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[2012] ZAGPPHC 144
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Standard Bank of South Africa Ltd v Korea One Africa Construction CC (29043/07) [2012] ZAGPPHC 144 (1 August 2012)
NOT
REPORTABLE
IN
THE NORTH GAUTENG HIGH COURT,
PRETORIA
IES (REPUBLIC OF SOUTH AFRICA)
CASE
NO: 29043/07
DATE:01/08/2012
IN
THE MATTER BETWEEN
THE
STANDARD BANK OF SOUTH AFRICA
LIMITED
…...............................
PLAINTIFF
AND
KOREA
ONE AFRICA CONSTRUCTION
CC
.....................................................
DEFENDANT
JUDGMENT
PRINSLOO,
J
Introduction
and brief synopsis
[1]
In February 2006, the defendant entered into a building contract with
the Joana Daf Trust ("the borrower") in terms
of which the
defendant would sell a property known as Erf 265 Sandown Extension 24
to the borrower for some Rl,2 million and also
erect a luxury
dwelling on the property for the borrower. The total package came to
some R3,2 million.
[2]
The plaintiff granted a home building loan to the borrower for the
full amount of R3,2 million in order to finance the transaction.
The
defendant was duly paid the amount of some Rl,2 million for the
property.
[3]
In respect of the balance of some R2 million, representing the
building costs, the borrower would from time to time submit a
Progress Payment Request (MPPRM) to the plaintiffs department
administering these matters in order to finance the building
operations
as they progressed. The PPR department of the plaintiff
would then send valuators to the site to determine the value of the
work
done whereupon an amount decided upon by the PPR department
would be advanced to the borrower in order to finance the ongoing
operations.
[4]
On 6 November 2006 such a PPR for an amount of Rl,5 million was
submitted to the plaintiff for such an advance payment. The
PPR was
signed by one Kil Jung Kim ("Kim") the member and driving
force of the defendant close corporation. He is a man
of Korean
extraction and during the trial I was told that he is not fluent in
English or Afrikaans, neither does he fully understand
these
languages.
[5]
Because of this language barrier, the defendant, which was at all
relevant times engaged in extensive building operations, made
use of
the services of an adviser,
Renier
Gous ("Gous"), who assisted the defendant in its dealings
with clients, banks and the like.
[6]
Also amongst the dramatis personae, was one Martie Venter ("Martie")
who was a so-called "mobile consultant"
in the employ of
the plaintiff at the relevant time. As her job description suggests,
she was not office bound but moved around
recruiting business and
advising potential borrowers on various issues. In the course of her
activities Martie could make use of
the office facilities of the
plaintiff.
[7]
The PPR of 6November 2006 (this is exhibit "CI", and will
be referred to as "CI") was signed by Kim at the
instance
of Gous who telefaxed it to Martie for submission to the PPR
department of the plaintiff. At that stage the defendant
was one of
Martie's "clients". It is common cause that Martie would
act as an intermediary on this basis but she had
no authority to, for
example, approve advance payments in response to a PPR received by
the bank. She would simply pass on the
PPR to the bank's relevant
department and/or the valuators.
[8]
The PPR had to be signed by the authorised signatory as recorded in
the bank's records. In this case Kim was not an authorised
signatory.
The authorised signatory was Joana Da Fonseca ("Joana"),
one of the trustees of the borrower, and the daughter
of one Jorge Da
Fonseca ("Fonseca"), who also counts amongst the dramatis
personae in this case.
[9]
Through an oversight, the fact that Kim was not an authorised
signatory was overlooked by the bank, and an assessor was duly
dispatched to the site. The assessor determined the value of the work
done up to that stage to amount to Rl 316 750,00.
[10]
On the strength of the assessor's report, the plaintiff duly credited
the defendant's bank account with the amount of Rl 316
750,00 on 27
November 2006. The borrower's account with the plaintiff would have
been debited correspondingly.
[11]
The borrower knew nothing about these developments and the payment
that had been made.
[12]
When Fonseca found out about the unauthorised payment, he was highly
upset and threatened criminal proceedings against Kim
and Gous on the
grounds of the alleged fraud that had been perpetrated on the
plaintiff.
[13]
On 8 December 2006 the defendant repaid an amount of R316 750,00
which was duly credited to the borrower's account. This left
an
outstanding balance of Rl million in respect of the unauthorised
payment.
[14]
This balance was demanded from the plaintiff bank and meetings took
place, in April 2007, between the plaintiffs officials
and the
borrower's attorney and
Fonseca
on the one hand and, later, between the bank's officials and Kim and
Gous on the other hand. An interpreter, one James Kim,
also attended
the last-mentioned meeting, and so did Martie.
[15]
According to the plaintiffs officials, Kim undertook, at this
last-mentioned meeting of 24 April 2007, to repay the amount
of Rl
million to the bank. The defendant denies that this undertaking was
given. The payment was never made.
[16]
In the particulars of claim, the plaintiff relies on the alleged
misrepresentations (Kim allegedly misrepresenting to the plaintiff,
when submitting "CI", that he was authorised to do so) and
also on the alleged undertaking by Kim at the meeting of 24
April
2007 and claims payment of the outstanding balance of Rl million plus
interest.
[17]
In its plea, the defendant alleges that, on 29 November 2006, it
obtained a written authority from Joana, in the form of a
PPR to the
bank for payment of an amount of Rl million and, with the refund of
R316 750,00 that was made in December 2006, there
is no money
outstanding and payable to the plaintiff because the authorised PPR
of Rl million would serve to extinguish the alleged
outstanding
balance.
