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[2015] ZAGPPHC 258
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Raft Crete CC v Netcom Construction CC and Another (3740/2009) [2015] ZAGPPHC 258 (8 May 2015)
IN
THE REPUBLIC OF SOUTH AFRICA
HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL
DIVISION, PRETORIA
CASE NO:
3740/2009
DATE: 8 MAY 2015
In the matter
between:
RAFT
CRETE
CC
.................................................................................................................................
Plaintiff
And
NETCOM
CONSTRUCTION
CC
...........................................................................................
First
Defendant
TSHIFHIWA
MATODZI
.....................................................................................................
Second
Defendant
JUDGMENT
N
V KHUMALO , J
:
INTRODUCTION
[1] The plaintiff
instituted an action against the 1
st
and 2
nd
Defendants for payment of an amount of R180 451,17 (“the
amount”) for the design and construction work it carried out
at
Erf 591, Eagle Canyon Golf Estate, Honeydew Manor, (“the
property”) a property owned by the 2
nd
Defendant.
[2] The 1
st
Defendant is a close corporation whose sole member one A W Nethengwe
(“Nethengwe") signed on its behalf a building contract
with the 2
nd
Defendant on 25 September 2007 for the
construction of a house at the property for an amount of R1 944
572.00.
[3] On 24 April 2008
Nethengwe signed a subcontractor agreement with the Plaintiff, a
close corporation (represented by its sole
member J G Ehlers) that
designs and constructs waffle rafts as its main business, in terms of
which the Plaintiff designed and
constructed the waffle raft
foundation at the property on June 2008.
[4] According to the
pleadings, it is common cause between the parties that on 18 June
2008 a telephone discussion took place between
the 2
nd
Defendant and an employee of the Plaintiff, Chantelle Maree
(“Chantelle”) regarding the payment of the amount of R180
451.17 that Plaintiff invoiced the 1
st
Defendant for the
construction of the waffle raft at the property. 2
nd
Defendant requested Chantelle to forward the invoice to him. The
amount was not settled.
[5] Plaintiff
thereafter issued summons against 1
st
and 2
nd
Defendants. 2
nd
Defendant is defending the action.
[6] In its summons
the Plaintiff alleges that:
[6.1] On 18 June
2008, during the telephone discussion with Chantelle, the 2
nd
Defendant undertook to pay the amount in the invoice before 31 July
2008.
[6.2] At the special
request of the 2
nd
Defendant, specifically after he made
the undertaking to pay, Chantelle sent the 2
nd
Defendant
the invoice of the outstanding amount.
[6.3] On 2 August
2008 during a telephonic discussion with Plaintiff’s J G
Ehlers, the 2
nd
Defendant undertook to pay the amount on
or before 30 August 2008.
[6.4]
Notwithstanding making the undertaking the 2
nd
Defendant
had failed to pay the amount.
[6.5] That the 1
st
and 2
nd
Defendants are jointly and severally liable to the
Plaintiff for the payment of the amount together with interest at the
rate of
15.5% payable from 30 June 2008 till date of final payment.
[7] In his Plea, 2
nd
Defendant denies any knowledge about the terms of the subcontract
that the Plaintiff concluded with the 1
st
Defendant and
any liability for the payment of the amount claimed by the Plaintiff.
He admits that Chantelle called him on 18 June
2008 and demanded
payment. He then requested a copy of the invoice from her so that he
can convey it to the 1
st
Defendant. He denies making an
undertaking.
[8] He pleaded
further that he has no contractual relationship with the Plaintiff
that can form the basis of the Plaintiff’s
claim but it is the
1
st
Defendant that is liable to pay the
Plaintiff on the basis of the signed subcontract between them. He
avers in the alternative that
he has discharged all his contractual
obligations between him and the 1
st
Defendant and has
therefore not been unjustifiably enriched. He alleges to have paid
whatever was due in terms of the building
contract to the 1
st
Defendant with whom he had a contract. He was also not a surety to
1
st
Defendant’s debts.
