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[2014] ZAGPPHC 5
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Maryn N.O. and Another v Anton N.O. and Others (19761/12) [2014] ZAGPPHC 5 (4 February 2014)
IN
THE NORTH GAUTENG HIGH, PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
CASE
NUMBER: 19761/12
DATE:
04 FEBRUARY 2014
In
the matter between:
VAN
STADEN, PETRUS JACOBUS MARYN
N.O.
......................................................
FIRST
APPLICANT
KHAMISSA,
SUMAIYA ABDOOL GAFAAR
N.O.
....................................................
SECOND
APPLICANT
And
STRYDOM,
ANTON
N.O.
............................................................................................
FIRST
RESPONDENT
for
Gigworx (Pty) Ltd in Liquidation
STROH,
RINA ELAINE
N.O.
.................................................................................
SECOND
RESPONDENT
For
Gigworx (Pty) Ltd in Liquidation
WERKSMANS
INC
ATTORNEYS
...........................................................................
THIRD
RESPONDENT
JUDGMENT
TLHAPI
J
[1]In
this application the applicants, being joint-liquidators of
Freightsolve (Pty) Ltd seek a declaratory order in the following
terms against the joint-liquidators of Gigworx (Pty) Ltd:
Declaring
that the sum of R2 364 978.29 plus interest thereon earned from 23
April 2010 to date of payment, currently held in a
section 78(2) A
trust account in terms of the Attorneys Act 1979 by the third
respondent (“the funds) is payable to Freightsolve
(Pty) Ltd
(in Liquidation);
2.Directing
the third respondent to pay the funds to the applicants, in their
capacities as duly appointed liquidators of Freightsolve
(Pty) Ltd,
within 10 days from date of this order;
3.Ordering
the costs of this application to be costs in the liquidation of
Gigworx (Pty) Ltd Freightsolve (Pty) Ltd
(‘Freightsolve’)
under case number 2090/2010 and Gigworx (Pty) Ltd (‘Gigworx’)
under case number 14456/2010
were finally liquidated on 4 March 2010
and 12 March 2010 respectively. The liquidators in both these
companies claim ownership
to the funds in dispute. The third
respondent was cited only as an interested party because the funds in
dispute were deposited
into its trust account and no costs order is
sought against it. The application was opposed by the first and
second respondent.
[2]
On 12 November 2012 the above matter was referred to oral evidence on
the following issues:
1................
1.1
What the exact nature of the contractual relationsip between
Freightsolve (Pty) Ltd and Gigworx (Pty) Ltds was prior to their
respective liquidations;
1.2
If the relationship between Gigworx and Freightsolve is found to be
one of principal and agent; whether Mr Barend Petrus Barhuizen
has
waived any claim to the commission to which either he or Gigworx
would have been entitled to in respect of the transaction
with
Grainco (Pty) Ltd trading as BKB;
1.3
If Mr Barkhuizen has waived the right to commission; whether he was
lawfully entitled to do so.
1.4
Whether the Applicants in their capacities as such are entitled to
the orders in terms of prayers 1;2;3 of the Notice of Motion;
1.5
If not whether the 1st and 2nd Respondents in their capacities as
such are entitled to payment of the amount contained in prayer
1 of
the Notice of Motion”.
BACKGROUND
[3]
Mr Pieter Hendrik Vermeulen (‘Vermeulen'), was prior to
liquidation, the managing director of Freightsolve. He deposed
to the
founding affidavit on behalf of the Liquidators of Freightsolve. He
averred that Freightsolve was a freight and transport
broker which
rendered brokerage services to several of its clients. He entered
into an agency agreement with a Mr Barkhuizen (’Barkhuizen1),
who was the sole director and shareholder of Gigworx. The agreement
was that Barkhuizen would invoice Freightslove clients directly
through Gigworx and that upon receiving payment from the said
clients, Barhuizen would first deduct his commission agreed upon
from
time to time before forwarding payment to Frightsolve.