[18]
It is common cause that Joana signed a PPR for Rl million on 29
November 2006. This document is part of the record, as exhibit
"C60"
and will be referred to as "C60". "C60" is a
contentious document which received a great deal
of attention during
the trial.
[19]
Neither party called either Fonseca or Joana to give evidence.
[20]
The defendant also offered a special plea relating to an allegation
that the plaintiffs attorneys were not properly authorised
to act on
its behalf. This special plea, perhaps not surprisingly, was not
proceeded with.
[21]
Kim did not give evidence. I was told during the trial that the
parties are in agreement that a competent and suitable Korean
interpreter was not available to assist the court and to facilitate
Kim's evidence.
[22]
When it turned out that the defendant was not going to refund the
amount of Rl million, the plaintiff, because it acted on
the
unauthorised "CI", paid the borrower the amount of Rl
million plus interest on 25 May 2007.
[23]
In July 2007, the plaintiff instituted this action which came before
me and, at the same time, instructed the borrower's attorney
to
launch liquidation proceedings against the defendant, on the basis of
the alleged outstanding debt which was not being paid.
In September
2007, this court granted a final liquidation order against the
defendant, but the latter applied for a rescission
of that order,
which was granted, and, subsequently, the liquidation application was
dismissed.
[24]
As a result of the abortive liquidation proceedings instituted by the
plaintiff, the defendant also instituted a counter-claim
for payment
of some Rl 6,8 million. This is in respect of alleged loss of profits
because the defendant could not complete a property
development as a
result of the liquidation neither could it, allegedly, meet its
income tax obligations and had to pay penalties.
There was also a
component of interest which the defendant allegedly had to pay
because it had to borrow monies to meet its overheads
during the
period when it was in liquidation.
[25]
At the commencement of the proceedings, the parties jointly applied
for an order, in terms of rule 33(4), separating the quantum
of the
alleged counter-claim for later adjudication. The order was duly
granted.
[26]
So much for the introduction. I now briefly turn to the evidence that
was offered by the parties.
The
evidence
[27]
Athena Pavlakis ("Pavlakis") was employed, at the relevant
time, as a legal adviser of the Vehicle and Assets Finance
and the
Home Loans Division of the plaintiff. She left the plaintiff in
December 2007.
[28]
On 12 April 2007 she received an e-mail from her colleague, Shuvek
Maniram ("Maniram") from the Operational Risk
Management
section of the Home Loans Division. The message dealt with the
dispute which had developed between the defendant, Fonseca
and the
plaintiff about the unauthorised payment. There was also reference to
the "criminal statement" which Fonseca
had deposed to with
the view to instituting criminal prosecution. Efforts to solve the
dispute got underway.
[29]
On 18 April 2007 a meeting took place between Pavlakis and Maniram on
behalf of the plaintiff and Fonseca and his attorney
on behalf of the
borrower ("the 18 April meeting").
[30]
It was made clear on behalf of the borrower, firstly, that the
workmanship offered by the defendant in respect of the building
of
the residence was unacceptable so that the defendant was not entitled
to any payment and, secondly, that "CI" was
an unauthorised
PPR so that the payment made by the plaintiff was also unauthorised.
[31]
Pavlakis kept a minute, by way of contemporaneous handwritten notes,
of what transpired at the 18 April meeting. This is exhibit
"C32"
and the typed transcript is "C32A". The following is a
brief summary of what is contained in the minute:
the borrower was
not happy with the workmanship and Kim was not entitled to money.
The borrower thought that Gous had influenced
the assessor to find
enough equity for the progress payment. Fonseca and his attorney
wanted Kim to rectify the defects in the
property and they wanted the
plaintiff to get the money back from Kim and to refund the borrower.
"CI" was not authorised,
and the bank paid without a
mandate. The borrower would continue to service the bond, but the
plaintiff had to revert to the borrower's
attorney by the following
Monday.
[32]
This development inspired Pavlakis and Maniram to set up a meeting
with the defendant. This meeting took place on 24 April
2007 at the
plaintiffs Simmonds Street office in Johannesburg ("the 24 April
meeting"). It was attended by Pavlakis and
Maniram for the
plaintiff and Gous, Kim, James Kim (interpreter) and Martie.
[33]
Pavlakis knew about the amount of Rl 316 750,00 which had been paid
on the strength of "C1", and the refund of R316
750,00
which had been made. She knew that the object of the exercise was to
recover the balance of Rl million.
[34]
At the 24 April meeting Gous admitted that he had advised Kim to sign
"CI" in error.
For
the first time, it was revealed to the plaintiff that there was
another authority for Rl million ("C60") which had
been
signed by the borrower. This was the first time the plaintiff heard
about "C60" and Pavlakis and Maniram asked for
the document
to be produced. It was not to be seen. They asked for it to be
produced later. Gous said it would be furnished.
Some
discussion ensued and Kim agreed to repay the bank the Rl million and
the plaintiff would be advised by close of business on
that day when
the payment would be made. They told Gous and Kim that they were not
prepared to wait longer than 4 May, which was
the following Friday,
for the payment.
[35]
Another point that was discussed was that the defendant would meet
with Fonseca to discuss when the building operation would
be
completed.