[9] The main
question that arises in this matter is whether or not 2
nd
Defendant made an undertaking to pay the amount owing to the
Plaintiff. Is there evidence of such an undertaking? If so, whether
such an undertaking had a legally binding effect such that a contract
came into existence with the Plaintiff deriving a right therefrom
to
claim performance, (as creditor) whilst creating a legal obligation
on 2
nd
Defendant to pay? In other words is (did) the 2
nd
Defendant (become) indebted to the Plaintiff?
THE LEGAL FRAMEWORK
[10]
The burden of proof is upon the party who alleges the existence of a
contract. He or she must establish facts that prove on
a balance of
probabilities that there was an intention that there be an agreement
that gives rise to legal relations, a contract;
CGee
Alsthom Equipments at Enterprises Eiectriques v GKN Sankey (Pty) Ltd
[1986] ZASCA 108
;
[1987]
3 All SA 619
(A),
1987 (1) SA 81
(A) 90. Where they may be a matter
of dispute, it is necessary to plead the offer and acceptance,
although it however may be incorrect
to argue that because there has
been an offer and acceptance there necessarily must be a contract. As
not all agreements have a
legally binding effect. There must be a
meeting of the minds (consensus) as a basis of a contract. Without
conscious consensus
between the parties there can be no contract.
[11]
The agreement between the parties must be about the legal
consequences or results they wish to create. In respect of the rights
and obligations that flows from the contracts. See
Dilokong
Chrome Mines (Edms) Beperk v Direkteur -Generaal, Depalowwrtement van
Handel & Nywerheid
[1992]
2 All SA 209
(A),
1992 (4) SA 1
(A). So there may be no contract for
one of three reasons: Either the parties did not intend to make a
contract, lacking
animus
contrahendi; see Aficar Solar (Pty) Ltd v Divwatt (Pty) Ltd
[2002] 3
All SA 369
(SCA)
2002 (4) SA 681
(SCA) para. 33
or
the law denies the status of contract to the agreement; or the
courts, with the best will in the world, have to treat as a nullity
what the parties thought was a contract when they made it.; see Van
der Merwe, Van Huyssteen, Reinecke and Lubbe’s
General
Principles of Contract
(“General
Principles’).
[12] According to
the Will’s theory in the General Principles, a contractant is
legally bound to his contract because, and
in so far as, there is an
actual meeting of the minds, in the sense of coinciding intentions,
between him and his co-contractant.
However the intention of the
contractants is, however, not the only factor which can serve as the
reason for binding parties in
terms of the agreement. Considerations
like legal certainty, good faith, protection of reasonable
expectations, and creation of
undue risks can also be accepted as
binding elements, even to the exclusion of the will. Prominent
amongst the theoretical alternatives
to consensuality are the
declaration theory and reliance theory. The declaration theory in its
widest form is said to seek to base
a contract on the presence of
coinciding declarations alone. The theories in the General Principles
p 22 are said not to be so
advanced in South African law of contract
as complete alternatives to the will theory. They are still linked to
the expression
of a will with the contractants that still have to
agree (consensus) on the consequence they wish to create and to which
they intend
be legally bound.
[13]
In construction the principal contractor is not legally bound to give
undertakings to their subcontractors on the debts of
the major
contractor. However once an undertaking has been given, it must be
honoured. The parties must still
intend
their
undertaking to be legally binding. However what is the status where
there is an undertaking to pay without an admission of
liability? If
a contractant does not intend to be legally bound by the agreement it
cannot be a contract since there is no consensus;
see Wilkins N O v
Voges
[1994] ZASCA 53
;
1994 (3) SA 130
(A). Therefore an expression of will, which is
made without the intention of becoming legally bound by its eventual
acceptance,
can accordingly not even qualify as an offer which may
lead to the creation of a contract; See CF Mondorp Eiendomsagentskap
(Edms)
Bpk v Kemp & De Beer
1979 (4) SA 74
(A); Aficar Solar
(Pty) Ltd v Divwatt (Pty) Ltd
2002 (4) SA 681
(SCA) 698B.
EVIDENCE ON
HISTORICAL FACTS
[14] According to
the minute of their pre-trial conference, the Plaintiff was to
commence to lead evidence. Chantelle, Ehlers and
Nethengwa led
evidence on behalf of Plaintiff whilst 2
nd
Defendant was
the sole witness of the 2
nd
Defendant.
