SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document
in compliance with the law and SAFLII Policy
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case Number: 58654/2012
Reportable: YES / NO
Circulate to Judges: YES / NO
Circulate to Magistrates: YES / NO
Circulate to Regional Magistrates: YES / NO
In the matter between:
DEPARTMENT OF PUBLIC WORKS PLAINTIFF
and
MVELA PHANDA CONSTRUCTION (PTY) LTD FIRST DEFENDANT
NCHUAPE SOLOMON MALEBYE SECOND DEFENDANT
MPELO CONSTRUCTION CC THIRD DEFENDANT
TEBOGO ORIGINEOUS MOLOISANE FOURTH DEFENDANT
Delivered: This judgment was hande d down electronically by circulation to the
parties’ representatives by e-mail. The date and time for hand-down is deemed to be
15h30 on 20 May 2025.
ORDER
It is ordered that:
1. The first and second defendant, are liable for payment of the sum of R33 726
705.90 plus interest at the prescribed rate of interest, from 11 October 2012 (date of
service of summons) to date of payment, jointly and severally, the one paying, the
other to be absolved.
2. The first and second defendant shall pay the costs of suit, which costs shall
include the costs of two counsel, where so employed.
JUDGMENT
PETERSEN J
Introduction
[1] The plaintiff, the Department of Public Works (‘the DPW’) instituted action
against the first defendant Mvela Phanda Contsruction (Pty) Ltd (‘Mvela Phand a’)
and the second defendant Nchuape Solomon Malebye (‘Mr Malebye’) on 10 October
2012, claiming payment of the sum of R33 726 705.90 plus interest from date of
summons to date of payment. The third defendant Mpelo Construction CC (‘Mpelo
Construction’) and the fourth defendant Tebogo Origineous Moloisane (Mr Moloisane)
were cited but no relief is sought against them.
[2] The DPW advances four main claims, with alternatives. The claims against
Mvela Phanda (Claims A, B, C and the alternatives) is essentia lly based on the
condictio indebiti. The claim against Mr Malebye (Claim D with an alternative in delict)
is based on his contract of employment with the DPW. Having regard to the nature of
the claims it is emphasized that the claims for purposes of this m atter have nothing
to do with corruption or fraud.
Background
[3] When South Africa won the right to host the 2010 Soccer World Cup a
plethora of contracts, pursuant to successful tenders, were awarded to upgrade
infrastructure in anticipation of the inf lux of visitors from across the globe. The
Skilpadshek Border Post at the South Africa -Botswana port of entry formed part of
such infrastructure upgrades.
[4] Mvela Phanda was awarded two tenders relevant to the Skilpadshek Border
Post. The first contract involved the upgrading of the border post itself. The second
contract involved the upgrading of accommodation or housing for the staff - the
Skilpadhek Border Post Residential Contract. The present matter turns on the
second contract concluded between the DPW and Mvela Phanda on 27 August 2008
by way of a standard Joint Buildings Contracts Committee (JBCC) agreement (‘the
contract’).
[5] The DPW handed over the site to Mvela Phanda on 22 October 2008. On 3
November 2008, the Health and Safety Consultant of Mvela Phanda stopped any
further operations at the site following the discovery of tunnels and holes caused by
previous manganese m ining around the site. The construction site was deemed
unsafe, and construction was rendered impossible. Mvela Phanda duly informed the
DPW.
[6] On 10 February 2009 a meeting was held between the DPW and Mvela
Phanda at the offices of the DPW. A letter from Mvela Phanda to the DPW of 12
February 2009 records that a “ Mr Molebe”, informed Mvela Phanda at the meeting
that the DPW intended cancelling the contract and that Mvela Phanda should submit
“their cost for cancellation ” to the DPW. “ Mr Molebe” was said to be Mr Malebye on
instructions given to his Counsel by Mr Malebye himself. Mr Malebye, would later,
however, dispute that he was present at the meeting of 10 February 2009. Mvela
Phanda forwarded its ‘cost of cancellation’ as requested by the DPW in an amount of
R46 711 019.39.
