About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2016
>>
[2016] ZAGPPHC 146
|
|
Van Wyk and Others v Topaz Sky Trading 146 (Pty) Ltd and Others (21669/2014) [2016] ZAGPPHC 146 (16 February 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 21669/2014
DATE
OF HEARING:
1
0 &
1
1
November
2015
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
NECRON
PROPERTIES (PTY)
LTD
Plaintiff
and
AVSONS
HOLDINGS (PTY)
LTD
Defendant
J
U D G M E N T
OLIVIER,
AJ
INTRODUCTION
[1]
Both the plaintiff and the defendant are private companies registered
and incorporated in terms of the laws of South Africa.
[2]
The plaintiff, represented by Dr Henk Buytendorp, and the defendant,
represented by Mr Ahmed Vadia, concluded a verbal agreement
('the
agreement') during or about May 2013 for certain building and
renovation work at erf 295 Kempton Park, a property belonging
to the
Defendant ('the property'). The precise terms of this agreement are
in dispute.
[3]
The agreed price for the initial constrl.Jction project was R 1
million rand, excluding extra work or materials. Sometime during
the
building and renovation work, the parties agreed to the performance
of extra work and rendering of extra materials. The cost
of this was
R 567 400. This was admitted in defendant's plea. '
[4]
Sometime during July 2013 a building inspector accompanied by the
SAPS stopped construction on two occasions due to the absence
of
approved building plans. No further construction has taken place
since then.
[5]
The plaintiff claims payment of R 232 000 from the defendant, which
is the amount still owing for the work rendered, according
to the
plaintiff.
[6]
The defendant counterclaims for specific performance - procurement of
building plans and the completion of the building works;
in the
alternative, it prays for cancellation of the contract and payment of
R 390 500, which defendant claims is the amount by
which it overpaid,
plus interest; and further, special damages for loss of rental income
from 1 September 2013 amounting to R 3,276
million, which amount
excludes escalations, levies and additional amounts.
[7]
The parties agree that the total payments made by the defendant to
the plaintiff is R 1 250 000, and that the rebate given by
the
plaintiff for work included in the original contract but not
performed is R 85 400.
[8]
The essential issues in dispute are:
(a)
the content of the initial agreement, specifically whether it was
agreed from the outset that the plaintiff should
divide the larger
building into smaller shops; or whether the parties had only agreed
on the repair of the building, which had
been damaged in a fire at
some stage prior to the agreement. Plaintiff says it is the former,
and that the subdivision was agreed
on only in July 2013 and
therefore was not part of the initial agreement. Defendant contends
that it was part of the initial agreement.
(b)
Whether or not the plaintiff knew how much rent could be secured from
the letting of the shops, once the building had
been subdivided. This
is of importance in respect of the claim for special damages.
(c)
Who was responsible for procuring the approved building plans for the
subdivision. The defendant claims it was plaintiff's
responsibility.
The plaintiff contends that the question of building plans arose only
in July 2013 when the additional building
work was
stopped by the building inspector.
Plaintiff contends he then 'facilitated'
the appointment of Mr
Nothnagel to procure the building plans.
CALCULATION
OF PLAINTIFF'S CLAIM
[9]
The outstanding balance payable to the plaintiff according to
its records is R 232 000, calculated as follows:
R
1m + R 482 000 (extras) - R 1250 000 (payments by defendant) = R 232
000.
The
R 482 000 is calculated as follows: R 567 400 - R 85 400. A more
detailed breakdown of the R 567 000 is given in a cost and
payment
summary in Annexure A to the Pleadings Bundle on p.7.
CALCULATION
OF DEFENDANT'S COUNTERCLAIM FOR LOSS OF RENTAL INCOME
[10]
The amount of the damages claimed for loss of future rental income is
calculated as follows: R 126 000 per month (28 units
@ R 4500) since
September 2013. Defendant claims this amounts to R 3,276 million.
PLAINTIFF'S
VERSION
[11]
The version advanced by the plaintiff is essentially as follows. The
initial agreement was for the repair and renovation of
the building
earlier damaged in a fire. There was no agreement that the plaintiff
would procure any building plans. There was no
need for building
plans at that stage as there were no alterations to the structure of
the building.