[15]
According to Chantelle,
2
nd
Defendant telephoned the Plaintiffs
office
on 18 July 2008 and
identified
himself to her. He told her that 1
st
Defendant was no longer working with him,
so
he was going to pay the
subcontractor
directly
.
2
nd
Defendant requested a copy of the invoice. At the time she had
already issued the invoice in the name of the 1
st
Defendant on 18 June 2008. So she changed the details of the 1
st
Defendant on the invoice and substituted it with those of the 2
nd
Defendant, without changing the date when the document was created.
She thereafter telephoned Ehlers and told him about 2
nd
Defendant’s call and request. No payment was received. 2
nd
Defendant.did not say anything to her about sending the invoice to
1
st
Defendant otherwise she would not have changed the particulars to
those of the 2
nd
Defendant. She denied that she called the 2
nd
Defendant on 18 June 2008 or that the telephone discussion took place
as alleged in the particulars of claim. She persisted even
when it
was put to her that 2
nd
Defendant did not have Plaintiff’s particulars so why would he
phone its office. She was adamant that it was the 2
nd
Defendant who phoned their office not vice versa alleging that
she
never
phones
clients. She only does the invoicing and Ehlers will then phone the
clients. She alleged that only Ehlers phones the debtors.
[16]
Ehlers testified that according to the terms of the contract they
will invoice client within 7 days after completion of the
work. He
only got to know the 2
nd
Defendant after he completed the project and after he had issued the
invoice. He was at a site meeting with another client when
Chantelle
called and informed him that 2
nd
Defendant undertook to pay the money. 2
nd
Defendant asked Chantelle to change the invoice as he will be paying
the subcontractors directly. On 1 August 2008 he phoned the
2
nd
Defendant to follow up on the payment. 2
nd
Defendant told him that he paid the money to 1
st
Defendant. He phoned Nethengwe, who denied that a payment was made.
He, as a result after the conversation sent a letter by fax
to 2
nd
Defendant on 1 August 2008 asking for proof of payment. A meeting was
arranged on 5 August 2008 that was attended by 2
nd
Defendant, Nethengwe and himself. They,
inter
alia
,
discussed payment. 2
nd
Defendant said he will pay by the end of August 2008. At the end of
August he decided to pass the matter on to the attorneys who
then
sent a letter to 2
nd
Defendant in September 2008. The attorney’s attempt to arrange
a round table meeting with the 2
nd
Defendant failed as he did not attend. They also received a letter
from Nethengwe informing them that they were not paid for the
foundation.
[17]
Under cross examination Ehlers indicated that eithe
r
Chantelle or
he
would phone
the customer 5 to 7 days after sending the invoice.
T
he
invoice to 1
st
Defendant was sent on 18 June 2008. He could not remember what
Nethengwe said when they phoned him. During that time 2
nd
Defendant phoned them out of the blue and mentioned that he has
parted ways and kicked 1
st
Defendant out of the site, so
he
will be continuing with the work and paying subcontractors directly.
He
at the same time stated that 2
nd
Defendant
received a call from Chantelle on 18 June 2008 looking for
payment.
2
nd
Defendant told her to send the invoice, he will address it with 1
st
Defendant.
[18]
Ehlers pointed out that his attorney made a mistake in the
particulars of claim. He did not phone the 2
nd
Defendant on 2 August 2008 as stated therein but on 1 August 2008 and
2
nd
Defendant told him that he paid the money for the foundation to the
1
st
defendant so he
must
follow up with Nethengwe
for
payment
and
again gave an undertaking to pay by the end of August 2008
.
On 5 August 2008, 2
nd
Defendant told him that he will pay the money by the end of August
2008. He disagreed with the contents of Paragraph 11 and 13
of the
particulars of claim stating that the invoice was sent to 1
st
Defendant on 18 June 2008. They got a call from Defendant on 16 July
2008. On 01 August he went to the 1
st
Defendant, enquiring if he received payment, thereafter he telephoned
the 2nd Defendant who alleged that he paid 1
st
Defendant. He called Nethengwe who said he had still not received the
payment. On the same day he sent a letter to 2nd Defendant.