[7] On 19 February 2009, Mr Mabuso, the Deputy Director: Project Management
Support, and Project Manager on the contract informed Mr Potgieter that he had
“presented a draft request for cancellation to the COO ” who happened to be Mr
“presented a draft request for cancellation to the COO ” who happened to be Mr
Malebye. Mr Malebye as with his belated denial that he was at the meeting of 10
February 2009, initially sought to deny that such request was submitted to him.
[8] The DPW ultimately cancelled the contract on 13 March 2009. Mr Malebye, as
the Chief Operations Officer, following line authorisations in the DPW, signed in
support of the recommendation to cancel the contract. Mr Moroka of the DPW, on
even date, duly informed Mvela Phanda of the cancellation of the contract by the
DPW by way of letter, confirming in no uncertain terms that: “Claims for damages are
to be dealt with strictly in accordance with the clause referred to above [39.2]. The
Department offers to honour its obligations to settle any proven claims in the form of
damages and/or loss of profit as provided for in the Conditions of Contract.”
[9] The cancellation fee had to be determined in terms of clause 39.2 of the
contract which provided that:
“39.2 The employer shall be entitled at any time to unilaterally terminate or
cancel thi s agreement or any part thereof. Save for the following the
contractor shall not be entitled to claim any other amounts whatsoever in
respect of such termination or cancellation of this agreement. The employer
shall be obliged to pay the contractor as dama ges and/or loss of profit the
lesser of:
39.2.1 An amount not exceeding ten per cent (10%) of the contract sum;
39.2.2 Ten percent (10%) of the value of incomplete work;
39.2.3 The contractor's actual damage or loss as determined by the employer
after receipt of evidence substantiating any such damage or loss.”
[10] The essentialia of the sub -clauses of clause 39.2 is to be interpreted as
follows. In terms of clause 39.2.1 a cancellation fee not exceeding 10% of the
contract sum of R374 392 624.62 was pro vided for. This sum could not however be
paid without having regard to clauses 39.2.2 and 39.2.3, which could only be
determined upon proof from Mvela Phanda of the value of incomplete work; or
evidence substantiating such loss which was at the discretion of DPW; and
determined by DPW upon receipt of such proof. The proof could include loss of profit
determined by DPW upon receipt of such proof. The proof could include loss of profit
by Mvela Phanda. The contract could not be circumvented and therefore No other
amounts could be claimed ro for that matter agreed upon, other than those
calculated in terms clauses 39.2.1. to 39.2.3.
[11] On 12 October 2009, Mr Malebye, the then Acting Director -General of the
DPW, approved payment of the ‘ cancellation fee’ purportedly in lieu of the damages
or loss that Mvela Phanda suffered because of the ter mination of the contract. The
‘cancellation fee’ was paid to Mvela Phanda on 13 October 2009.
The claims against Mvela Phanda
Claim A
[12] The DPW alleges in Claim A that it paid Mvela Phanda an amount of R33 726
705-90 on or about 13 October 2009, in the bona fide and reasonable, but mistaken
belief that it was owing to Mvela Phanda. The DPW further alleges that the amount
paid as a can cellation fee was not owing as Mvela Phanda had not furnished the
DPW with evidence substantiating any actual damage or loss as required by clause
39.2.3 of the contract because of the cancellation of the contract by the DPW.
[13] Mvela Phanda asserts the DPW, submitted, without basis, its annual financial
statements for its previous financial year and argued that its profit percentage for the
entire company for that year, and not only its construction component, would have
been repeated on the contract. The DPW therefore claims that it could not determine,
the actual damage or loss suffered by Mvela Phanda as required by clause 39.2.3;
and resultantly the requirements of clause 39.2.3 were never met.
