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[2015] ZAKZPHC 26
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Besserglik v Benions and Another (AR210/14) [2015] ZAKZPHC 26 (11 May 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE
NO: AR 210/14
In
the matter between:
MR
OBED
BESSERGLIK
................................................................................................
APPELLANT
and
MR BRIAN
BENIONS
............................................................................................
1
ST
RESPONDENT
BENCON
PROJECTS
............................................................................................
2
ND
RESPONDENT
JUDGMENT
Delivered
on : 11 MAY 2015
OLSEN
J (D PILLAY J concurring)
[1]
This is an appeal and cross appeal against a judgment of the
learned magistrate at Pinetown delivered on 31 January 2014.
The litigation commenced in February 2009 in the High Court at
Durban. There the appellant launched motion proceedings against
the first and second respondents claiming payment of two amounts; and
the rendition by the respondents of an account, with payment
of any
amount found to be due to the appellant upon debatement of that
account. The application was opposed and it was referred
to
oral evidence. The parties decided at that stage that the
matter ought to be removed to the magistrates court, which is
what
happened.
[2]
The magistrate listened to evidence and closing argument for some ten
days over a period of a year. He delivered a lengthy and
considered
judgment which bears testimony to his patience. For reasons
which will become apparent this judgment will be brief
by comparison.
[3]
There is some land in or near Richards Bay owned by the uMhlatuze
Municipality. It is divided into areas, some of which
are
referred to as “camps”. These camps are used for
the accommodation of visiting workers, principally, it seems,
from
the construction industry. This situation had obtained for some
time prior to the period with which this case is directly
concerned.
The municipality did not itself administer or run these camps for the
accommodation of workers. That was done
by private enterprise under
lease agreements concluded with the municipality.
[4]
The appellant, on the one hand, and the first and second respondents,
on the other, participated in these business enterprises.
They
did not do so in quite the same way. At all times material to
this case the appellant held a lease over an area
known as camp
B. The first and second respondents held a lease over an area
known as camp A which they managed for themselves.
The
appellant lived in Johannesburg and had therefore engaged the
services of the respondents (the first respondent apparently
being
the controlling interest in the second respondent, which is a close
corporation) since 2001 to manage the letting enterprise
at camp B.
[5]
By 2006 these camps were occupied through monthly tenancies, and the
municipality had decided not to renew the leases. The businesses
were
apparently profitable; and the appellant and the respondents wished
to continue their operations. In the result the
appellant was
mandated to negotiate with the municipality with a view to getting it
to change its mind about closing down the operations,
and concluding
lease agreements in respect of the camps. The appellant
discharged this mandate as a result of which written
leases were
concluded with the municipality. The commencement date under
each lease was 1 June 2007. During the course
of this process
the appellant secured for himself a lease not only over camp B but
also one over an area known as camp C.
Each of the leases (in
respect of camps A, B and C) was for an initial period of 5 years
with the tenant having an option to renew
the agreement for a further
5 years.
[6]
Prior to the conclusion of the leases with the municipality, and
during June 2006, the appellant and the respondents concluded
a
written agreement in terms of which the respondents would continue to
manage the appellant’s camp B under the then anticipated
new
lease agreements with the municipality. For the sake of
convenience I will refer to this agreement as “the management
agreement”.
[7]
The management agreement recorded how the funds generated by the
enterprise on camp B would be divided between the parties.
The
respondents guaranteed the accommodation of 10 workers at least on
the premises, and the remittance by the respondents to the
appellant
of an amount of R12 000,00 per month for these ten guaranteed
occupants of camp B. The funds generated by
the occupation of
camp B by workers in excess of 10 would be shared as to half to the
appellant and half to the respondents.
However clause 2.1.4
provided as follows.
“
All
risks and expenses, of whatsoever nature in relation to the camp
shall be paid by [the first respondent] and [the second respondent].