In the
letter he did not mention the conversation he had earlier with 2
nd
Defendant because he only spoke to him briefly and actually 2
nd
Defendant spoke to Chantelle not him. The acknowledgement that 2
nd
Defendant made to him as pleaded was not referred to in the letter
because he wrote what he thought he heard.
[19]
He further stated that according to him 2
nd
Defendant’s
guarantee
that
he will pay the money was good enough to him.
2
nd
Defendant undertook to pay him even though he said he had paid 1
st
Defendant.
He
also went back to 1
st
Defendant to try and get the money nonetheless. He said he did not
take a deposit because 1
st
Defendant told him he functioned on draw downs. They had an
arrangement that an engineer will certify the work and issue a
certificate
which will be handed to the bank to confirm that work is
completed by a qualified person for the bank to release the payment.
He
scheduled meetings with 1
st
and 2
nd
Defendant to get clarity on who had the money to pay and only 1
st
Defendant attended. They even went to look at the foundation and
2
nd
Defendant said he will sort all that out which he understood
to
mean that 2
nd
Defendant was going to do the payment. On 16 July 2008,
2
nd
Defendant specifically said he will do the payment.
At
the time he was not aware that 2
nd
Defendant had already paid 1
st
Defendant for the foundation. He alleged that 2
nd
Defendant was not frank with him because when he asked him to fax
proof of payment to he didn’t. He admitted that 2
nd
Defendant did not have a contract with the Plaintiff,
but
pointed out that 2
nd
Defendant had a
benefit
so he must pay for it.
[20]
Nethengwe, Plaintiff’s third witness, was subpoenaed by the
Plaintiff. He confirmed that the foundation formed part of
the main
quotation as trenches however anything other than that was not quoted
for in the contract. He pointed out that the contract
therefore did
not include a raft foundation. The price in the contract was only for
normal foundation. He stated that when he established
that a raft
will be required he subcontracted the Plaintiff. 2
nd
Defendant was going to be liable for the raft.
After
he had paid the Plaintiff, 2
nd
Defendant was going to pay him less the amount he loaned him.
According to him his
relationship with 2
nd
Defendant came to an end in 2008
without notification. He heard about it from people outside although
he is related to the 2
nd
Defendant. He through his
business then issued a summons against 2
nd
Defendant for
breach of contract claiming payment of an amount of R600 000. They
settled the action on the basis that 2
nd
Defendant said he
had already paid Plaintiff in February 2009 so he was going to pay
him only the balance of R241 000.00.
[21]
Under cross examination he stated that he was not served with the
summons. He heard about the matter two weeks ago when subpoenaed.
The
R160 000 paid to him by 2
nd
Defendant was not part of the contract but a loan to him, so no
deposit was paid in the agreement. They instead agreed that he
will
build a house for 2
nd
Defendant. He was supposed to start building in 2007 and complete by
2008. The loan was the brought into the contract. 2
nd
Defendant was not supposed to pay him direct but the bank was going
to pay after evaluating the house. 2
nd
Defendant was only going to be liable for the difference. After
2
nd
Defendant received an invoice from Plaintiff, he came to
him
with it and they put in a claim
.
Plaintiffs also could not have phoned him because they had an
agreement. After concluding the contract he went with Ehlers to
the
property to show him the land that was the last time he saw him. He
was on site before they finished. After that he never heard
from
them. The foundation was completed in 4 days. After the job was done
he spoke to 2
nd
Defendant about the raft and a meeting. 2
nd
Defendant did not attend the meeting, he dealt with Ehlers directly.
He started working on site preparing the land first in 2008.
He
had a contract with Plaintiff they were supposed to
notify him when they finished
but they did not contact him.
He
wrote to them but Ehlers never phoned him.
He
never had a site meeting with him. When he told 2
nd
Defendant he said he had an agreement to pay Plaintiff directly and
he believed 2
nd
Defendant as no letter was written to him. 2
nd
Defendant paid him R240 000 in terms of the settlement. The money was
over by R73 000.00 because 2
nd
Defendant needed his signature for the bank to pay the R1,5 million
and he gave it to him. 2
nd
Defendant phoned him to come and fetch R73 000 and told him to go and
drink beer. The money was for settlement of their own private
debts
using 1
st
Defendant. He was not paid the R642 000.00 because the work finished
was only less than 33 %.