[14] The case for the DPW is that, since one of the th ree amounts required to
apply the formula in clause 39.2 was missing, no amount could be determined in
terms of clause 39.2 as being ‘ the lesser of’ the amounts calculated in terms of
clauses 39.2.1, 39.2.2 and 39.2.3. No amount could therefore be determin ed as the
amount the plaintiff was “ obliged to pay the contractor as damages and/or loss of
profit”.
[15] In terms of clause 39.2, Mvela Phanda was therefore not entitled to claim,
“any other amounts whatsoever”, or to be paid any other amounts by DPW, sa ve for
an amount calculated in accordance with clause 39.2. The payment of the
cancellation fee of R33 726 705.90 the DPW asserts was therefore in breach of
clause 39.2.
Claims B and C
[16] The DPW made two well -founded concessions in relation to Claims B and C
at the close of its case. Nothing more needs to be considered in respect of these
claims.
[17] At most it should be noted that the DPW in relation to Claim B accepts that
Mvela Phanda submitted its valuation of work done to the project quantity su rveyor
on 10 February 2009, which puts an end to claim B.
[18] In relation to claim C, the DPW accepts Mr Potgieter's concession that the
amounts claimed for insurance and security were, as per the bill of quantities, based
on price, not cost which puts an end to claim C.
The claim against Mr Malebye
Claim D and its alternatives
[19] Claim D is based on the contract of employment of Mr Malebye with the DPW,
for the duration of his occupation of the position of Acting Director General of the
DPW. In general, it is averred that he was required to observe the utmost good faith
towards the DPW and in so doing to refrain from doing anything that might prejudice
or detract from the rights, assets or interests of the DPW. He is said to have been
bound to observ e all legislative provisions applicable to the position of Director -
General, including the provisions of the Public Finance Management Act 1 of 1999
(‘the PFMA’), with specific reference to subsections 38 to 42.
[20] In specific it is alleged that Mr Male bye by 12 October 2009 knew, or ought
reasonably to have known, that the cancellation fee was not owing, as Mvela
Phanda had not furnished the DPW with evidence substantiating any damage or loss
it may have suffered following the cancellation of the agreem ent by the DPW, as
required by clause 39.2.3. The DPW asserts that by approving the payment of the
cancellation fee by the DPW to Mvela Phanda, Mr Malebye acted wrongfully and
intentionally, or negligently by contravening section 38 of the PFMA, committing an
act of financial misconduct and/or permitting unauthorized, irregular, fruitless and
wasteful expenditure. The approval of the payment by Mr Malebye to Mvela Phanda
therefore constituted a contravention of section 38 of the PFMA and a breach of
Treasury Regulations 12.2.1(e) and 12.2.2 (National Treasury Regulations (March
2005)), read with section 76(1)(h) of the PFMA, in breach of his employment contract
with the DPW.
[21] The DPW concludes that Mr Malebye is therefore liable either in contract or i n
delict whether jointly or severally with Mvela Phanda, to make payment to the DPW
the sum of R33 726 705-90.
The defence of Mvela Phanda and Mr Malebye and replication by the DPW
[22] Mvela Phanda and Mr Malebye plead that an agreement was concluded, a t a
meeting in September or October 2009, to bypass the requirements of clause 39.2.3
of the contract. As a result of this agreement, and the subsequent payment
certificate incorporating the agreement, they plead that the cancellation fee was
lawfully approved and paid.
[23] The DPW replicates that the agreement between the DPW at instance of Mr
Malebye is invalid and of no force and effect, and that the resultant final payment
certificate is invalid and of no force and effect. The DPW pleads that Mr Malebye had
no authority to bypass clause 39.2.3 of the contract. In particular, the DPW pleads
that Mr Malebye was faced with a conflict of interest in dealing with Mvela Phanda
that Mr Malebye was faced with a conflict of interest in dealing with Mvela Phanda
and was thus legally incapable of concluding a settlement agreement with Mvela
Phanda, because of the commercial relationships between Mvela Phanda, Mpelo
Construction, and Messrs Moloisane and Malebye.