[8]
It was anticipated that the duration of the new leases in respect of
camps A and B would be the same, because clause 3.1
of the
management agreement provided that its duration would be the same as
the duration of those two leases.
[9]
The management agreement also contained a clause headed “Suspensive
Condition” to which I will revert shortly.
[10]
The appellant’s first claim is for payment of a sum of
R72 000,00 being the guaranteed minimum payment per month
due
under the management agreement for the period September 2008 to
February 2009 (the month during which the application was launched
in
the High Court). It was common cause between the parties that
the amount had not been paid. The respondents resisted
an order
for payment on a number bases which I will deal with separately.
[11]
The first of these has to do with the clause in the management
agreement headed “Suspensive Condition”. It reads
as
follows.
“
4
Suspensive Condition
4.1.
That the lease is renewed for a period of at least 10 years.
4.2.
That we are permitted to make the necessary improvements to your camp
in line with those which we envisage carrying out to
our camp.”
The
contents of sub-clause 4.2 are clearly not part of any condition,
despite their inclusion in paragraph 4 of the management agreement.
They form no part of the respondents’ argument.
[12]
The respondents argue that the lease agreement with the municipality
was not for a period of at least 10 years, with the result
that the
suspensive condition was not satisfied; and that the management
agreement was accordingly not binding. However in
his answering
affidavit the first respondent went on to admit that the parties had
nevertheless conducted their affairs in respect
of camp B in
accordance with the management agreement “bar what is stated
hereinafter”. What was stated thereinafter
was that there
was in operation a tacit agreement between the parties substantially
in accordance with the terms of the management
agreement, save that
it included a warranty that camp B would be habitable. The
significance of this difference lay in the
fact that the appellant
had discovered that whereas the respondents’ accounts delivered
to the appellant reflected that all
workers accommodated in camp B
were paying R28,00 per night for their accommodation, in fact at
least some of them were paying
R32,00 per night. (The appellant
had obtained certain invoices which had been delivered by the
respondents to the employers
of those workers which revealed this
fact.) The false accounts had to be explained and the
explanation tendered (which the
magistrate correctly rejected as
untenable) was that, without having told the appellant, the
respondents had deducted R4,00 per
person per night from the income
they received from workers in camp B in order to compensate them for
the cost of replacing certain
beds in the camp. From the
perspective of the respondents the enforceability of the written
management agreement had to be
challenged because under it all costs
and expenses were for the respondents’ account; thus the
contention that the suspensive
condition had failed.
[13]
The appellant’s version is that it struck him at some point
during his negotiations with the municipality that it would
be in the
interests of the lessees of these camps, including the respondents,
that the leases be for 5 years with an option to
renew for a further
5 years, in case it should turn out at the end of the initial period
that there were insufficient workers needing
accommodation to justify
the continuance of the businesses. He accordingly consulted
with the respondents and they agreed,
thereby amending the terms of
the suspensive condition. It is overwhelmingly probable that
the appellant’s version
is correct, and that is what the
magistrate found. I hasten to add, however, that the
magistrate’s decision was not
supported by a finding that the
appellant was a credible and reliable witness. The magistrate
made no such finding, and I
see nothing in the record which would
justify criticising the magistrate’s restraint in that
regard.
[14]
The magistrate reasoned along the lines that the business sense in
the appellant’s proposal of a renewable lease for
10 years in
all was not challenged; and pointed out that all of the tenants had
signed similar leases. I would add to that
the fact that the
management agreement actually contemplated that the leases for camps
A and B would be of the same duration, which
was also sensible and
business-like from the perspective of the respondents.
Furthermore the respondents had a motive to
deny the amendment of the
suspensive condition. They had to find an excuse for their
misconduct in having represented to
the appellant that they were
collecting R28,00 per person per night whereas the sum was R32,00 per
person per night. The
excuse that they had spent the difference
on beds in camp B could not have been tendered if they were bound by
all the terms of
the written management agreement which obliged them
to carry such costs themselves. (Of course the “excuse”
offered
does not explain why these deductions were hidden from the
appellant.) The magistrate cannot be faulted for his decision
that the suspensive condition was varied orally and then satisfied.