[22] 2
nd
Defendant’s evidence was that he contracted 1
st
Defendant to build him a house on his vacant stand. Their deal was
that he was going to advance 1
st
Defendant a loan in the
amount of R160 000 which he did in December 2006 and he was going to
be repaid on the 1st draw down from
the building bond. He had a loan
from FNB for R4 million and R2,5 million was a building loan from
which there was to be a draw
down and progress payments made on
completion of 33% of the work. He was going to deduct the loan amount
and pay Nethengwe the
difference. Nethengwe delayed the construction
and started only in February/March 2008 instead of in 2007. He
subcontracted the
Plaintiff to do the foundation. He became aware
that the relationship between the two entities ended in July after
the construction
of raft foundation. He kind of expected 1
st
Defendant to continue building but there was no material on site.
Instead Nethengwe informed him of an additional amount of R73
000
required to top up the cost amount. He paid R73 000 to 1
st
Defendant on 9 June 2008 as shown in exhibit “A”, his
statement of account. There being prove that an amount of R160
000
was also paid to him. The invoice from Plaintiff to 1
st
Defendant was issued on 18 June 2008, the same day that Chantelle
called him wanting to forward him the invoice. He gave her his
phone
numbers and told her that he will forward the invoice to 1
st
Defendant. He then called 1
st
Defendant to his office to
finalise the progress payment. The progress payment was never done
because when the valuators came on
site to check on the state of the
construction they found that only 10 % of the 33% work agreed upon
was completed. The bank refused
to pay the draw down. On 16 July 2008
he spoke to Ehlers who wanted payment from him. Again on 1 August
2008 Ehlers called him
and told him that they were waiting for
payment. He told Ehlers that it was not his debt. On 5 August 2008
they had a site meeting.
Nethengwe was at the time banned from the
site. They discussed the invoice. He reiterated to Ehlers that the
invoice is not his
debt. Ehlers told him that he was going to issue
summons so he met with 1
st
Defendant at KFC Hillfox. He
proposed a settlement and Nethengwe agreed to it. They went to the
police station and both made statements
under oath confirming the
settlement. He thereafter made three payments to the 1
st
Defendant. Pages 27 paragraph 10 is not correct.
[23] 2
nd
Defendant’s evidence under cross examination was that the loan
of R160 000 he gave Nethengwe was tied up with the building
of the
house. Nethengwe was supposed to buy cement and bricks. That
agreement was oral and agreed upon before the building contract
was
signed. Nethengwe was going to repay him on his first draw down. The
building contract price would then have been reduced by
R160 000. The
loan amount from the bank was not intended for the raft but for the
building contract with 1
st
Defendant. 1
st
Defendant proposed to him that whilst they were on site that it be
used for payment for the raft. The need for the special foundation
was established after the excavations. At the time there was no
material on site. He averred that Nethengwe was supposed to issue
a
special quote for the raft and for any other additional or special
costs as an extra expense which he was obliged to pay separately.
The
building contract mentioned only R80 000 or R90 000 for a normal
foundation, that is why he had to top it up by R73 000 that
Nethengwe
told him to pay. Nethengwe told him he owed him only R73 000 for the
raft. If the cost was for him, 1
st
Defendant should not
have signed with Plaintiff. The amount for R160 000 was initially not
intended for foundation. He believed
Nethengwe when he told him that
is the amount of the top up as he is not a contractor. He paid the
R73 000 on 9 June 2008.
[24]
2
nd
Defendant went further and refuted Nethengwe’s allegations that
the R73 000 paid to him was a token of appreciation for signing
the
documents so that the bank can release the money. He reiterated that
Chantelle called him and told him about the invoice due
to be paid.