[4]
Brokerage services had been rendered through Barkuizen to a client,
Grainco (Pty) Ltd trading as BKB (‘BKB). BKB was invoiced
as
agreed to by Gigworx. Vermeulen averred that on 20 November 2009,
Barkhuizen provided him with a letter, annexure ‘F’
which
was intended for BKB and, in which he confirmed that Freighsolve was
in fact the principal and not Gigworx or Bakhuizen and,
furthermore
Barkhuizen gave Freightsolve the right to invoice BKB directly. The
letter reads:
7
Barkhuizen authorize you, the customer of Gigworx to payFrieightsolve
,, any amount due to me in the normal course of business.
I
further acknowledge that i enter into this agreement out of my own
free will in terms of an agreement with Freightsolve....
I
also state that I am fully authorised to enter into this agreement on
behalf of Gigworx. ’
Vermeulen
averred that Barkhuizen supported this application and annexed a
confirmatory affidavit signed by Barkhuizen. According
to Vermeulen,
Barkhuizen had waived his right to a commission because he had been
invoicing and arranging tariffs with Freightsolve
clients, which were
too low and which ultimately led to Freightsolve's insolvency and
liquidation. BKB refused to make payment
directly to Freightsolve and
instead made payment into the trust account of the third respondent.
[5]
Mr Strydom (‘Strydon’) was joint-Liquidator and he
deposed to the answering Affidavit. He raised the following points
in
limine:
1.
that the above court did not have jurisdiction to hear the matter
since the third respondent into whose account the funds were
deposited was domiciled in Cape Town, and that the place of business
of BKB was situated in the Western Cape Province; that the
applicants
had failed to make out a case why this court had jurisdiction to hear
the matter;
2.
that the applicant had failed to join BKB as a party to the
proceedings and that there was a mis-joinder in as far as the third
respondent was concerned;
3.
that the applicants had failed to obtain approval from the body of
creditors to launch these proceedings on behalf of Freightsolve
and
therefore the applicants did not have the authority to bring this
application;
4.
that the application was defective in that no allegation was made in
the founding affidavit that Vermeulen was authorized by
the
applicants to depose to the founding affidavit, and should such
authorization have been granted there was no affidavit from
the
applicants confirming their approval for the launch of the
application; in as far as the first and second respondents were
concerned they did not consent to Vermeulen deposing to the affidavit
on their behalf;
5.
that it was not possible that the deponents to the three confirmatory
affidavits, relied upon by Vermeulen, had sight of the
content of the
founding affidavit which was signed on 5 April 2012 long after the
confirmatory affidavits had been signed. Barkuizen
signed his
confirmatory affidavit on 7 February 2012, and the first and second
applicant signed theirs on 24 February 2012 and
13 March 2012
respectively.
6.
that disputes of fact arose regarding the relationship of principal
and agent as claimed between Freightsolve, Gigworx and BKB;
no
invoices or documents in support this relationship were annexed.
[6]
Strydom averred that Gigworx transported certain products for BKB and
other companies, HM Trust and HM Logistics Trust included.
Gigworx
did not have or provide the said transportation but had entered into
contracts with other entities to provide such transportation
on its
behalf.
Freightsolve,
Blue Disa and 4 Africa Infra Equipment were among the transportation
entities Gigworx contracted with and none of
these had a relationship
with BKB or with each other. At a certain stage Gigworx ended up
owing substantial amounts to some of
these entities, e.g. Blue Disa
issued summons against it in the above court for an amount of R 857
451. 40 under case number 7181/10.
This was followed by an urgent
application launched jointly by Blue Disa and 4Africa Infra Equipment
for the liquidation of Gigworx
on 10 March 2010 after it was
discovered that Barkhuizen was voluntarily sequestrated on 4 December
2009 and after he had allegedly
issued a letter on the 14 January
2010 giving authorization to HM Trust to take over the contracts
which Gigworx concluded with
HM Trust and to receive payment which
was due to Gigworx. The letter was annexed as annexure ‘F\ This
letter was similar
to one written on 20 November 2009 authorizing
Freightsolve to receive all payments from BKB due in respect of
contracts concluded
with Gigworx. Strydom averred that in a meeting
with Barkhuizen, Barkhuizen informed him that he signed the letters
under duress.
Attempts by Strydom to have Barkhuizen depose to an
affidavit were not successful because Barkhuizen refused to answer
calls from
the liquidators attorneys, in fact he disappeared.