Synopsis of the evidence
[24] The evidence of the DPW is premised predominantly on an investigation by
the Special Investigative Unit (‘the SIU’) and rests primarily on the evidence of three
witnesses, Mr Marinus Giani (‘Mr Giani’), Ms Carin de Bruin (‘Ms de Bruin’) and Mr
Frans Johannes Potgieter (‘Mr Potgieter’).
[25] Mr Giani and Ms de Bruin were seconded to the SIU to investigate the
cancellation of the contract, and their investigation and observations are premised,
amongst others, on documents obtained from TransUnion ITC and bank statements
and invoices of the first, third and fourth defendants' respectively. Ms de Bruin is the
author of the SIU Interim Report. Mr Potgieter who was employed by the DPW as its
Director: Quantity Surveying Services and his evidence is premised on his
involvement, amongst others, in the issue of the determination of the cancellation fee.
[26] Mvela Phanda in defending the action actively participated in the trial until the
close of the case for the plaintiff. Following an appeal by the DPW against the
granting of absolution from the instance and the appeal to the Full Court being
upheld and the matter referred for further trial, Mvela Phanda absented itself from
the trial. In the absence of an appearance by Mvela Phanda, no evidence was
adduced on its behalf in defending the claim against it. Mr Malebye was the only
witness who testified in support of his defence of the action.
The evidence of the SIU investigators and commercial relationships of Mr
Malebye with roleplayers in the contract
[27] Mr Giani describes himself as a fraud investigator/forensic investigator. He
was seconded to the SIU from October 2010 to March 2012. The scope of his
investigation in a nutshell was “ to profile the individuals that took part in the meeting
that was held on 5 October 2009 to determine whether there was any undisclosed
interest.” He was instructed not to contact any of the said individuals during his
interest.” He was instructed not to contact any of the said individuals during his
investigation. In compliance with his specific mandate he relied, amongst others, on
the database of TransUnion ITC to compile a diagrammatic representation of links
between the aforesaid individuals (spider diagrams).
[28] Ms de Bruin, who was likewise seconded to the SIU, is the author of the
Interim Report of the SIU, a forensic accounting report, which forms the basis of the
claims in this matter. Ms de Bruin as with Mr Giani was instructed not to consult with
any of the individuals who attended the meeting of 5 October 2009. Ms de Bruin had
regard, amongst others, to the report of Mr Giani, and invoices and bank statements
of the Mvela Phanda, Mpelo Construction and Mr Moloisane defendants in drawing
inferences from payments made between links identified by Mr Giani.
[29] Mr Malebye does not dispute the correctness of the spider diagrams
demonstrating the links between entities in which he and family members and more
specifically Mr Moloisane, had an interest.
[30] The mand ate of Mr Giani and Ms De Bruin was nothing more than
establishing any corruption or fraud involved in the payment of the cancellation fee.
The overall picture emanating from their evidence together with the evidence of Mr
Malebye reveals the following. Mr Malebye was employed as Acting Chief Director:
Transportation of the North West Department of Transport and Roads (‘the North
West Department of Transport’) from 2004 until April 2005 when he was promoted in
May 2005 to Chief Director. He held this position until June 2007.
[31] Mr Malebye and Mr Moloisane are cousins and had a symbiotic business
relationship since 2006. Mr Moloisane was the sole member of Mpelo Construction.
Mr Malebye was the sole member of a close corporation, Malebye Business
Enterprises CC (‘Malebye Business’), which was registered on 22 November 2001.
Malebye Business traded in livestock and meat. Towards the middle of 2008,
Malebye Business purchased a filling station trading as Merli Motors. Merli Motors
falls under the Malebye B usiness umbrella. According to Mr Malebye he waited until
falls under the Malebye B usiness umbrella. According to Mr Malebye he waited until
July 2009 before he applied for a licence to trade. Merli Motors, however, having
been purchased as a going concern continued trading in 2008 with the previous
owner remaining to transfer skills to the new station manager.