His assumption was that they would call Nethengwe. He then asked her
to forward the invoice to him. They had not signed
the progress
payment at the time and he needed to. He did
contact
Nethengwe t
o
speak about the invoice. At the time he was responsible for progress
payment to 1
st
Defendant. The decline from the bank for the draw down was received
verbally and it was conveyed the same day. The R73 000 top
up was
already paid. When Ehlers called him on 1 August he made it clear to
Ehlers that 1
st
Defendant owed the money not him. He then called for a meeting on
site that Ehlers agreed to. He received the letter from Ehlers
on 1
August 2008 after the conversation with him. He told Ehlers that
there was a potential dispute with 1
st
Defendant and he did not want to be involved. Ehlers told him the
invoice was sent to him as 1
st
Defendant had still not paid. They arranged to meet on site on 5
August 2008. He disputed the preparation of the invoice for one
party
and later substituting another for payment and did not undertake
anything to Ehlers. He thought they were clear that is why
on 4
September 2008 he did not say anything to his attorney. He also
indicated that it was to Ehlers from the stance he took in
the
meeting, letter plus his bank statement reflecting payment to
Nethengwe that there was no such undertaking. He settled with
1
st
Defendant for R240 000 that 1
st
defendant later received. The invoice he received on 18 June 2008 was
directed to 1
st
Defendant not to him. The one he later received on 16 July 2008 was
addressed to him. When Nethengwe came for the R73 000 top up
he
simply told him it is over and above the foundation costs on the
contract.
[25] There were a
few incongruences between the evidence of the Plaintiffs witnesses
and the pleaded facts in the particulars of
claim. Chantelle was
adamant that she spoke to the 2
nd
Defendant on 16 July not
on 18 June 2008 as stated in the particulars of claim. However
notwithstanding her being so resolute and
Ehlers partly corroborating
her in his evidence in chief even though he later changed, the
Plaintiff did not seek to amend its
particulars.
The evidence led by
the Plaintiff was therefore contrary to its particulars of claim.
[26]
Furthermore Ehlers alleged, in his evidence in chief that he called
2
nd
Defendant on 1 August to follow up on the payment and
2nd
Defendant told
him
that he paid 1
st
Defendant so he must phone 1
st
Defendant for payment
.
In the meanwhile the particulars of claim state that he had a
telephone discussion with 2nd Defendant on 2 August 2008, 2
nd
Defendant again made an undertaking in favour of the Plaintiff to pay
the money on 30 August 2008. When Ehlers was quizzed about
the
discrepancy on the two statements he was resolute that he actually
phoned the 2
nd
Defendant on the 1
st
of August not on the 2
nd
August 2008 as stated in the particulars of claim. Yet again the
particulars of claim were not amended. Ehlers continued to testify
on
what happened on 1 August 2008 contradicting the pleadings.
[27] There are other
inconsistencies and contradictions in the Plaintiffs evidence,
specifically on what was precisely said by 2
nd
Defendant
at the time and on who between Chantelle and 2
nd
Defendant
initiated the telephone call between Chantelle and the 2
nd
Defendant. In the particulars of claim Plaintiff only alluded to a
telephone undertaking made by 2
nd
Defendant to Chantelle
in favour of Plaintiff without indicating the initiator of the call.
Whilst the Admission made by 2
nd
Defendant in his plea
that Chantelle telephoned him on 18 June 2008 was not disputed nor
was a reply filed by the Plaintiff. Only
during the trial did
Chantelle then dispute that she made the call whilst Ehlers testified
in the contrary that it was 2
nd
Defendant who received a
call from Chantelle asking for payment. Ehlers also stated that 2
nd
Defendant called both of them out of the blue. With the inconsistency
left unexplained, the Plaintiff’s evidence on who made
the
initial telephone call cannot be relied upon.
[28]
In respect of what 2
nd
Defendant said, according to Chantelle, 2
nct
Defendant called her and informed her that 1
st
Defendant was no longer working with him,
so
he will be paving the subcontractor directly.
According
to Ehlers, what was reported to him by Chantelle on 16 July about 2
nd
Defendant’s call was that
2
nd
Defendant undertook to pay the money
and
asked Chantelle to change the invoice. Ehlers in the same vein
stated
that
2
nd
Defendant received a call from
Chantelle on 18 June 2008
looking
for
payment
and 2
nd
Defendant told Chantelle to send the invoice,
he
will
address it
with 1
st
Plaintiff.
It
is also his testimony that_2
nd
Defendant phoned them out of the blue. Consequently on this issue
regarding what precisely transpired during the telephone call
between
2
nd
Defendant and Chantelle, the evidence presented on behalf of
Plaintiff’ cannot be relied upon due to it being inconsistent
and contradictory. It therefore cannot be relied upon to decide
whether or not the 2
nd
Defendant made an undertaking.