[36]
Martie was present. At that stage Pavlakis and Maniram did not know
who she was. Upon enquiry, they established that she was
a mobile
consultant working for the plaintiff. She attended the meeting
throughout from the beginning but did not participate in
the
discussions.
[37]
Importantly, as was the case with the 18 April meeting, Pavlakis also
kept a minute of what was said at the 24 April meeting.
This is
exhibit "C33" and the typed transcript is "C33A".
"C33A" records the names of those present
and the fact that
Kim had signed "CI" and that Gous admitted that it was a
mistake. There was also a reference to "recent
authority to pay
to DF's daughter for signature of Rl million" being a reference
to "C60". It is stated that "refunded
balance to the
bank account".
Importantly,
the following is minuted: "Kim agreed:
1.
Pay SBSA the Rl million.
Let
us know when will pay by close of business today."
Underneath
that is recorded
"Meeting
with G (ie a reference to Fonseca) tomorrow to sign agreement to
finish building."
[38]
After the meeting, and on 25 April 2007, the next day, Pavlakis sent
an e-mail to the borrower's attorney in order to report
back on the
progress made at the 24 April meeting. This is exhibits "C34"
and "C35". It is convenient to quote
the contents:
"Dear
Mario
By
way of update, I advise that we met with Mr Kim, who was accompanied
by his interpreter and Renier Gous.
We
discussed the matter at hand, and were advised by Gous that:
1.
the Progress Payment Request in the amount of Rl,5 million was signed
by Mr Kim, in error;
2.
Rl,3
million was paid into the account, but R300 000,00 was repaid
by Mr Kim therefore the outstanding amount is Rl million;
3.
he approached your client's daughter, the authorised signatory, who
apparently signed a fresh progress payment authorisation
in the
amount of Rl million, which was allegedly submitted to us;
4.
he was meeting with your client to finalise and sign an agreement
with him with a view to completing the property.
After
further discussions, Kim agreed to repay to us the Rl million.
Simultaneously, we will reverse any interest, charges and other
like
costs in order to place your client back in the position that he was
in prior to the progress payment having been made.
Gous
undertook to advise me, by the close of business today, as to when we
may expect the payment into your client's bond account.
Please
confirm point 3 above with your client.
I
will keep you updated as to any developments. Kind regards Athena
Pavlakis"
[39]
Thi s e-mail message is a clear reflection of what Pavlakis had
minuted about the 24 April meeting.
[40]
Pavlakis said that Gous did indeed phone her that afternoon but said
he would come back the next day, which he never did. Thereafter
she
did not manage to make any contact with him on his phone. This last
mentioned evidence is undisputed.
[41]
On 2 May 2007 the borrower's attorney wrote to Pavlakis complaining
about the fact that the monies had not yet been paid. He
did not deal
with her query, in "C34" and "C35", about the
alleged other authority for Rl million signed by
Joana ("C60")
and did not clarify the point as she asked him to do, supra.
[42]
Importantly, Pavlakis then prepared a letter of demand dated 7 May
2007 and addressed to the defendant. It was delivered by
hand by
Martie. Martie confirmed this much when she gave evidence. This
letter of demand (exhibit "C37" and "C38")
was
crafted by Pavlakis in consultation with Maniram and other senior
officials.
I
consider it convenient and important to quote the contents of this
letter: "Dear Sir
In
re Joana Daf Trust ('our customer')
We
refer to the above matter and in particular to the meeting held at
our offices on 24 April 2007 and confirm the following: 1.
Your
Renier Gous ('Gouws') requested you to sign a progress payment
request ('the request') dated 6 November 2006, pursuant
to
a building loan granted by us, to our customer in the amount of Rl
500 000,00 (one million, five hundred thousand rands) in respect
of
the property currently being erected by your company, which property
description is Erf 265 Sandown Extension 24 ('the property').
2.
Gous admitted and confirmed that you were not authorised to sign the
request, and notwithstanding the aforesaid, required you
to sign the
same, which you did.
3.
Subsequent to our assessors having attended at the property, equity
in the amount of Rl 316 750,00 (one million, three hundred
and
sixteen thousand seven hundred and fifty rands) was found therein,
which amount was paid to your company on 27 November 2006.
4.
On 8 December 2006 your company, repaid to us, the amount of R316
750,00 (three hundred and sixteen thousand seven hundred and
fifty
rands).
In
light of the above facts, it was agreed at the aforementioned meeting
that in order to remedy the situation, your company would
repay to us
the amount of Rl million (one million rand) which would be refunded
to our customer. Thereafter, your company would
enter into discussion
regarding the payment of monies due to you, for work done by your
company on the property, which matter would
not involve us. Further
to the above, we confirm your undertaking to let us have payment of
the amount of Rl million (one million
rand) as set out above, which
we requested to be placed in receipt thereof, or to have firm
commitment as to when such funds would
be paid to us by the close of
business, Friday, 4 May 2007.
We
confirm that we have not been placed in receipt of the abovementioned
funds, nor have we been given a firm date of when such
funds would be
received by us.
In
light of the above, we have been left with no option but to consider
alternative measures to recover the aforesaid amount. Yours
faithfully"
The
letter was signed by Mr Rob Pellizzer a senior official in the Home
Loans department.
[43]
The following should be said about this letter of demand:
1.
Like the e-mail to the borrower's attorney, "C34" and
"C35", it is a clear reflection of the minute kept
by
Pavlakis of the 24 April meeting.
2.
The letter was addressed to Kim, c/o the defendant close corporation.
3.
Martie gave evidence that she hand delivered the letter to Gous who
received it on behl of the defendant.
4.
In cross-examination, Gous admitted having received the letter from
Martie, and said he gave it to his attorney.
Later
in his cross-examination, Gous attempted, unconvincingly, to suggest
that he may be confusing this letter with another document.
5.
The letter was never responded to by the defendant's attorney or
anyone else on behalf of the defendant.
6.
I considered Pavlakis to be a strong and impressive witness. She is
an admitted attorney and an officer of this court. No reason
whatsoever could be advanced why she would fabricate not only the
minutes she kept of the meeting (at a stage when she would not
have
anticipated non-compliance with the undertaking to pay), let alone
what she said to the borrower's attorney in "C34"
and "C35"
or what was said in the letter of demand, "C37", which she
crafted.
As
it was put in cross-examination to Gous, the only witness who
testified on behalf of the defendant, Pavlakis would have landed
herself in hot water if she had introduced a false and fabricated
version in these documents. Moreover, Maniram would have picked
it up
and probably taken steps against her. She had no reason whatsoever to
falsify the version. On the overwhelming probabilities
her version,
in my view, must be true, and falls to be accepted.
[44]
Pavlakis also testified about "C60". As pointed out, she
never knew about its existence until it was mentioned at
the 24 April
meeting. Requests on behalf of the plaintiff for "C60" to
be produced were never complied with. She never
saw it, until it
became part of the litigation papers. It did not feature as an
annexure to any of the affidavits relating to the
liquidation
application and the application to rescind the liquidation order.
Fonseca mentioned at one stage that he would arrange
for a PPR to be
issued (presumably "C60") once a snag list relating to the
unacceptable workmanship presented by the
defendant had been attended
to. This may explain why, on the overwhelming weight of the evidence,
"C60" never reached
the plaintiff for purposes of
facilitating a progress payment.
[45]
Pavlakis was subjected to lengthy and intensive cross-examination.
She was not in any way discredited and stood her ground.
I will only
mention a few aspects of the cross-examination which, in my view, are
relevant for purposes of deciding this dispute.
[46]
She was confronted with an argument, which was not pleaded, that, on
a general reading of the building contract entered into
between the
borrower and the defendant, there is provision for the defendant, as
contractor, to apply for progress payments and
to sign the PPR, like
Kim did in respect of "CI". Counsel for the defendant, Mr
Smit, relied, for purposes of this argument,
on clause 4 of the
building contract, which is to be found on exhibit "CIO".
The witness disagreed with this proposition
and maintained that the
borrower, who is liable to pay the bond, must authorise the payment.
In
my view, there is no merit in this argument. Joana was the authorised
signatory. The fact that Kim signed the PPR without authority
was
never in dispute until this argument was raised during the trial. As
appears from the minute which Pavlakis kept, "C33",
Gous
apologised for having persuaded Kim in error to sign the PPR, "CI".
When Gous was cross-examined, he was confronted
with the fact that he
tendered his apology and did not deny having done so. The relevant
passage, according to my notes, of the
cross-examination of Gous on
this point reads as follows (I paraphrase):
"Hulle
se u vra om verskoning vir Kim se handtekening? — Ek kan nie se
of dit so is of nie.
Moontlik
is dit so? — Ja."
[47]
With regard to the much debated "C60", which she had no
knowledge of as I pointed out, Pavlakis was confronted with
the fact
that the borrower's attorney, already on 27 January 2007, wrote as
follows to the defendant's attorney:
"8.
Our client has since the commencement of the building works only
authorised one payment draw, in an amount of Rl million
and signed
the required Progress Payment Report."
It
is common cause that this was a reference to "C60". I
pointed out, that, on the evidence, the issuing of "C60"
appears to have been subject to a snag list being attended to and
unacceptable workmanship being remedied.
In
response to this observation in the letter, supra, Pavlakis, when
deposing to an affidavit during the liquidation proceedings
said the
following:
"91.
In the aforesaid respect the trust's attorneys made a mistake in
their letter to the attorneys of Korea One dated 27 January
2007
because they erroneously stated that the trust had authorised a
payment draw in an amount of Rl million in the past. 92. The
error
came about as a result of the urgency with which the instruction was
received and the facsimile thereafter drafted and transmitted.
The
court will note that the 27th of January 2007 was a Saturday. The
attorney involved quickly attended his offices in order to
draft the
said letter and unfortunately at the time comprehensive instructions
had not been taken."
The
borrower's attorney confirmed this state of affairs in a verifying
affidavit. The extract from the letter of 27 January 2007
is exhibit
"CI 11" and the extract from the affidavit of Pavlakis is
"C332". The statement in the verifying
affidavit can be
found at "C372".
In
any event, the fact that Joana did sign MC60" on 29 November
2006, is, in my view, irrelevant: on the overwhelming evidence
"C60"
never reached the plaintiff and it is common cause that it was never
processed as a PPR. It did not feature as
an annexure to any of the
affidavits in the liquidation and rescission proceedings. Gous
testified that he telefaxed it to Martie.
Martie denied it. Diligent
searches at the plaintiff bank did not reveal the document and it
could not be traced on any of the
computers. Gous testified that he
traced the original in about June or July 2007 and gave it to the
defendant's attorney. It was
never explained why the attorney did not
make the existence of the document public because the liquidation
order was only granted
in September 2007.
It
should also be borne in mind that Pavlakis testified that at the 18
April meeting between her, Maniram and the borrower Fonseca
and his
attorney, the existence of "C60" was not mentioned. This
evidence is undisputed.
[48]
The witness insisted, repeatedly and with some force, that Kim
undertook, at the meeting of 24 April, to repay the amount of
Rl
million. Of course, this is clearly minuted in "C33", and
recorded in "C34" and "C37".
[49]
It was put to Pavlakis that Martie received "C60" from Gous
and that Martie confirmed this much to the witness. This
was denied.
I
point out that when Martie testified, she denied any knowledge of
"C60".
[50]
The witness said that if "C60" had been produced timeously,
and it had turned out that it was properly authorised,
the borrower's
account could be debited on the strength thereof and there would have
been no difficulty or need for litigation.
She admitted having told
Gous and Kim at their 24 April meeting that if they cannot produce
the authority ("C60") the
Rl million had to be repaid. It
is perhaps because of the defendant's inability to produce such
authority, that Kim agreed to repay
the Rl million.
[51]
It was put to Pavlakis that Gous would deny having phoned her after
the meeting (as undertaken during the meeting) to indicate
when
payment would be made. In response, Pavlakis referred to an e-mail,
dated 26 April 2007, two days after the meeting, which
she wrote to
the borrower's attorney. It is convenient to quote the contents:
"Hi
Mario
The
error made by Gous, was that he knew the processes and procedures in
dealing with the bank in respect of development loans,
and
notwithstanding that knowledge, requested Kim to sign the Progress
Payment Request form.
He
did phone yesterday, but advised that he would get back to me today,
I am still waiting. I'll let you know. Hope you have a good
week-end!
Kind regards Athena"
[52]
In my view, this is clear corroboration of the evidence of Pavlakis
that Gous did phone her after the meeting. What was put
to her to the
contrary, must cast a shadow over the credibility of Gous. The e-mail
I referred to is exhibits "D236"
and "D237".
[53]
Pavlakis was also cross-examined about her evidence that, at the 24
April meeting, she made it clear on behalf of the bank
that the
payment had to be made by not later than 4 May 2007. It was put to
her that Gous would dispute that this deadline was
set during the
meeting. It was put to her, correctly, that this fact was not
recorded in the minute "C33". The witness
insisted that she
set the deadline. Her evidence is corroborated by none less than Kim
himself who, in one of the affidavits relating
to the liquidation
proceedings, said the following:
"The
respondent was advised that the payment of the sum of Rl million had
to be made to the applicant by no later than the
4th of May 2007,
failing which the applicant would take further action."
This
is exhibit "CI02". This also casts a shadow over the
credibility of the evidence of Gous.
[54]
The witness complained repeatedly that despite insistent requests on
behalf of the plaintiff for the "fresh PPR"
or "C60"
(as it later turned out) to be inspected, this never happened. It
would have been a simple matter for the defendant
(or its attorney)
to produce MC60" in order to avoid liability to repay the amount
of Rl million. The defendant's failure
to do so, can only lead to the
reasonable inference that the defendant had no confidence in "C60".
This conclusion is
fortified by the fact that, on the overwhelming
evidence, "C60" never reached the plaintiff and Martie has
no knowledge
of the document.
[55]
As to the agreement by Kim to repay the money, Pavlakis said that Kim
gave this undertaking himself, through his interpreter
James Kim at
the 24 April meeting.
[56]
I repeat that Pavlakis was an impressive witness who dealt with this
intensive cross-examination without any apparent difficulty.
[57]
Martha Jacoba Herbst is Martie, who was born Venter and later became
Herbst.
[58]
By 2006 and 2007, she had worked for the plaintiff as a development
loans consultant for about ten years. She was with the
plaintiff bank
for eighteen and a half years by the time she left the bank in 2010.
[59]
She impressed me as an honest and satisfactory witness.
[60]
As a sales consultant, she spoke to investors about new development
loans, and helped them to motivate their applications for
such
development financing.[61] She had nothing to do with the approval
process, for example, involving the approval of a PPR.
The bank had a
separate department dealing with progress payments. Upon receipt of a
PPR, a valuation would be done and, with the
authority of the
client's signature, the appropriate amount would
be
paid to the builder.
[62]
She knew the defendant in 2006 and 2007. One of the previous
development consultants left and handed the defendant over to
her as
a "client". She also mainly dealt with Gous. She helped
with the preparation for loan applications.
[63]
She never had authority to grant loan applications. The defendant
also sometimes gave her a PPR to pass on to the bank or sometimes
they did so themselves.
[64]
She knows about "CI" and the payment of Rl 360 750,00 which
the plaintiff made to the defendant in November 2006.
The document
was handed to her, she saw the signature and requested the PPR
department to send an assessor to do the necessary.
[65]
Importantly, after "CI" she did not become involved in
dealings with the borrower and the defendant regarding another
PPR
(presumably this would have been "C60").
"C60"
was shown to her and it was put to her that the defendant said that
it was signed by the borrower for Rl million
on 29 November 2006. She
said that she could not recall ever seeing that document before. She
does not recall that it was ever
presented to her.
[66]
In her evidence in chief, she was asked to comment on paragraph 7.4
of the defendant's plea which reads as follows:
"7.4
The plaintiff, as represented by Ms Venter, the defendant by R Gous,
and at Johannesburg orally agreed, upon presentation
of annexure "B"
(my note: this is 'C60') to Ms Venter by R Gous, the following:
7.4.1
that the defendant would not have to repay the full amount of Rl 316
750,00 already paid by the plaintiff to the defendant;
7.4.2
that the defendant would repay to the plaintiff the difference
between the Rl 316 750,00 and the Rl million namely R316 750,00
and
the balance would constitute the payment of Rl million authorised by
the borrower as per annexure 'B' hereto."
Martie
denied any involvement in such an agreement. She said she would never
have been able to make such an agreement because she
did not have the
authority to do so. She may have, hypothetically, mentioned to the
defendant that if there was an authority for
the Rl million it may
have been reasonable for them simply to refund the balance of some
R316 000,00. The agreement as pleaded,
was emphatically denied.
[67]
Martie did not recall the 24 April meeting but conceded that she may
well have been in attendance. It should be borne in mind
that when
she gave evidence, it was about five years after the event.
[68]
Martie remembers that Pavlakis gave her an envelope to deliver to
Gous. This was in May 2007 and would have been the letter
of demand
"C37" although Martie did not read the contents of the
envelope. She explained the circumstances under which
she did the
delivery. She had just come out of hospital and could not drive. Her
parents drove her to meet Gous at the BP oasis
on the highway between
Fourteenth Avenue and the Beyers Naude off ramp. This evidence has a
ring of truth. I see no reason to reject
it. I have already pointed
out that Gous, in his evidence, initially admitted having received
the letter of demand from Martie
and thereafter tried to suggest that
he may be confusing what he received from her with another document.
This was unconvincing
evidence and I reject it. There was no other
evidence by Pavlakis about another document having been sent to Gous
by hand through
Martie.
[69]
In her evidence in chief, Martie was asked to comment on an
allegation made by Kim in one of his affidavits in the liquidation
proceedings. This is to be found on
"C407".
Kim alleged that Martie worked in the Home Loans department and
managed and controlled the account. He further
said "It was to
her that the Progress Payments Reports were presented, she sent out
the valuators to the property, processed
the claim and gave the
approval on behalf of the first respondent (my note: this is the
defendant). She was the person that contacted
both the first
respondent and the DAF trust in the event of any problems or queries
in respect of the account."
Martie
rejected this evidence out of hand. She did not work for Home Loans
and she did not control the account. If she was handed
a PPR she only
acted like a courier and passed it on to the correct department. She
never dealt with the PPR or worked in the PPR
department. She never
sent the valuators to the property. She only asked the PPR department
to do so. She never processed any claims.
She never approved any
progress payment claims on behalf of the plaintiff. She had never
dealt with the DAF trust in her life.
[70]
As I pointed out already, she did not recall ever receiving the PPR
which was later said to be "C60" from Gous. If
she did, she
would simply have passed it on to the PPR department and it would
have been found in the plaintiffs possession, which
it was not,
despite a diligent search.
[71]
In cross-examination, Martie stuck to her guns. She admitted calling
Gous to say that the plaintiff was concerned about "CI"
because it was signed without authority and that the bank wanted the
money back. She admitted that Gous told her that he wanted
a day or
two to sort out the matter.
[72]
As to "C60", it was put to her that Gous faxed the document
to her. She said that she did not receive it by fax and
when the
plaintiff approached her she went through her laptop computer and the
document was not on those records. Moreover, if
it had been faxed to
her she would pick it up on the laptop. This she could not do. She
does not recall ever seeing the document.
She
confirmed having discussed the refund of R316 750,00 with the
defendant (Gous) on the basis, as I already pointed out earlier,
that
if there had been another authority for a Rl million payment it may
well be reasonable only to refund the balance of R316
750,00 and
employ the authorised Rl million to cover the rest. It all depended
on a properly authorised new PPR.
[73]
She did not recall the 24 April meeting. It was put to her that on
that occasion she confirmed that she received the PPR of
Rl million
("C60") from the defendant. She denied any recollection of
this.
[74]
At the conclusion of her evidence, I was satisfied that Martie was an
impressive and honest witness.
[75]
Shuvek Maniram was employed by the plaintiff during the relevant
time, namely 2006 and 2007. He was attached to the Home Loans
department.
[76]
Maniram became involved with the matter when he received a message
from another official, Johan Strydom, about the "criminal
affidavit" which Fonseca had deposed to with a view to
instituting criminal prosecution against the defendant because of the
alleged fraudulent conduct involving the signature of "CI".
He referred the matter to the legal department where Pavlakis
became
involved.
[77]
Maniram testified convincingly about the 18 April meeting and the 24
April meeting which he attended with Pavlakis. He corroborated
her
evidence in every material respect. He was also an impressive
witness.
[78]
Martie attended the 24 April meeting from the start. She was not
called in later like Gous testified.
[79]
At the 24 April meeting Gous indeed said that Kim had signed "CI"
in error and that he had asked Kim to do so. Gous
apologised. "C60"
was mentioned for the first time at this 24 April meeting. The
witness asked for the document to be
produced but this never
happened.
[80]
Maniram emphatically stated that Kim, at the meeting, undertook to
repay the money. Pavlakis asked when this would happen and
Gous said
he would let her know by the end of the day. She said that the bank
would not wait longer than 4 May. There was a clear
agreement entered
into between the parties that Kim would repay the money.
[81]
Maniram confirmed that Pavlakis kept a minute of the meeting as it
progressed. This was "C33" and "C33A".
[82]
The witness confirmed that the defendant never repaid the Rl million
and that "060" was never received by the bank
or processed.
He was asked about the counter-claim based on an allegation that the
liquidation was erroneously applied for and
that this led to damages
suffered by the defendant. The witness disputed this statement. He
said that the bank paid without a mandate
as a result of the
signature on "CI", had to refund the borrower and had an
agreement from the defendant that the monies
would be repaid. It was
clear that the defendant owed the plaintiff the amount of Rl million.
[83]
In cross-examination Maniram stuck to his version. He was in no way
discredited.
[84]
In cross-examination, it was put to the witness that Gous would say
that after he told them about "C60" which had
been faxed to
Martie, they (Maniram and Pavlakis) summoned Martie to the meeting
and this Maniram denied. He said that Martie attended
the meeting
from the outset and she was never summoned. It was put to him that
Gous would say that Martie told the meeting that
she indeed received
the "fresh PPR". This the witness denied and said that had
she received it, the bank would have had
it on record. He stated
repeatedly and compellingly that the defendant undertook to repay the
money. He hotly disputed a proposition
that the defendant would deny
having given such an undertaking to repay. He also supported the
allegation in the minute "C33"
that the defendant indicated
that there would be a meeting with the borrower with a view to
finishing the building.
[85]
He confirmed that after the meeting the plaintiff conducted a
diligent search for "C60". All the PPR's are kept in
a
building loan file and this document was not in the file. He looked
through the file himself. He did so to double check. The
bank needs
the actual document. It was never furnished. The bank needs it to see
if the customer (the borrower) authorised the
request for the
payment.
[86]
Maniram testified about the issues I already covered when dealing
with the evidence of Pavlakis. I do not intend embarking
upon
unnecessary repetition. Maniram was a solid and impressive witness.
His attitude was that the money is still outstanding,
and has to be
repaid.
[87]
This concluded the case for the plaintiff.
[88]
Renier Johannes Frederik Gous was the only witness called by the
defendant.
[89]
I have already dealt with various aspects of the evidence of Gous.
For the reasons already illustrated, I did not consider
him a good
witness. I question his credibility for reasons mentioned.
[90]
In 2006 he had his own business. It involved arranging financing for
clients through the plaintiff bank. In 2006 he arranged
such
financing for the defendant and also helped the latter with
administrative duties.
[91]
He completed "CI" and got Kim to sign it. He attempted to
present the argument, supra, that Kim was in any event
entitled to
sign "CI" because of the provisions of clause 4 of the
building contract, which I have dealt with.
[92]
He said he gave "CI" to Martie. He faxed it to her.
[93]
After the money was received, Martie told him that Fonseca was
unhappy and wanted the money back. Martie told him to refund
the
amount of R316 750,00. I already dealt with Martie's evidence in this
regard. He said that he then called a meeting with Fonseca
where his
daughter, Joana, signed "C60". This he faxed to Martie and
he later confirmed with her that she had received
the document.
[94]
At the 24 April meeting he told the bank's officials about "C60"
which he had faxed to Martie. Pavlakis traced Martie
and summoned her
to the meeting where
Martie
confirmed acceptance of the document. The bank was not satisfied, and
asked for the document to be produced. He undertook
to trace the
document.
[95]
With reference to what was minuted in "C33", namely that
Kim agreed to pay the Rl million, Gous denied that such
an agreement
was entered into.
[96]
With reference to what Pavlakis minuted in "C33" that the
defendant would meet with Fonseca the next day "to
sign an
agreement to finish the building" Gous denied that there was
such a discussion at the meeting. On the overwhelming
probabilities,
I can see no reason whatsoever why Pavlakis would simply invent and
minute such a statement if it had no factual
basis. To make matters
worse for Gous, when he was asked whether there was any chance that
the defendant would agree to complete
the building for the borrower
he answered in the affirmative. He repeated this evidence. This is at
odds with the proposition put
to Pavlakis in cross-examination that
the defendant would at that stage no longer be prepared to complete
the building. All this
was said by Gous during his evidence in chief.
[97]
With further reference to the minute "C33" where it is
recorded that "Gous admits mistake" the witness
denied
having admitted that he had made a mistake.
"Ek
sou gese het ons het die dokument laat teken maar op versoek van die
bank die vorderingsbetaling hersien want ons het 'n
goeie verhouding
met Standard Bank, en doen soos hulle vra."
Of
course, as I already pointed out, Gous changed his tune in
cross-examination when it was put to him that he indeed offered an
apology and he answered
"Ek
kan nie se of dit so is of nie. Moontlik is dit so? — Ja."
[98]
In his evidence in chief, Gous confirmed that the bank's officials,
at the 24 April meeting, insisted on repayment of the Rl
million.
When asked what his reaction to such request was, he said "Ons
voel ons skuld dit nie, maar sal eers na ons regsverteenwoordigers
gaan en dan terugkom." Gous was asked in chief whether this
statement was made at the meeting and he confirmed it. This, of
course, is entirely new evidence which was never put to the
plaintiffs witnesses.
[99]
In chief, when Gous was asked what he did after the meeting, he said
he went to the defendant's attorney and reported to her
about the
meeting.
[100]
Importantly, and still in his evidence in chief, Gous was confronted
with the letter of demand "C37" and asked whether
he had
ever seen it before. He confirmed that he did but could not remember
when. Significantly, he confirmed that he received
it from Martie. He
said he gave it to his attorney. He said that the defendant never
reacted to "C37", the reason being
that they left it to
their attorney to deal with. He does not know why his attorney never
reacted thereto.