[32] Mpelo Construction was party to successive service contracts with the North
West Department of Transport from November 2006 to November 2007, a fact which
Mr Malebye conceded he was aware of, but denies that he had a hand in the
approval of those agreements. He downplayed the fact that his cousin Mr Moloisane
was doing business with the Department of Transport of which he was the Chief
Director as pure coincidence. He, however, readily conceded that Mr Molisane and
himself were constantly on the lookou t for lucrative business opportunities between
2006 and 2010.
[33] Mr Malebye was appointed the COO of the DPW on 20 March 2008. Mr
Moloisane having been very successful in securing successive contracts under the
tenure of Mr Malebye at the North West D epartment of Transport enjoyed the same
level of success at the DPW where his cousin Mr Malebye was now the COO.
[34] In July 2008, Mpelo Construction to start with, was appointed by Mvela
Phanda as a domestic subcontractor for the Skilpadhek Residential project. The
following month, in August 2008, Mr Moloisane secured with the DPW, through
another one of his businesses, Mpelo Property Investments CC (‘Mpelo Property
Investments’) of which he was also the sole member, a very lucrative contract for the
procurement of a lease of property for nine (9) Cuban professionals. Mr Panaotis
Andrea Gerolemou (‘Mr Gerolemou’) the chairman and a director of Mvela Phanda,
who was part of the negotiations related to the cancellation agreement features in
this agreement.
[35] On 18 August 2008, Mr S Vukela, purporting to sign as the “ Acting” Chief
Operations Officer of the DPW, recommended that the Director General approve the
procurement of the lease of a house situated at 1 […] H[...] B[....] Street, Groenkloof
(‘1[…] H[...] B[....] ’) for the nine (9) Cuban professionals. Mr Malebye could not
furnish any cogent explanation why Mr Vukela would sign the recommendation as
furnish any cogent explanation why Mr Vukela would sign the recommendation as
aforesaid, when he, Mr Malebye was the COO, save to state that he may not have
been around that day. The offer to lease 1[…] H[...] B[....] was ultimately approved on
behalf of the Director General on 1 December 2008. The lease, which was to run
from 1 September 2008 to 31 August 2011, was concluded between the DPW and
Mpelo Property Investments at a starting rate of R22 971.00 per Cuban professional
per month. Mr Malebye, as with his tenure at the North West Department of
Transport, pleaded ignorance about this lucrative contract which his cousin Mr
Moloisane had secured with the DPW. He professed that whilst he knew Mr
Moloisane conducted business with government, he was unaware of his business
dealings with the DPW.
[36] The interest of Mr Gerolemou in 1[…] B[…] Street was discovered by Mr Giani
during his investigation. He discovered that ownership of 1 […] H[...] B[....] was
transferred before Mr Moloisane became involved. The property 1 […] B[…] Street
was registered in the name of an entity P Gerolemou Construction in 1994. In 2008,
the property was registered in the name of Mr Gerolemou, the chairman, and a
director, of Mvela Phanda. The property would in 2009 come to be registered in the
name of Flouspec Investments (Pty) Ltd, a company owned by Mr Moloisane.
[37] As pointed out by the DPW, it is extremely peculiar that when the DPW began
paying rent for the l ease of 1[…] H[...] B[....], the rental payments were made to one
of Mr Moloisane’s entities, while the property was owned by Mr Gerolemou. Again,
pleading ignorance, Mr Malebye testified that, even though he was COO of the DPW
at that time, he knew nothing about this agreement.
[38] Mr Malebye was appointed Acting Director General of the DPW on 2 April
2009. From 11 June 2009 to 7 July 2010, for some 13 months, Mpelo Construction
CC paid various amounts, totalling R1 264 361.60, to Mr Malebye, mostly throug h
Malebye Business. Mr Malebye claimed that Mpelo Construction purchased diesel
for its trucks from one of his businesses, Merli Motors. This he claimed was the
reason for these payments which were made from at least July 2009 to August 2010.
Invoices for these payments starting on 27 July 2019 and ending August 2010 were
discovered by Mr Malebye on the eve of the commencement of the trial. Whilst
purporting to be “Tax Invoices”, the documents fail to reflect VAT numbers for either
purporting to be “Tax Invoices”, the documents fail to reflect VAT numbers for either
Merli Motors or Mpelo Construction.
[39] Mr Malebye could provide no cogent explanation for the invoices save to
speculate that it was generated pursuant to a contract between Merli Motors and
Mpelo Construction for the supply of, inter alia , diesel by Merli Motors to Mpelo
Construction. No contract as alleged by Mr Malebye was discovered and none of the
invoices make any reference to purchase of diesel. Mr Malebye was also unable to
explain the nature balances brought forward from month to month by Merli Motors.
[40] On 04 Nov ember 2009, during his tenure as Acting Director General of the
DPW, Mr Malebye and Mr Moloisane became members of Ratsuapa Enterprises CC.
Ratsuapa Enterprises which had been in existence since 6 May 2004 was set up as
a startup to get family members into business. Mr Malebye’s eldest sister was a
member of Ratsuapa Enterprises since 2004; his wife Mrs Patience Boitshoko
Malebye and brother-in-law were registered as members on 4 November 2009. Mrs
Malebye and Mr Moloisane were also members of a business kn own as Baswiedi
Cleaners CC since 17 February 2009.
[41] Several commercial transactions were conducted between Mvela Phanda and
Mpelo Construction; and Malebye Business and Ratsuapa respectively. Messrs
Malebye and Moloisane have supplied the same addres s and contact numbers for
purposes of CIPC registrations at from time to time. Mvela Phanda paid Mpelo
Construction R12 357 201.41 as a subcontractor on the Skilpadhek Border Post
Residential Contract.
[42] Mr Malebye was under a duty to disclose, inter alia, his business dealings or
financial interests to the DPW. Mr Malebye, admittedly so, failed to disclose many of
these interests from time to time. He admitted that he did not any time disclose his
relationship with Mr Moloisane and Mpelo Contruction.
[43] On his failure to disclose in his Financial Disclosure Form (‘FDF’) of 19 May
2008 his interest in Merli Motors which dealt in fuel, he explained that since Merli
Motors had not been acquired at the time of his disclosure but only around mid-2008,
and started trading in 2009, he was only obliged to disclose this from 1 April 2009.
[44] In his FDF of 9 April 2009, however, Mr Malebye as in his 2008 disclosure
[44] In his FDF of 9 April 2009, however, Mr Malebye as in his 2008 disclosure
only disclosed his interest in Malebye Bu siness Enterprise which traded in meat and
livestock to the value of approximately R2 million, with no reference to Merli Motors.
In attempting to explain his failure to disclose his business interest in Merli Motor
which on his own version was only to be disclosed from 1 April 2009, he claimed that
he had made the disclosure “… because Merli Motors is a trading wing of Malebye
Business Enterprises and as a result it was disclosed on 09/04/2009 which is from 1
April 2009 – that disclosure was made in terms o f Malebye Business Enterprises as
the holding company .” He added that the petrol business was “ implied” in Malebye
Business Enterprises.
The contract of employment of Mr Malebye (Claim D)
[45] The crux of the claim of the DPW against Mr Malebye is his approval of the
payment of the cancellation fee to Mvela Phanda. The DPW asserts that Mr Malebye
acted in breach of his contract of employment and statutory duties, in circumstances
where he, as the Acting Director General of the DPW owed the DPW the utmos t
good faith and to act solely and exclusively in its best interests. The DPW further
asserts that Mr Malebye was responsible for the effective, efficient, economical and
transparent use of the resources of the DPW. To this end the DPW maintains that Mr
Malebye was required to act in accordance with the terms of the contract between
the DPW and Mvela Phanda and to avoid any conflict of interest in the exercise of
his duties.
[46] To elaborate on the pleaded case of Mr Malebye by which he is bound, the
high watermark thereof is that he did not breach his contract of employment. The
rationale for this defence being that the cancellation fee was agreed between the
DPW and Mvela Phanda and approved in the final payment certificate. As a further
defence, Mr Male bye raises the statutory plea of waiver, thereby disputing the
applicability of the statutory duties asserted by the DPW in its claim against him.
[47] The DPW replicated that the alleged settlement agreement is invalid and the
payment certificate which i s inextricably linked to the settlement agreement is
accordingly invalid.
The common law, Public Service Act and applicable Treasury Regulations and
The common law, Public Service Act and applicable Treasury Regulations and
provisions of the Public Finance Management Act 1 of 1999
[48] In terms of the common law of contract, M r Malebye as an employee of the
DPW was required in terms of his contract of employment to, inter alia, perform tasks
diligently, competently and efficiently; to comply with all lawful and reasonable
instructions given by the employer; to exercise reasonab le care and skill; and to
serve their employer honestly, faithfully and in good faith.
[49] Of these duties, the duty of good faith underscores the claim against Mr
Malebye. In Ganes v Telecom Namibia 2004 (3) SA 615 (SCA) at 626 E-F, para [25],
the SCA c onfirmed the principle that an employee may not “ place himself in a
position which gives rise to a conflict of interest as between himself and his
employer”.
[50] Mr Malebye stood in a fiduciary position in relation to access he had to, and
the power in r elation to the assets and affairs of the DPW. It was therefore
incumbent upon him to act in the best interest of the DPW in promoting its interests.
The SCA has expressed itself clearly on the principles applicable to persons who
occupy a position of trust towards another. In Phillips v Fieldstone Africa (Pty) Ltd
and another 2004 (3) SA 465 (SCA) at 478E – 482D, paras [29] – [34], the SCA
dealt with the principles governing the actions of a person who occupies a position of
trust towards another. At para 30, the position is stated as follows:
“Where one man stands to another in a position of confidence involving a duty
to protect the interests of that other , he is not allowed to make a secret profit
at the other’s expense or place himself in a position wh ere his interests
conflict with his duty . The principle underlies an extensive field of legal
relationship. … It prevents an agent from properly entering into any
transaction which would cause his interests and his duty to clash . … There is
only one way by which such transactions can be validated, and that is by the
free consent of the principal following upon a full disclosure by the
free consent of the principal following upon a full disclosure by the
agent. …Whether a fiduciary relationship is established will depend upon the
circumstances of each case . … But, so far as I am aware, it is nowhere laid
down that in these transactions there can be no fiduciary relationship to let in
the remedy without agency. And it seems hardly possible on principle to
confine the relationship to agency cases.”
[51] At para 31, the SCA makes it plain that the rule is a strict one which allows
little room for exceptions; it extends not only to actual conflicts of interest but also to
those which are a real sensible possibility; the defences open to a fiduciary who
breaches his trust are very l imited: only the free consent of the principal after full
disclosure will suffice.
[52] Aside from the common law, the statutory duties and obligations of Mr
Malebye as the Acting Director -General of the DPW, and by implication as the
Accounting Officer, derives from Part 2: section 38 to 42 of the Public Finance
Management Act 1 of 1999 (‘the PFMA’). These duties relevant to the matter at hand,
include, inter alia, ensuring that the department has and maintains effective, efficient
and transparent systems of financial and risk management and internal control; the
effective, efficient, economical and transparent use of the resources of the
department; and the management, including the safe -guarding and the maintenance
of the assets, and for the management of the liabilities, of the department.