[29] Once more on
the issue of what was said between the 2
nd
Defendant and
the Plaintiff, it was alleged in the summons that 2
nd
Defendant made an undertaking to Chantelle and Ehlers to pay the
amount in the invoice. Chantelle’s evidence was that 2
nd
Defendant told her that he was going to pay subcontractors directly,
whilst Ehlers on one hand confirmed that. On the other Ehlers
also
confirmed that 2
nd
Defendant asked for a copy of the
invoice so that he can address it with the 1
st
Defendant.
On 1 August 2008 he phoned the 2
nd
Defendant to follow up
on the payment. 2
nd
Defendant told him that he paid the
money to 1
st
Defendant. The word undertaking was not
mentioned in their evidence except in the summons. Ehlers went even
as far as also confirming
that he agrees that there was no contract
between Plaintiff and 2
nd
Defendant but as the latter
benefitted he must pay. He never claimed that 2
nd
Defendant bound himself to the Plaintiff or that a contract or an
agreement was concluded or that 2
nd
Defendant admitted
liability. Plaintiff has not succeeded to prove on a balance of
probability that an agreement was concluded
between 2
nd
Defendant and Plaintiff from which an obligation arose for 2
nd
Defendant to pay the amount claimed.
[30] Ehlers
attempted to explain away the discrepancy by alleging that 2
nd
Defendant on 1 August 2008 told them to follow up with 1
st
Defendant to whom 2
nd
Defendant had paid the money but
also undertook to pay by the end of August 2008. His explanation for
not mentioning in the letter
the undertaking that he alleged 2
nd
Defendant made to him shortly before he sent the letter that, it was
because he only spoke briefly to 2
nd
Defendant who
actually spoke to Chantelle, and also that he wrote what he thought
he heard and could remember, does not make sense
and is suggestive of
evidence that is likely to have been contrived. The Plaintiff has
based its claim upon such facts and therefore
it is expected that
they would play a prominent role in Plaintiffs evidence. Ehlers
evidence is therefore in that regard, unreliable.
[31] Finally on
Chantelle and Ehlers, when she substantiated her allegation that she
did not phone 2
nd
Defendant, Chantelle vowed that she
never phones clients, she only prepares invoices and only Ehlers
would phone the debtors. However
Ehlers’ testified that either
Chantelle or him would have phoned the customer, 5 to 7 days after
sending the invoice. He
was not sure if Chantelle phoned 1
st
Defendant. So the court cannot have confidence in Chantelle’s
evidence that she did not phone 2
nd
Defendant as Ehlers’
evidence on that fact is contradictory, a possibility that she phoned
2
nd
Defendant cannot be ruled out.
[32] I find both
Chantelle and Ehlers’s evidence unreliable due to the
contradictions and inconsistencies on the material
facts that
determine the key issues between the parties. So, both are not
credible witnesses.
[33]
Plaintiff’s other witness Nethengwe was in a serious
predicament having been brought to court under a subpoena. He
believed
to have received a raw deal from both parties. According to
him he never saw Ehlers after signing the subcontract and showing him
the property. As
he
had a contract with Plaintiff, he expected Ehlers to notify him when
they finished. He alleges to have written to Plaintiff but
Ehlers
never phoned him, whilst
2
nd
Defendant also ended their relationship without notification. He
however corroborates 2
nd
Defendant’s allegation that
2
nd
Defendant came through with
the
invoice and they both signed and put in a claim on 18 June 2008,
corroborated
by the Reouest for Progress Payment on Building loan that is
Exhibit
“A”.
His
evidence is also that he expected that after he paid the Plaintiff,
2
nd
Defendant was going to reimburse him less the R160 000 he loaned him.
So Nethengwe was to pay the Plaintiff which is understandable
because
he had a contract with the Plaintiff. It is therefore strange that
Plaintiff never contacted him. Nethengwe also agrees
that 2
nd
Defendant did pay him the difference of R73 000 although he says it
was paid to him so that he can sign the claim form on 18 June
2008.