[101]
Gous confirmed that he was well acquainted with Kim, had worked with
him for some eight years and was still working with him.
This raises
questions about his objectivity as a witness.
[102]
As far as the cross-examination of Gous is concerned, I have already
dealt with a number of aspects thereof.
[103]
He repeated his argument that the plaintiff knew that Kim was duly
authorised to sign "CI" because of the contents
of the
building contract. I have already rejected this as a fallacious
argument.
In
this regard, it was put to Gous that Kim offered a different "excuse"
in one of his affidavits by blaming the bank
for failing "to
verify the signature of the representative of the trust, before
making payment". Gous simply said that
he stuck to his version
that Kim had the right to sign "CI". This is unconvincing.
[104]
As I already pointed out, he started off by denying the statement in
"C33" that he had offered an apology and later
he conceded
that he may have indeed apologised. He offered no explanation as to
why Pavlakis would have fabricated the contents
of"C33".
[105]
When Martie phoned him to say that Fonseca was unhappy and wanted a
refund of the Rl million he did not tell Martie that the
defendant
had already obtained a "fresh PPR" as already discussed. He
only asked her what to do, and she said the R316
750,00 had to be
paid. Of course, Martie denied this.
[106]
When he was asked to comment on the question as to why Fonseca would
be unhappy because Kim had signed "CI", he
said "Ek
lewer nie daaroor kommentaar nie."
[107]
Reverting to the 24 April meeting, Gous repeated that the bank's
officials insisted on payment of the Rl million and also
on
production of "C60" which they did not have in their
possession. He confirmed that he told them that he would look
for the
document and revert to them. When asked whether the document was
traced and sent to the bank he answered in the negative.
After the
meeting he reported the developments to the defendant's attorney.
[108]
As I already pointed out, Gous said in June or July 2007 he
discovered "C60" in one of the side-pockets of his
briefcase. He phoned the defendant's attorney, told her that he had
found the original document and gave it to her right away. It
is
common cause that this document never featured in the liquidation
proceedings even though the liquidation order was only granted
in
September 2007 and this was followed by lengthy litigation involving
a rescission application and a later opposed application
resulting in
the liquidation not being granted.
[109]
I have dealt with the evidence of Gous that the 4 May deadline was
not set at the 24 April meeting and that Kim, in a later
affidavit,
offered the opposite version.
[110]
As he did in chief, Gous admitted in cross-examination that he
received the letter of demand "C37" from Martie and
gave it
to his attorney. When asked why his attorney did not respond thereto,
he said "Ek kan nie fn antwoord daarop gee nie."
Thereafter
he, unconvincingly, suggested that he may be confusing "C37"
with another document. He also denied knowledge
of the BP oasis where
Martie said the document was delivered. I find this evidence
unconvincing. The reasons for this conclusion
have already been
illustrated. The same applies to my reservations, in certain
respects, of the credibility of this witness.
[111]
When Gous was asked why "C60" never featured amongst the
papers flowing from the lengthy liquidation and rescission
proceedings, he said "Ek kan geen verduideliking gee nie."
[112]
This concluded the case for the defendant.
Conclusions
[113]
I have already dealt with my conclusions when analysing the evidence.
[114]
I am satisfied, on the overwhelming probabilities, that what was
minuted by Pavlakis in "C33", and repeated by her
in "C34"
and "C35" as well as in "C37" and "C38",
is a true reflection of what transpired
at the 24 April meeting.
[115]
I am satisfied that the plaintiff proved, on the probabilities, that
the parties entered into an oral agreement (confirmed
in the written
minute "C33") that the defendant would pay the plaintiff
the amount of Rl million. This is the cause of
action pleaded by the
plaintiff in the particulars of claim. The plaintiff is out of pocket
to this extent because "CI"
was submitted to the plaintiff
under false pretences. The claim ought to succeed.
[116]
As to the counter-claim, there was no evidence whatsoever offered to
persuade me that there is merit in the counter-claim.
I find no merit
whatsoever in the case pleaded in the counter-claim, namely that the
plaintiff launched the liquidation proceedings
knowing that the
allegations relied upon, ie the indebtedness to the plaintiff by the
defendant, were false. The counter-claim
falls to be dismissed.
The
mora date
[117]
The plaintiff claims interest at the prescribed rate of 15,5% per
annum from the mora date to date of payment. I debated the
appropriate mora date with Mr Konstantinides, the plaintiffs counsel.
He reminded me that the plaintiff refunded the Rl million
to the
borrower on 25 May 2007 and submitted that interest should run from
26 May 2007, which appears to me to be the correct approach.
The
order
[118]
I make the following order:
1.
Judgment is granted against the defendant in favour of the plaintiff
for:
1.
payment of the amount of Rl million;
2.
interest on the aforesaid amount at the rate of 15,5% per annum
calculated from 26 May 2007 to date of payment;
3.
costs of suit.
2.
The counter-claim is dismissed with costs.
WRC
PRINSLOO
JUDGE
OF THE NORTH GAUTENG HIGH COURT
29043-2007
HEARD
ON: 15,16,19, 20, 22 AND 23 MARCH 2012
FOR
THE PLAINTIFF: ADV N KONSTANTINIDES
INSTRUCTED
BY: VAN HULSTEYNS ATTORNEYS
FOR THE DEFENDANT: M SMIT
INSTRUCTED
BY: OTILIA DE SOUSA ATTORNEYS