[15]
The second basis upon which the respondents resist the claim for
payment of R72 000,00 due under the management agreement
is
that, properly analysed, it is a sublease agreement forbidden by the
lease agreement in respect of camp B between the municipality
and the
appellant. This dispute took up a fair amount of time in the
case. The magistrate found that the management
agreement was
just that, and not a lease agreement. In my view that decision
cannot be faulted. A more direct answer
to the proposition that
a claim under it cannot be sustained because it was a sublease
forbidden by the terms of the agreement
between the municipality and
the appellant lies in the fact that in our law a tenant has no right
to challenge the title of the
landlord. (See
Frye’s
(Pty) Limited vs Ries
[1957] 3 All SA
473
(A) at 475.)
[16]
The respondents’ third broad line of resistance to the
appellant’s first claim (for payment of the sum of R72 000,00)
lies in
(a)
a claim of set off with regard to loans made to the appellant in an
amount of R84 500,00, and
(b)
the existence of certain counterclaims asserted by the respondents
which exceed all of the claims made by the appellant.
The
original papers in the High Court did not include a notice of a
counter- application. In his judgment the magistrate treated
these claims as counterclaims. There appears to have been no
objection to this in the magistrate’s court, and none
was made
in this court either.
[17]
Dealing first with the loans, it must be stated immediately that the
evidence concerning them was most unsatisfactory.
The principal
witnesses during the long course of this trial were the appellant and
the first respondent. The comment made
earlier about the
quality of the appellant’s evidence is the best that can be
said about the evidence of the first respondent.
Both of them
were witnesses who thought themselves free to say anything in order
to advance their respective principal causes;
which, it seems to me,
had rather more to do with a desire on the part of each to discredit
and vilify the other, than with the
advancement of their respective
cases. Unfortunately counsel representing the parties got
caught up in this, which was a
factor contributing to the
inordinately long duration of the trial. Dealing with the claim
for repayment of loans, the magistrate
concluded, after an attempt at
analysing the evidence, that he was unable to “say the conflict
of fact at present under consideration
can be resolved upon the
merits of the witnesses on one side [and] the demerits of the
witnesses on the other side.”
Counsel who represented the
respondents before us (who had not represented the respondents at any
earlier stage in the proceedings)
informed us that he also was unable
to unravel the mess and conflict of evidence dealing with these
loans. There is no reason
to be anything but sympathetic with
these views. Nevertheless, the magistrate decided that
R30 000,00 of the money lent
had not been repaid and granted
judgment for the respondents accordingly. In my view he erred
in that regard.
[18]
The question of the loans was first raised by the respondents in the
first respondent’s answering affidavit where he
claimed that
nothing had been repaid. He referred to a letter dated 7
October 2001 in which the appellant recorded that he
owed R24 756,69
being the balance of monies previously lent, and to an acknowledgment
of debt dated 6 March 2002 in which
the appellant acknowledged a loan
of R30 000,00. He said that a further amount of R29 743,31
was lent and advanced by
him to the appellant, without furnishing any
particulars of it.
[19]
In his evidence in chief the appellant acknowledged having borrowed
R50 000,00 (more or less) but asserted that the loans
dated from
2001/2 and pointed to documents evidencing the repayment of those
loans in part, and gave evidence as to an arrangement
that the
balance would be repaid by way of set-off against amounts due by the
respondents to the appellant arising out of their
management of camp
B which, it will be recalled, actually commenced in 2001. The
appellant pointed out, correctly, that there
was no evidence at all
of any demands having been made for repayment of money lent between
2002/3 and the date of delivery of the
answering affidavit. (The
appellant’s evidence was that set-off would have seen the loans
repaid in full during 2002
or 2003.)