So by the time the invoice was issued, 2
nd
Defendant had paid Nethengwe enough money to pay the Plaintiff. The
2
nd
Defendant had no reason to undertake to pay the Plaintiff. He was
within his right to advise Ehlers to contact Nethengwe. It is
therefore unlikely that 2
nd
Defendant would have voluntarily phoned the Plaintiff and undertook
to pay the debt.
[34] Nethengwe’s
evidence was not wholly credible, understandably, he is a bitter. He
was subpoenaed by the Plaintiff who
at the same time is suing his
company and did not bother to bring that fact to his attention or
that on the date of trial it will
seek default judgment against him
as well. The summons was purportedly served upon the 1
st
Defendant at the registered address on 10 February 2009. According to
the Plaintiff the matter was set down for trial but in closing
argument it purportedly requested a judgment against 1
st
Defendant as well, albeit by default, 5 years after summons were
purportedly served by fixing a copy to the principal door at the
registered address, without effecting service of the summons again or
the notice of application for default judgment on the 1
st
Defendant.
[35] In the High
Court Practice Manual of the Gauteng Division Pretoria, provision is
made for the Defendant to be made aware of
continuing proceedings
against him if default judgment is proceeded with six months after
the date of service of summons for a
notice of set down to be served
informing the Defendant that such default judgement will be sought on
a given date, which date
should not be less than 5 days. The
Application must be considered from that perspective.
[36]
The 2
nd
Defendant’s evidence was clear, sensible and logical. As it has
been indicated he admitted that he received a phone call
from
Chantelle asking about payment and he asked for the invoice so that
he can discuss it with 1
st
Defendant the person Plaintiff contracted with, who was never called
by anyone from the Plaintiff’s office demanding payment.
At the
time he confirmed as evidenced by the 1
st
Defendant as well that he had paid the 1
st
Defendant an amount of R233 000, so it would be expected of him to
assume 1
st
Defendant to be in a position to pay the Plaintiff. It would
therefore not make sense for him to make an undertaking to personally
pay the debt himself, without having spoken to the 1
st
Defendant. As he also indicated, by then 1
st
Defendant had not bought the cement or bricks that he was supposed to
have bought at the time. Ehlers also could not explain the
surrounding circumstances of the alleged second undertaking. In his
letter to 2
nd
Defendant written immediately after 2
nd
Defendant had allegedly made the second undertaking to him, Ehlers
referred to an undertaking in the letter but failed to mention
the
one made directly to him of which he had first-hand information. On a
balance of probabilities it could be because it never
happened. The
court therefore accepts 2
nd
Defendant’s evidence that he did not make any undertaking to
Ehlers. It would not make sense as well that 2
nd
Defendant would advise Ehlers that
they
must follow up with Nethengwe
for
payment for the foundation
and
at the same time give an undertaking to pay
by
the end of August 2008
.
CONCLUSION
[37] As it has been
indicated the onus is upon the Plaintiffs to establish credible
evidence that proves the existence of an undertaking
with a legally
binding effect. After consideration of all the evidence in the
context of all the circumstances I find that the
Plaintiff failed to
establish credible facts from which a determination can be made if an
undertaking was made, failing to discharge
the onus cast upon it, as
a result the other questions that relate to the legality thereof do
not even arise.
[38] As with the 1
st
Defendant, besides the challenges mentioned above regarding a summons
served 5 years ago, there was no formal written Application
filed for
default judgment as prescribed by Rule 31 (4) and (5) or service
thereof or of the summons again on the 1
st
Defendant. The
default judgment Application was made spontaneously made from the
bar. Therefore the judgment sought against the
1
st
Defendant cannot be considered.
[39] Under the
circumstances I make the following order:
[39.1] Plaintiff’s
claim against the 2
nd
Defendant is dismissed with costs;
[39.2] Application
for Default Judgment against the 1
st
Defendant is struck
off the roll, for failure to effect service of the summons or Notice
of the Request for default Judgment in
compliance with the High Court
Practice Manual.
N V KHUMALO
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
FOR THE PLAINTIFF: G
F HEYNS
INSTRUCTED BY: DAY
INC
Tel No: 012-362 3280
Ref: C Krone
FOR THE DEFENDANT: A
P DEN HARTOG
INSTRUCTED BY:
STRAUSS DALY INC
Tel No: 011 442 4250
Ref: