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[2014] ZAGPPHC 10
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Van Staden N.O. and Another v Strydom N.O. and Others (19761/12) [2014] ZAGPPHC 10 (4 February 2014)
IN
THE NORTH GAUTENG HIGH, PRETORIA
(REPUBLIC
OF SOUTH AFRICA)
CASE
NUMBER: 19761/12
DATE:
4 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:
“
1. 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 1
st
and 2
nd
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 (’Barkhuizen
1
),
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:
“
I
Barkhuizen.......
authorize you, the customer of Gigworx...... to pay
Frieightsolve ...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
‘
L’
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 agr
eement 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.