve linguistic uncertainty but are fundamental
to the process of
interpretation from the outset.’ The wording of clause
3.1.5 of the parties’ agreement is
clear that the plaintiff would not be obliged to wait for the first
defendant to be paid
by the Department of Human Settlements before
payment to it was due by the first defendant. This is
underscored by the context
in which this agreement was concluded as
this emerged from the evidence at the trial and as I have outlined
above.
[27]
The defendants’ defence to the
contrary cannot, therefore, be sustained. Nor can the
defendants’ claim for rectification
of the first acknowledgment
of debt since this claim is predicated upon an interpretation of
clause 3.1.5 of the parties’
agreement that I have rejected.
[28]
In the premises, I grant judgment for the
plaintiff against the first and second defendants jointly and
severally for:
1.
Payment of the sum of R13 526 254.38.
2.
Interest thereon
a tempore morae
from
22 March 2012 to date of final payment.
3.
Costs of suit, save that as against the second defendant such costs
shall be on the scale as between attorney and client.
A
G JEFFREY
ACTING
JUDGE
Appearances
For plaintiff: Mr
A K Kissoon Singh SC (with him Mr A D Collingwood)
Instructed
by: Bandulal & Pillay Attorneys
Ref.
Mr R P Bandulal
For 1
st
and 2
nd
defendants: 1
st
defendant in person
Application
for adjournment only – Mr A A Mohammed Essop
Instructed
by: Abdul Shaikjee Attorneys
Settlement
negotiations only – Mr V Badri
Instructed
by: Vinesh Badri & Partners Attorneys
Closing
argument only – Mr J P Broster
Instructed
by: Cox Yeats Attorneys
Ref.
Mr Peter Barnard
[1]
Emphasis
added