[20]
On a cursory reading of his evidence under cross-examination it would
appear that the appellant contradicted himself by saying
that the sum
of monies lent in 2001/2 was about R80 000,00. However the
letter of 7 October 2001 which recorded a balance
owing of some
R24 756,69 illustrates that at that time some R25 000,00
had already been repaid. There was accordingly
no
contradiction.
[21]
Throughout the challenges made under cross-examination to the
appellant’s assertion that the monies lent in 2001/2 had
long
since been repaid in full by set off against monies due to him from
the business managed at camp B, the appellant protested
that no sane
business person in the position of the respondents would have let the
loan lie unpaid for all those years, during
which monies were being
paid on a regular basis by the respondents to the appellant arising
out of the respondents’ management
of the business conducted at
camp B. That point was well made and no answer to it was
offered by the first respondent when
he gave evidence. On the
contrary, the first respondent’s evidence on this subject was
most unsatisfactory. When
it was put to him that the money had
been repaid his typical answer was “please show me the proof of
payment”; or “can
we see that proof of payment,
please?”. As I understand the judgment of the magistrate,
he concluded that for absence
of proof of repayment, R30 000,00
of the amounts lent in 2001/2 should be held to be unpaid. In
my view it is probable
on the available evidence that the monies lent
during that period were in fact repaid, and that it happened long
before the events
which gave rise to the launch of the application in
2009.
[22]
That still leaves the sum of R29 743,31 which, according to the
first respondent’s answering affidavit, had been
lent; but with
respect to which no particularity at all was provided in the
affidavit. It is improbable that such a precise
amount would be
lent and advanced by one person to another without there being a
particular reason for the amount being calculated
to the last cent.
None was advanced by the respondents. But ultimately under
cross-examination the first respondent
said that two cash payments
totalling R30 000,00 had been made by him to the appellant, for
which no records had been kept.
He could not explain the false
allegation in his answering affidavit, but did explain why no records
had been kept : that was because,
he said, the monies had been given
to the appellant to be used to bribe corrupt officials in the
municipality. This had not
been put to the appellant when he
gave evidence. On the other hand once it was said it was not
pertinently challenged as
to its truth either. The magistrate
decided that it had not been proved that the money had been advanced;
but that if it
had been advanced he would not enforce its repayment
given the illegality of the transaction. In my view he was
correct.
His decision on this issue was not challenged in
argument.
[23]
The question of the appellant’s claim for an accounting aside,
which I will deal with last, the remaining issues in this
case
concern camp C. None of the parties had access to camp C in
advance of the leases which were concluded in 2007.
The
appellant secured the lease in respect of camp C for the same purpose
for which the other camps were let, but it appears from
the record
that the site was not then endowed with everything necessary in order
to use it for the accommodation of workers.
[24]
It is common cause that during the course of negotiations between the
appellant and the municipality for the new leases, the
appellant and
the first respondent discussed the proposition that the first
respondent should manage camp C for the appellant in
much the same
way as it was to manage camp B. The appellant made a proposal
that all income from camp C should be divided
between the parties as
to 70% for the appellant and 30% for the respondents, but it is
common cause that no agreement in that regard
was reached.
[25]
On 11 July 2007 the appellant and his son (who appears to have
assisted the appellant in business) left South Africa to visit
Israel. For some reason, despite the fact that the appellant’s
leases in respect of camps B and C were to run from
1 June 2007, the
agreements were not signed in advance of their departure. They
were in fact signed by the appellant on 25
September 2007 after he
had returned to the country on 23 September 2007. In the
meantime, and whilst the appellant was away
in Israel, the
respondents continued to manage camp B as they had done before.
However the respondents’ camp A and
camp B were filled to
overflowing, as a result of which the respondents decided that they
needed to lodge some workers in camp
C. This they did in the
absence of the appellant. They spent some money buying beds and
making some alterations to
the buildings (or certainly to one
building) in order to accommodate the workers. They earned
money by accommodating workers
at camp C.
[26]
The appellant’s evidence is to the effect that all of this was
done without his knowledge. The first respondent’s
evidence is to the effect that he contacted the appellant over the
telephone whilst the former was in Israel, and got permission
to
occupy camp C. The magistrate held on the evidence that there
was some communication between the appellant and the first
respondent
whilst the appellant was in Israel, and that camp C was raised; but
found that it had not been established that any
agreement was
concluded allowing the respondents to occupy camp C. I am not
sure that the record supports the magistrate’s
conclusion that
there was communication on the subject of camp C between the
appellant and the first respondent whilst the former
was in Israel.
But there appears to me to be no need to decide that question.
In my view the magistrate was correct
in his finding that no
agreement was concluded at that time for the occupation by the
respondents of camp C. In my view the
first respondent’s
evidence on this issue falls to be rejected. In his answering
affidavit the first respondent said
that he “approached”
the appellant during August 2007 requesting consent to utilise camp
C, and that he obtained it.
The words used in the affidavit
seem to me to indicate that, when he attested to it, the first
respondent had forgotten that during
August 2007 the appellant was
not in the country. His affidavit goes on to allege that it was
expressly agreed that the appellant
and the respondents would share
the proceeds generated in camp C equally and that the appellant would
pay the costs which would
be incurred in order to render camp C
habitable. His oral evidence on the subject was not to the same
effect. According
to his evidence before the magistrate he
asked the appellant (over the telephone) whether camp C was available
because he (the
first respondent) had more people to accommodate that
he could house. According to the respondents the appellant’s
response was that he had not yet concluded a lease with the
municipality but that it was going to happen so “just do what
you have to do”. According to the first respondent’s
oral evidence that was the basis upon which the respondents
took
occupation of camp C. The magistrate was clearly correct in
concluding that no agreement was concluded with respect
to camp C.
[27]
According to the appellant when he returned from Israel he eventually
discovered towards the end of October that the respondents
had used
camp C. When he challenged the first respondent the latter said
that he had to do that because the other camps were
full. The
appellant says that in the circumstances he told the first respondent
that he would have to pay the appellant for
the accommodation of
workers in camp C and that the response was that “we will find
a way to get about it”. The
appellant’s son (who
also gave evidence) says that he went to camp C to undertake building
work himself in November and found
that the first respondent’s
workers were not present on the site. (However it does appear
that third party workers
were still being accommodated on the site at
the instance of the first respondent until the end of December 2007.)
[28]
By this time whatever level of trust might have existed between the
first respondent and the appellant appears to have been
squandered.
The appellant decided to run camp C himself and he asked the first
respondent to furnish an account for what
had been going on in camp C
(and for the business conducted under the management agreement on
camp B). He received an account
and was not happy with it.
He asked for another and received it. It was available when a
meeting took place between
the parties in June 2008. At some
stage earlier than that the appellant had received copies of invoices
which had been rendered
by the respondents to Murray and Roberts for
the accommodation of their workers in camp B. These reflected
that Murray and
Roberts had been charged R32,00 per person per night
whereas the account reflected a charge of R28,00.
[29]
The account which was discussed at the meeting of June 2008 did not
only deal with the amounts received by the respondents
from the
employers of those accommodated in camp C. It also reflected
claims for expenses made by the first respondent against
the
appellant with the result that, after splitting the disclosed income
in respect of camp C (R140 490,00) between them,
the first
respondent’s account reflected a balance owing by the appellant
to the respondents of R72 609,00. The
expenses in question
turned out (in these proceedings) to be construction expenses and the
cost of beds installed in camp C.
[30]
The appellant did not accept that the account under consideration at
the meeting in June 2008 was accurate in any respect.
His
evidence is that he required the first respondent to produce another
one reflecting rates actually charged, and vouchers for
the expenses
claimed for camp C, whereafter the appellant would decide on what was
to be done. Before us counsel for the
appellant argued that a
proper conclusion regarding the meeting in June 2008 was that the
first respondent was to revert with a
full, better and proper
account, duly vouched, which might lead in due course to an agreement
between the parties as to how to
settle their dispute over what was
owing and not owing both in respect of camp B and camp C. No
agreement was struck beyond
that. The first respondent did not
revert with anything more by way of an account, and during the course
of the present litigation
continued to support the accuracy of the
account he had provided, and which was discussed in June 2008.
But it should be
observed that whilst at the trial the first
respondent produced invoices and the like in an attempt to vouch his
claims for expenses,
he refused to produce invoices to vouch the
income side of the equation, adopting the view throughout that he was
not in law obliged
to account to the appellant, and therefore not in
law obliged to produce those documents.
[31]
It is against that background that
(a) the appellant
claimed the money which the respondents had received in respect of
those accommodated in camp C; and
(b)
the respondents counter-claimed for reimbursement of the money they
had expended on improving the buildings on camp C, and buying
beds
for it.
The
magistrate granted the appellant judgment for R70 245,00 (being
half the amount collected in respect of camp C by the respondents).
After making a careful examination of the expense claims he found
that a sum of R77 175,86 had been established by the
respondents,
but only allowed R70 245,00, recording that the
balance could be considered when the respondents produced their
account in
accordance with the further order made by the magistrate
that the respondents should deliver an account to the appellant
reflecting
their dealings both with respect to camps B and C.
The magistrate did not state the basis upon which he was allowing the
appellant half the income earned at camp C by the respondents,
despite the fact that he had found (correctly) that there was no
contract in terms of which that income would be shared.
[32]
Anticipating that the magistrate may come to the conclusion that no
agreement had been established with regard to camp C, the
respondents
in the alternative said that they were entitled to their expenses
under an enrichment action. That is the basis
upon which the
magistrate granted the respondents judgment for their expenses.
The evidence on the quantification of these
expenses took up days of
the hearing.
[33]
In my view both parties overlooked fundamental flaws in the cases
advanced by them with respect to camp C.
[34]
The appellant’s claim against the respondents with regard to
camp C is that the respondents should pay to the appellant
all the
money they had earned from accommodating workers on camp C. It
is the appellant’s case that there was no contract
between him
and the respondents regarding the accommodation of those workers.
In the circumstances no contractual claim could
arise. On the
assumption that the appellant did establish that he had a right to
possession of camp C by the time he left
for Israel (and it is not
clear that he did), and that he was exercising that possession by
placing a security guard on camp C
(which is also not perfectly
clear), did the appellant suffer any loss by reason of the
respondents’ occupation of camp C
for that short period which
could be recovered under what in effect would be a delictual claim
for trespass? This issue was
not raised at trial. No
evidence was led as to any obstruction to the appellant’s
earning capacity or progress with
regard to camp C whilst he was
away. On the contrary, all the evidence supports the
proposition that camp C would lie unused
until the appellant
returned and commenced whatever was necessary in order to
render it habitable. The appellant did
not lose the income
which the respondents earned from camp C. No loss at all was
suffered. Counsel for the appellant
was asked repeatedly to
identify the appellant’s cause of action for payment of the
amount that the respondents were able
to earn during their brief
period of occupation of camp C, and was unable to answer the
question. In my view the magistrate
erred in granting judgment
in favour of the appellant on this claim.
[35]
Insofar as the respondents are concerned their claim with respect to
camp C falls into two categories. Firstly they claim
the cost
of beds. But beds are movable property. They do not
contend for a contract in terms of which those beds were
sold to the
appellant. Their only claim with regard to the beds would be
for the return of them. (In fact the appellant’s
evidence
was to the effect that the respondents did take the beds away; but
there is no need to deal with the question as to whether
that was
credible evidence.)
[36]
Insofar as the respondents’ claim for enrichment arising from
the improvement of the property is concerned, that lies
against the
owner of the property, not against the appellant as a mere tenant on
the property. Counsel for the respondents
accepted the
correctness of these propositions in argument.