[7]
Barkhuizen had also handed over a file containing invoices issued to
the various entities Gigowrx had contracted with and these
were
annexed. Those relating to BKB were annexed as annexure ‘J1-J46’
and amounted to R796 200.56 and load confirmation
documents annexed
as £k1 - k193, a few of which related to the invoices supplied.
According to Srydom there was no indication
in the documents in his
possession that Gigworx acted as agent for Freightsolve. A request
was made to the third respondent for
invoices from BKB and only a
summary of transactions was availed without supporting invoices. A
similar request was directed to
the applicant to supply invoices
which Freightsolve had sent to Gigworx and which related to the
summary of transactions supplied
by the third respondent on behalf of
BKB. The invoices supplied by the applicants, annexures T1 - T279 did
not support the information
on the summary in particular with regard
to the invoice numbers. A request for the relevant invoices was not
heeded. Strydom contended
that Freightsolve was a creditor of Gigworx
like all the other entities with whom Gigworx had contracted and that
they should lodge
a claim. However if the court found that there was
an agency agreement then the full proceeds still had to be paid to
the respondents
, that the commission be deducted and the balance be
paid over to Freighsolve.
POINTS
IN LIMINE
[8]
Even though the issues raised in the points in limine were not
referred to oral evidence, there was an understanding by both
counsel
that only points relating to the misjoinder and the different dates
on which the founding were signed would be argued.
I shall not deal
with these save to refer to them in as far as the issues raised were
relevant to the determination of the relationship
between
Freightsolve and Barkhuizen (Gigworx).
THE
CONTRACTUAL RELATIONSHIP BETWEEN FREIGHTSOLVE (PTY) LTD and GIGWORX
(Pty) LTD
[9]
While there was a confirmatory affidavit from Barkhuizen, given the
issues raised in limine around the different dates on which
the
founding and confirmatory affidavits were signed and, the explanation
given by the attorney for the applicant, the issue around
the above
relationship should also be determined from the three affidavits to
the application, the oral evidence and on what weight
I place on the
confirmatory affidavit of Barkhuizen. The Respondents did not call
any witnesses. Furthermore, I shall not deal
with all the queries
raised by the respondents in the financial documents annexed to the
papers.
[10]
Vermeulen testified that the agency agreement was oral and that
relationship with Barkhuizen turned sour after there was confirmation
from him that payment had been made to Freightsolve in the sum of
R2million. The R2 million was not payment due in respect of BKB
only,
because Barkhuizen had to give a remittance to reflect in respect of
which clients the monies were paid. Barkhuizen had confirmed
on three
occasions that the monies had been paid into Freighsolve’s
account, whereas this was not true. Barkhuizen never
paid any monies
over to Freighsolve. Vermeulen’s later investigation into the
transactions revealed a shortage of R 4 1/2
million.
[11]
The agreement with Barkhuizen entailed him offering a rate from the
customer to Freightsolve. The latter would take the offer
to its
subcontractor and if accepted the rate would be confirmed with
Barkhuizen and confirmation of rates was done in writing.
Freightsolve would then invoice Gigworx and Gigworks would on-
invoice the customer. He discovered that Barkhuizen would offer
a
higher rate to Freightsolve when in fact he gave a lower one to BKB.
He gave an example of BKB’s load confirmation of R550.00
on
page 310 and the invoice on page 602. He then decided to disclose
Freightsolve’s existence as the principal to BKB. He
denied
that Freightsolve was a subcontractor of Gigworx.
[12]
Vermeulen was asked to explain Gigworx tax invoices from the view
point of an auditor. His response was that the document did
not bear
the registration number of Gigworx nor describe the document as an
invoice or tax invoice. He did not have any knowledge
of BKB’s
load confirmations annexures K1-K193 and had never seen these
documents before the application was launched. Vermeulen
further
explained that annexure ‘L’, being the summary of
transactions availed by BKB was compiled after Freightsolve
had
directly invoiced BKB. These summary showed that an amount of R 2 364
978.29 was owing and this was the amount in dispute.
The
transport invoices in the summary were made up of Freightsolve
invoices although he was not in a position to explain in respect
of
which transactions they were, He was certain that where BKB was
involved they could only have related to Barkhuizen’s
involvement and that the invoices were in respect of grain or
manganese.
[13]
It was put to Vermeulen that since other entities were involved with
Gigworx the statements from Freightsolve to Gigworx did
not describe
in respect of which entities they were issued. The invoice numbers
described therein did not correspond with those
in annexure V which
Vermeulen testified were Freightsolve’s invoices.
His
response was that as an accounting person he knew how to do a
reconciliation afterwards and, to determine how to split the cash.
Although he had testified that no payments whatsoever had been
received from Barkhuizen, he was not aware that Freightsolve’s
statements did reflect some payments.
[14]
It was argued for the applicants that the issues raised in cross
examination with Vermeulen were not relevant to the determination
of
this relationship and, that what was important was Vermeulen and
Barkhuizen’s confirmation of the factual basis of the
relationship of agency. It was contended that the respondents were
not involved in the business of Gigworx, that they had failed
to call
witnesses and that the denial of the existence of an agency agreement
was based on hearsay, speculation and conjecture.
In my view there is
no merit in this argument because it disregards and over simplifies
the purpose for which liquidators are appointed
to administer an
insolvent estate. It was argued for the respondent that absent
confirmation from financial records it was not
possible to properly
characterize the relationship as one of agency
[15]
Whether they be for Freightsolve or Gigworks liquidators have an
obligation to execute their statutory duties in the interests
of the
creditors and the company. It is
the
creditors of the respective companies and the companies which stand
to be prejudiced if the money deposited in trust is incorrectly
allocated. After taking possession of all the assets including books
of account and supporting documents they have an obligation
to
examine the activities of the company before liquidation. Claims
against a company in liquidation have to be proved by way of
affidavit and supporting documents. In order to execute their duties
properly liquidators require some knowledge and skill in accounting
and auditing.
[16]
Annexed to the papers were financial records made available to the
respondents, being those referred to herein. The respondent
therefore
had to satisfy themselves from what was available before them. The
same exercise that they would be expected to engage
is in my view the
same exercise this court is expected to engage in its determination.
There is no explanation from the applicants
about what their findings
were in the examination of the books of Freightsolve regarding the
agency agreement or on the investigation
conducted by Vermeulen
before liquidation, except that they relied on Vermeulen to explain
such relationship and to explain the
content of the financial records
annexed to the papers. There has been a reluctance to release
relevant invoices by both Freightsolve
and BKB. The latter was not
joined as a party. Vermeulen is therefore obliged to satisfy the
court with concrete evidence gathered
mainly from the books of
account of the agency relationship. Barkhuizen’s letter and
confirmatory affidavit do not refer
to an agency relationship and
these documents alone are not helpful in explaining what exactly the
relationship Freightsolve and
Gigworx or Barkhuizen was.
[17]
The question to be asked is whether from the financial records
annexed to the papers the court can find what was testified
to by
Vermeulen as confirmation that an
an
agency relationship existed:
1.
the written confirmation of the acceptance of the rate offered by BKB
and communicated by Barkhuizen to Freightsolve; (the emails
referred
to by Vermeulen were not made available, for example there is no
confirmation regarding the accepted rate with regard
to the figures
on pages 310 and 602);
2.
information from Freightsolve which was used to compile the invoices
sent to BKB after the Barkhuizen letter; (the supporing
and source
documents were not made available);
3.
is there a connection between invoices issued by Freightsolve to
Gigworx, the on-invoice by Gigworx to BKB (invoices not presented)
and the transport invoices in summary annexure ‘L’ issued
by BKB; (the invoices from which the summary was compiled
were not
made available);
4.
the connection between the invoices annexures ‘J’ and
load confirmations annexures ‘K’ and the rest of
the
records;
[18]
Vermeulen could not explain in cross examination why the invoice
numbers supplied by Freightsolve to BKB differed from those
provided
by BKB in annexure ‘L\ He could not explain whether the detail
in annexure ‘L’ related to business which
BKB had with
Gigworks as reflected in documents handed over by Barkhuizen to the
respondents, except to say that the invoice numbers
fell within the
same series of numbers emanating from Freightsolve’s records.
No documentation to support this explanation
was availed by him.
[19]
His evidence on how Freightsolve was prejudiced by the lower rates
offered to BKB and the higher rate as accepted by BKB as
reflected on
pages 310 and 602 is but one example not supported by any information
from BKB, understandably so because BKB was
only invoiced after the
Barkhuizen’s letter and there were no source documents annexed.
[20]
He had difficulty explaining how commission to Barkhuizen was paid
out or calculated. It could have ranged between 5% and 10%.
Barkhuizen would first deduct his commission and then pay what was
due from BKB, on the other hand Barkhuizen had to make payment
first
and his interest would be calculated on a determination whether the
transaction was profitable and lastly Barkhuizen did
not qualify for
commission because he had breached the agreement. Annexure L’
refers to a determination fee and it is not
clear for what reason it
was charged and whether it related to commission or to any
information obtained from Freighsolve.
[21]
When Vermeulen was asked to clarify annexures ‘J’ he
responded that they could not be described as proper Tax Invoices
because they lacked certain features as required by legislation
(Section
20 (4) Act 89
of 1991 as amended) that is Gigworx
registration number and the description of the documents as a tax
invoice. My understanding
of a tax invoice is that it is issued by a
vendor to a customer and that the lack of the required features would
prejudice the
customer when claiming a VAT refund, where the Receiver
declined to accept it as a full Tax Invoice. There are also
exceptions
available where the invoice would be accepted. The
document bears the tax details of the vendor and the customer and
details though
incomplete of where the businesses are situated, it
also describes the transactions involved. In Barkhuizen’s
letter he refers
to BKB as a customer and that payment due to him
from BKB be paid to Freightsolve. For the purposes of this enquiry it
could have
been important to show that annexure ‘J’ was
in fact an on-invoice originating from Gigworx which had connection
to
an invoice issued by Freightsolve to Gigworx thereby confirming
Vermeulen’s testimony.
[22]
It was argued for the applicants that questions posed in cross-
examination regarding records that reflected that some payments
were
made to Freightsolve during the period of their relationship were not
relevant to the determination of the above issue, I
disagree.
Freighsolve generated an annual turnover of between R 80 - R 100
million rand. One would expect Vermeulen, a non-practising
auditor to
have kept proper books of account, including bank statements in which
could have been reflected that no payments were
made by Gigowrks to
Freightsolve and alternatively, if payment was made in respect of
which entities and transactions it was made
and how the amounts were
to be allocated to the respective entities. This information was
available to Vermeulen before the matter
was referred to oral
evidence.
Having
conducted an extensive investigation before liquidation into his
business with Gigworx another opportunity was given to examine
the
books. It is not acceptable that he refers it back to the applicants
when they relied on him to give an explanation. He was
the only
person in charge of financial matters of Freightsolve who could give
a better explanation to the court of what exactly
the business with
Gigworx entailed.
Furthermore,
the content of the letter from the third respondent which recorded
the reasons why the monies in dispute were deposited
into their trust
account, does not suggest that BKB was in agreement that there was an
agency agreement and that the monies were
due to Freightsolve. The
only conclusion I can arrive at is that the financial statements and
Barkhuizen’s letter do not
reflect any agency relationship. I
am of the view that the application must fail because I am not
satisfied that Vermeulen has
shown that an agency agreement between
Freightsolve and Gigworx (Barkhuizen) was in existence.
[23]
In the result the following order is made:
1.The
application is dismissed,
2.The
third respondent is ordered to pay all monies paid to it by BKB and
held in Trust to be paid over to the respondents being
duly appointed
liquidators of Gigworx (Pty) Ltd in liquidation within 10 days of
this order;
3.Freightsolve
(Pty) Ltd In Liquidation to bear the costs of this application
Tlhapi
V.V
(JUDGE
OF THE HIGH COURT)
MATTER
HEARD ON 20 MAY 2013
JUDGMENT
RESERVED ON 22 MAY 2013
ATTORNEYS
FOR THE APPLICANT BEUKES & SONJA NEL PROK
c/o
MACINTOSH CROSS &
FARQUHARSON
ATTORNEYS
FOR THE RESPONDENT : ARTHUR CHANNON PROK.