[12]
Near the completion of the renovations the defendant approached the
plaintiff to subdivide the property into smaller shops.
Securing
building plans was the responsibility of the defendant. When
construction stopped due to the absence of building plans,
the
plaintiff facilitated the appointment of Mr Nothnagel on behalf of
the defendant to draft and get approval for the building
plans.
[13]
The plaintiff was unaware of the amount that the defendant would have
received from rental income.
DEFENDANT'S
VERSION
[14]
The version put forward by the defendant is essentially as follows.
The initial agreement was for the subdivision of the building
into 26
smaller shops. It was later agreed to add an additional 2 shops and
to make some other changes to the building
-
splitting up electricity points, paving and expanding the toilets.
[15]
It was agreed that the plaintiff would procure building plans. Mr
Vadia, the defendant's representative, was a person with
no
experience in the building industry who was looking for a "one
stop shop". Thus, the plaintiff was contracted to provide
all
services, including the procurement of building plans.
[16]
The agreed-upon finalisation date and handover would be around middle
August; the plan was for the units to be let from 1 September
2013.
The plaintiff knew this. (This is not in dispute.)
[17]
Construction was commenced without approved building plans during May
2013, but it was only when construction ceased that the
defendant
became aware that building had commenced illegally without building
plans. The defendant paid R 44 000 to plaintiff,
which was paid over
to Mr Nothna9el for the building plans, “which was dealt with
and negotiated by the plaintiff as part
of the initial agreement".
In an attempt to mitigate its loss following the termination of
construction, the defendant started
negotiating with Mr Nothnagel
directly in an attempt to procure the building plans.
[18]
The plaintiff acted mala fide in starting the construction without
the requisite approval from the local authority. The construction
was
stopped due to plaintiff's negligence. The Plaintiff thus failed to
fulfil its contractual obligations towards the defendant.
[19]
The defendant never queried or rejected invoices until building was
stopped. The plaintiff never informed Mr Vadia of the need
for plans.
PLAINTIFF'S
WITNESSES
[20]
Two witnesses testified on behalf of the plaintiff: Dr Buytendorp and
Mr Nothnagel.
Dr
Buytendorp
[21]
Dr Henk Buytendorp is the CEO, and a shareholder, of the plaintiff,
who has been in the building industry for 40 years. He
testified that
the original agreement was for the restoration of a portion of a
building that had been damaged in a fire, at a
cost of R 1 million,
for which no building plans were required as the structure would not
have been altered. This work entailed
among others, demolishing
walls, redoing the roof, and so on. This phase ('phase 1') took about
3 months to complete. It was only
about 80% into that project that he
was asked to subdivide the building into 28 smaller shop units
('phase 2'). The idea was to
create a so-called 'China mall'. This
work commenced in July 2013. The extra work included putting in shop
fronts (aluminium panels
with glass and doors), electricity points,
tiled floors, plumbing, suspended ceilings. He was asked to put
in separate electricity
boxes, and used brick for dividing walls, not
dry wall. However, the work came to a standstill when a building
inspector intervened
and put a stop to it due to the absence of
building plans.
[22]
Regarding the building plans, Dr Buytendorp
testified i t was never agreed
that
he would procure the building plans During cross-examination,
however, he conceded that most clients do not know
the difference
between a Site Development Plan and a building plan, unless they were
in the commercial sector; and that, in building
Without a plan, a
fine can be incurred.
[23]
According to Dr Buytendorp, after the building work came to a halt,
there was agreement between Mr Vadia and himself that an
architect
would be employed on Mr Vadia's behalf. Dr Buytendorp testified that,
on behalf of Mr Vadia, he then facilitated the
appointment of Mr
Nothnagel to procure the building plans. Mr Nothnagel was never a
subcontractor of Dr Buytendorp. A quote was
received on 6 July 2013.
It was agreed with the Defendant that Mr Nothnagel would be paid by
Dr Buytendorp. An amount of R 44 000
was received by Dr Buytendorp
from Mr Vadia and transferred to Mr Nothnagel.
[24]
After removal from site, the plaintiff sent a statement of account
for extras to the defendant. Credits were given to the defendant
for
work not completed, eg only half of electrical boxes were completed.
[25]
He conceded that he had laid bricks and started building without a
plan, but only because Messrs Vadia and Nothnagel were working
on
securing the plan. He was doing it for a friend (Mr Vadia), he said,
and therefore continued without a building plan. He said
that he had
expressly informed Mr Vadia that a building plan was needed, who said
that the plan was coming.
[26]
He testified that he would be willing to complete the building work
if the plan is obtained.
[27]
The prospective rental was never discussed with him.
Mr
Nothnagel
[28]
Mr Pierre Nothnagel has 28 years' experience in architecture as an
'argitekstegnoloog'. He testified that no plans are needed
for
renovations, provided there are no alterations to the structure of
the building. However, when the structure is altered, building
plans
are required. He also conceded that it is unlawful to commence with
building work without plans.
[29]
His first contact with the project was when he was contacted by Dr
Buytendorp. He had no relationship with the plaintiff prior
to July
2013. The mandate given to him was for the drafting of a site
development plan and thereafter building
_plans.
The mandate was from the owner, although he was initially approached
by Dr Buytendorp. He was paid for his services by the
plaintiff.
[30]
Mr Nothnagel's quotation of 6 July 2013 did not specify the name of
the owner, the reason being that the name of the owner
was unknown at
the time. This was not unusual.
[31]
Mr Nothnagel testified that it is the owner's responsibility to get
building plans approved. It is a long process for approval
of first,
the site development plan and then, the building plans. An occupation
certificate would be granted only at the end of
this process after a
final inspection by a building inspector. This, according to Mr
Nothnagel, was explained to Mr Vadia, especially
the difference
between a building site plan and a building plan. E-mails to this
effect are part of the trial bundle.
[32]
The site development plan was drafted in August 2013, submitted on 26
September 2013 (see copy of the application) but approved
only at the
end of 2014. The words "SITE DEVELOPMENT PLAN" are clearly
visible on the face of the document. One reason
for delay in approval
is that the file had been lost and then found again. There was also a
problem in respect of the lease agreement
for the parking area.
[33]
At some stage Dr Buytendorp withdrew from this process and Mr
Nothnagel then started dealing directly with Mr Vadia, from whom
he
received a power of attorney to act on his (Mr Vadia's) behalf with
the local authority.
[34]
Sometime later Mr Nothnagel's involvement came to an end. He
indicated to Mr Vadia that he would be willing to assist with
the
building plan, but was not contacted by him again.
[35]
It was put to Mr Nothnagel during cross-examination that he had had
only one meeting with the defendant. This was disputed
by the
witness, who said that he had had 3-4 meetings with the defendant,
although he could not be sure of the exact number.
DEFENDANT'S
WITNESSES
[36]
Two witnesses testified on behalf of the defendant: Mr Vadia and Mr
Devy.
Mr
Vadia
[37]
Mr Ahmed Vahdia was the defendant's only witness on the merits.
He testified that it had been agreed from the outset
that the
plaintiff would be responsible for subdividing the building into
smaller units; and also for procuring the building plans
for this
subdivis!on.
[38]
According to him, the initial plan was to revamp the building and to
put in 26 shops for R 1 million. (Later on during cross-examination
The idea to divide the property into smaller units emanated from Dr
Buytendorp, and that on this basis the Defendant proceeded
in good
faith.
[39]
The extra work consisted only of splitting up electricity points,
some paving, the addition of two shops (to bring it to 28),
and more
toilets. The insurance had paid out R350-400K only, and that he would
therefore never have paid R 1 million simply for
renovations and
repairs. He denied that the extra costs came from his instruction to
sub-divide the building into smaller shop
units, as claimed by the
plaintiff.
[40]
He claimed that Dr Buytendorp had indicated to him even before
building work had commenced that the plans had been procured.
He said
that the building plans were shown to him (Mr Vadia) and that he had
approved them. During cross examination, he backtracked
on this
after some more questions, saying that he wasn't sure anymore. Mr
Vadia testified that the ground plan was the plan originally
presented to him. (Bundle A p 11.) The plaintiff had arranged for the
building plans to be drafted. Thereafter, he represented
to Mr Vadia
that they had been approved. This was at the commencement of the
construction.
[41]
Plaintiff's counsel showed Mr Vadia the 'ground storey plan', which
the witness said is what Dr Buytendorp had shown him at
the outset in
May 2013. However, Mr Nothnagel's evidence testified that this plan
was in fact the site development plan which was
only drafted during
August 2013.
[42]
Mr Vadia testified that he thought that a building plan was the same
as a site development plan. However, Mr Nothnagel testified
that the
difference had been made clear to Mr Vadia in e-mails, which were put
before the court, as well as in person. This was
denied by Mr Vadia.
[43]
During cross-examination, Mr Vadia maintained that the plan on p 21
of the pre-trial bundle - the site development plan - was
the
building plan. He later conceded that the site development plan was
different from a building plan, but insisted that he realised
it only
at that moment in court. He did not know this before.
[44]
It was put to Mr Vadia that he knew that it is the owner's
responsibility to procure building plans as he was building a private
property at the same time. This was denied by Mr Vadia, as he had
employed an architect for that project.
[45]
In respect of the building plans following the termination of the
construction, Mr Vadia said that he had followed up in Dec/Jan
2014
to get an update, but that nothing happened. Eventually, it was he
(Mr Vaida) and Azam, his brother in law whom he had employed
as_ a
'runner', who finally got plans approved. The date of approval was 14
November 2014.
[46]
Under cross-examination, Mr Vadia could not explain why the building
plans were only asked for by the authorities in July,
while
construction had already started in May 2013. He testified that he
would never have contracted with the plaintiff had he
known that he
would need to procure the building plan himself. Mr Vadia denied
paying Mr Nothnagel, saying that the Plaintiff had
paid him.
[47]
Plaintiff's counsel asked Mr Vadia why he paid the plaintiff on 5
August, following the termination of the construction? Mr
Vadia said
that he thought that the plaintiff had matters under control, and
that he had been satisfied with progress. He could
not quite remember
why he also paid the plaintiff on 6 September, but he supposed that
Dr Buytendorp must have told him that things
were under control. He
wanted to get the job done. There probably was some communication
between them during this time.
[48]
Mr Vadia testified that the credits were not proportionate to what
remains incomplete.
[49]
He said that he would be prepared to pay the outstanding amount if
the construction was completed by the plaintiff.
[50]
Mr Vadia was expecting an income from 1 Sept 2013, which has not been
forthcoming. He conceded during cross-examination that
he has no
occupation certificate, which is a requirement for letting out the
shops.
Mr
Rory Devy
[51]
Mr Devy was called by the defendant as an expert witness to testify
about the defendant's loss of rental income. He has 10
years'
experience in the residential property sector, but only 2 years'
experience in the commercial sector, having let commercial
properties
in the retail and industrial sector in the East Rand. It was revealed
under cross-examination that he has no certification
from the EAB
certificate or any qualification in property valuation.
[52]
He indicated that he had advertised the shops for letting on a board,
even though they had not been completed. Eventually,
he took down the
board as the shops could not be rented out due to their
non-completion.
[53]
The units would be 16-25 sq metres each, which could be let out
between R 4000-4500 per month depending on size. He based this
on a
comparison with other similar properties, but it was disputed under
cross-examination that these were in fact comparable properties.
[54]
He indicated that he had had interest and offers, but when questioned
under cross-examination, he conceded that he had no written
offers to
lease, nor could he provide the names of prospective tenants.
[55]
The defendant had also intended calling Mr Lebogang Kganyado as an
expert witness to testify about the estimated cost to complete
the
building work, but he was not allowed to testify due to defendant's
non-compliance with Rule 36(9) of the Uniform Rules of
Court.
ASSESSMENT
OF
THE
EVIDENCE
[56]
To reconcile mutually destructive versions of the parties, the
approach adopted in
Stellenbosch Farmers Winery Group Ltd
and
Another v
Martel Et CIE
and Others
2003
(1) SA 11
(SCA)
has to be followed. The approach requires the
court to make a finding on the probabilities, having regard to the
credibility and
reliability of the parties' witnesses.
[57]
In that case Nienaber JA provided guidance in how to resolve such
disputes. Iquote in full from the headnote in the case, which
provides a useful summary of the approach:
'To
come to a conclusion on the disputes issues the 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 of the veracity of the witness. That in turn will depend
on a variety of subsidiary factors such as (i)
the witness' candour
and demeanour in the witness-box, (ii) his bias, latent or patent,
(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, and (vi) the calibre
and cogency of his
performance compared to that of other witnesses testifying about same
incident or events. As to (b), a witness'
reliability will depend,
apart from the factors mentioned under (a)(ii), (iv) and (v), on (i)
the opportunities he had to experience
and 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 par1Y's
version on each of the disputes 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 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."
[58]
First, the witnesses of the plaintiff are evaluated. Dr Buytendorp
was a good witness. He came across as confident, truthful
and honest
in his evidence. The same goes for Mr Nothnagel. Both performed well
under examination in chief and cross- examination,
and there
were no internal contradictions in their respective testimonies. Dr
Buytendorp and Mr Nothnagel corroborated each other's
testimonies,
but without sounding rehearsed. In other words, there is consistency
in the evidence they gave in court. Both conceded
certain points put
to them by the defendant's counsel, which is a positive factor to be
considered in respect of the credibility
of their respective
testimonies. Ifind their evidence credible and reliable.
[59]
Mr Vadia's testimony was not as convincing as that of the plaintiff's
witnesses. He appeared uncomfortable in answering some
questions,
particularly those posed during cross-examination. In many answers to
direct questions on other issues, he would repeat
his version that it
was not his responsibility to procure the building plans, but that of
Dr Buytendorp's.
[60]
Plaintiff's counsel argued during closing argument that because he
was building his own private property around the same time,
it makes
it improbable that Mr Vadia would not have known that it was his
responsibility as owner to procure building plans. It
was further
submitted that it is improbable that the Defendant would have paid R
1 million for 26 shops, and then later more than
half of that initial
amount - R567 400 - for only 2 more shops and some smaller
renovations. The plaintiff's version - that the
subdivision into the
smaller shops was part of the second phase - is more probable, he
said. Furthermore, in respect of the building
plans, if it was agreed
in May 2013 already that the plaintiff would obtain building plans,
why would it have waited until July
2013 to ask for a quote from Mr
Nothnagel?
[61]
Several payments were made by the defendant. In respect of the
payments of 5 August 2013 (R 100 000) and 6 September 2013 (R
150
000), the plaintiff contended that it is improbable that the
defendant would have made these payments if Dr Buytendorp had
lied to
him about procuring the building plans.
[62]
Mr Devy's testimony was of little assistance to the defendant. His
expertise is also questionable. I do not attach much weight
to his
evidence.
[63]
I find the testimonies of the plaintiff's witnesses to be more
credible and reliable than that of the defendant's. On balance,
the
plaintiff's version is also more probable.
THE
COUNTERCLAIMS
[64]
The defendant failed to lay a proper foundation for any of its
counterclaims. In light of my finding above, the defendant's
counterclaim for specific performance is dismissed, and so too is its
alternative damages claim for R 390 500. No evidence was
produced to
prove this claim.
[65]
In respect of the additional counterclaim for loss of future rental
income, the evidence produced was weak. In respect of the
quantum of
the claim, there was no real proof of the income that the defendant
would have derived from the letting of the premises.
It was purely
speculative. Counsel for the defendant provided no South African
authority on the issue of special damages for loss
of rental income,
referring only to a 1962 decision of the Ghana High Court.
CONCLUSION
[66]
My credibility, reliability and probabilities findings favour the
plaintiff. It has discharged its onus of proof, and is entitled
to
the relief it seeks.
ORDER
[67]
In the circumstances I make the following order:
1.
The plaintiff succeeds in its claim.
2.
The counterclaims of the defendant are dismissed.
3.
The defendant is ordered to pay the plaintiff the amount of R 232
000, plus interest on the aforementioned
sum at 15,5% per annum from
date of service of the summons to date of payment.
4.
The defendant is ordered to pay the costs of the plaintiff.
_________________________
OLIVIER,
AJ
ACTING
JUDGE OF THE HIGH COURT
Representation
for the Plaintiff
Counsel
Adv F J Erasmus
Instructed
by Van der Merwe Du Toil
Representation
for Defendant:
Adv
J Brenkman
Instructed
by: Fayaaz Moosa Attorneys