[37]
Dealing finally with the question of an accounting, the respondents’
objection to the order granted by the magistrate
with respect to camp
B rests on the respondents’ contentions that the management
agreement was in reality a lease, or that
it was an ordinary business
transaction of some sort or the other which would not generate an
obligation to render and vouch an
account. The management
agreement was described earlier in this judgment. In my view it
must have been a tacit term
of the agreement that the respondents
would be obliged properly to account to the appellant, at least on
demand, for what they
were doing in the course of their management of
camp B. Any other conclusion would mean that the appellant
would be at the
mercy of the respondents, and obliged to accept
anything said by them to him as to the number of persons accommodated
in camp B
and as to the rates paid by the employers of those persons,
without any recourse. The respondents had discretionary power
with regard to the management of camp B. The exercise of that
discretion affected the legal and practical interests of the
appellant. Without the right to an accounting the appellant’s
financial interests were vulnerable to any wrongful exercise
of the
respondents’ discretionary powers; or any non-disclosure of
income earned in the exercise of those powers. In my view
these
circumstances gave rise to a fiduciary obligation on the part of the
respondents, which justifies the claim for a vouched
account of their
activities with respect to camp B. (See
Phillips
v Fieldstone Africa (Pty) Ltd and Another
2004 (3) SA 465
(SCA), para 34.) However, no case was made for
an account with respect to the respondents’ activities on camp
C.
[38]
In the circumstances both the appeal and the cross appeal succeed in
part.
[39]
Before dealing with the order to be granted in this matter, it is
necessary to say something about the procedure which was
followed.
Putting aside the issue as to whether it was possible to identify the
causes of action relating to camp C in the
affidavits delivered in
the original motion proceedings, those papers revealed a substantial
number of disputes of fact, and real
challenges to the credibility of
the deponents. The parties listed 13 issues to be referred to
oral evidence. The affidavits
had little worth as devices for
determining the issues : their value could only lie in their
usefulness as tools for cross-examination.
(See
Lekup
Prop Co No. 4 (Pty) Ltd v Wright
2012
(5) SA 246
(SCA), para 32.) The general rule, which ought to
have applied here, is that a referral to oral evidence should only be
employed
as the suitable method to arrive at the determination of a
dispute where the issues are clearly defined, relatively narrow in
compass
and capable of speedy resolution. (See
Standard
Bank of SA Limited v Neugarten and Others
1987 (3) SA 695
at 698-699.) Otherwise, where a dismissal of
the application is not warranted, the matter should be referred to
trial.
In a case where that course is warranted, the additional
costs which will be incurred in pleading the case are likely to be
insignificant
in the greater scheme of things. But the
advantages to the parties will often be substantial. Pleadings
focus the case
and the minds of the lawyers responsible for it.
Legal and other obstacles to success are more easily discerned in
pleadings
than they are in the fog of allegation and
counter-allegation so often present in a set of affidavits.
When the flow of evidence,
or preparation for its presentation,
reveals that a party needs to change tack, a ready set of rules and
precedents governing the
right to amend pleadings is available to be
employed in a just manner. This case would not have taken
anything like the time
it did in the court below, and would probably
have been confined as to the range of disputes to be resolved, if the
claims had
been properly pleaded. Those relating to camp C may
very well not have been prosecuted because the flaws in them would
have
been realised when attempting to plead them.
[40]
The only substantive orders made in the court below which survive
this appeal are the orders in favour of the appellant with
regard to
his first money claim and with regard to the account he sought.
The latter order must be amended by the deletion
of any reference to
camp C. We heard no argument to the effect that the order needs
to be amended in any other respect, as
a result of which it must be
left intact.
[41]
Insofar as costs are concerned the magistrate ordered the parties to
pay their own costs incurred in the motion proceedings
in the High
Court. He gave as his reason the fact that there were so many
disputes of fact apparent from the papers that
the proceedings were
futile. Whilst I have some sympathy for the magistrate’s
attempt to render an equitable order
with regard to costs, it would
not be proper to overlook the fact that when an application is
referred to oral evidence the premise
is that the motion proceedings
survive as the mode of determining the dispute. If the
appellant’s fault with respect
to the institution of motion
proceedings instead of an action was such as to justify him being
deprived of costs which he would
otherwise have been awarded as the
successful party, then that ought to have been reflected in the
dismissal of the application.
The costs incurred in the High Court
ought accordingly to be costs in the cause.
[42]
However through the fault of both parties something like half of the
time this case occupied in the magistrates court was taken
up with
the claims and counterclaims arising out of the respondents’
occupation of camp C. Both parties were unsuccessful.
It
would be unjust if, in relation to such costs, the appellant was to
enjoy the benefit of an order in his favour.
[43]
As some success was enjoyed in both the appeal and the cross-appeal
it is just that the parties should bear their own costs
in the appeal
proceedings before this court. An award of costs in each of the
appeal and cross-appeal would give rise to
a dispute over the
division of the expenses incurred in connection with these appeal
proceedings, which would be very difficult
indeed to determine on
taxation. Nevertheless, the costs of preparing the record (but
not perusing it) should be shared between
the parties.
The
following order is made.
1.
Each of the appeal and the
cross-appeal is upheld in part.
2.
The parties are to pay their own
costs in each of the appeal and the cross-appeal, save that the
respondents are to pay one half
of the costs incurred by the
appellant in producing (but not perusing) the appeal record, the
liability of the respondents being
joint and several.
3.
The orders of the magistrate made on
31 January 2014 are set aside and are substituted as follows.
“
(a)
The respondents are ordered to pay the applicant R72 000,00
together with interest thereon at the rate of 15.5% per annum
from 31
January 2014 to date of payment.
(b)
(i) The first and second respondents are ordered to
render a full
account of the business conducted between them and the applicant in
relation to camp B upon the immovable property
described as Portion
of Erf 5333, Richards Bay, KwaZulu-Natal for the period extending
from 1 June 2007 to 1 February 2009.
The accounting is to be
provided within 14 days from the date of this order and is to be
properly supported by invoices, a detailed
income statement and
supporting vouchers.
(ii)
The first and second respondents are to provide the applicant with
access to the books and accounts of the business in relation
to camp
B for purposes of an inspection upon 3 days notice by the applicant.
(iii)
The first and second respondents are to debate the accounts with the
applicant, and the applicant is granted leave to set
the matter down
for judgment for such sum as may be found to be due to him.
(c)
The counterclaims made by the respondents are dismissed.
(d)
The costs of the proceedings are to be paid by the respondents, save
for one half of the costs incurred by the applicant in
the hearing
and presentation of oral evidence and argument before this court.
The costs thus awarded shall include those
incurred in the High Court
and those incurred by the employment of counsel.
(e) The
liabilities of the respondents flowing from paragraphs (a) and (d) of
this order shall be joint and several.”
OLSEN
J
D
PILLAY J
Date
of Hearing: MONDAY, 04 MAY 2015
Date
of Judgment: : MONDAY, 11 MAY 2015
For
the Appellant : Mr H P Jeffreys SC
Instructed
by: Pretorius Attorneys Inc.
292
Boom Street
Pietermaritzburg
(Ref.:
Nadia Robberts)
(Tel.:
033 – 394 2392)
For
the Respondents: Mr R B G Choudree SC
and
Mr
E Tugh
Instructed
by: J H Nicolson Stiller & Geshen
2
nd
Floor, Clifton Place
19
Hurst Grove
Musgrave
(Ref.:
Mr A Marton/tn/2506)
(Tel.:
031 – 202 9751)
care
of :
STOWELL & CO.
295
Pietermaritz Street
Pietermaritzburg
(Ref.:
Gary Campbell)
(Tel.:
033 – 845 0500)