[53] The Treasury Regulation 12.2 relied on by the DPW in its claim against Mr
Malebye, in relevant part, provides:
“12.2 Claims against the state t hrough acts or omissions [Section 76(1)(h) of
the PFMA]
12.2.1 An institution must accept liability for any loss or damage suffered by
another person, as for a claim against the state, which arose from an act or
omission of an official, provided –
(a) the act or omission was the cause of the loss, damage or reason for
the claim;
(b) …;
(c) the official acted in the course of his or her employment and was not
reckless, wilful or malicious;
(d) the official did not fail to comply with or ignore standing inst ructions, of
which he or she was aware of or could reasonably have been aware of, which
led to the loss, damage or reason for the claim, excluding damage arising
from the use of a state vehicle; and
(e) …
12.2.2 If in doubt, the accounting officer of the i nstitution must consult the
State Attorney on questions of law on the implementation of paragraph 12.2.1.
12.2.3 Except when an institution has accepted liability in terms of
paragraph 12.2.1, an amount paid by the institution for losses, damages
or claims arising from an act or omission of an official must be
recovered from the official concerned if the official is liable in law to
compensate the institution.
12.2.4 The State Attorney may only obligate the funds of an institution with the
prior written approval of the accounting officer.
12.3 Claims by the state against other persons
12.3.1 If the state suffers a loss or damage and the other person denies
liability, the accounting officer must, if deemed economical, refer the matter to
the State Attorney for legal action.”
(emphasis added)
[54] Mr Malebye basis his special plea of waiver, to absolve him from any liability
for the payment related to the cancellation of the contract, on Treasury regulation
12.7.3. He specifically pleads that the claim agai nst him as an official of the state,
must be waived by the state in terms of regulation 12.7.3 read with regulation 12.2.1.
He “ denies that any of the conditions in regulations 12.2.1 (a) to (g) were met .”
Regulation 12.7.3 provides that “ A claim against a n official must be waived if the
conditions in paragraph 12.2.1 (a) to (g) are not applicable.”
[55] The DPW pleads that the approval of the payment of the cancellation fee by
Mr Malebye constituted a breach of Treasury Regulations 12.2.1(d) and 12.2.1(e) ;
and that he acted recklessly or intentionally and made an admission that was
detrimental to the State without prior consultation with the State Attorney. The DPW
and Mr Malebye provide divergent submissions in this regard.
[56] The DPW only contesting r egulations 12.2.1 (d) and (e), asserts that Mr
Malebye bears the onus of proving that his approval of the payment of the
Malebye bears the onus of proving that his approval of the payment of the
cancellation fee, when it was neither due nor payable, was not reckless or intentional;
and the onus of proving that he did not make an admission that was detrimental to
the state without prior consultation with the State Attorney.
A comparative analysis of the evidence of Mr Potgieter and Mr Malebye
[57] It would be prudent to deal with a comparative analysis of the evidence by
juxtaposing the evidence of Mr Potgieter against that of Mr Malebye, on the common
cause and contentious issues.
[58] Mr Potgieter, a Quantity Surveyor by profession who had b een in the employ
of the DPW since 2003, confirmed that the contract giving rise to the eventual
cancellation fee, had to be cancelled to avoid “fruitless expenditure”. This fact was
common knowledge to all the officials of the DPW assigned in the financia l
delegations of the DPW; and the project management delegations assigned at the
time. He was not present at the meeting of 05 October 2009 where the decision was
reached determining the calculation to be utilised in determining the cancellation fee.
[59] Mr Potgieter testified that Mr Malebye was present at the meeting of 10
February 2009. Whilst the letter from Mvela Phanda refers to a Mr Molebe and not
Mr Malebye, cross examination of Mr Potgieter by counsel for Mr Malebye, placed
the reference to a Mr Molebe, as a mistake, beyond dispute. It was pertinently put to
Mr Potgieter, on instruction of Mr Malebye, that he recalls the meeting and whilst he
could not recall what transpired at the meeting, the letter recorded what occurred in
relation to the cancellation of the contract and the request for details of the damages
suffered by Mvela Phanda.
[60] In a strange twist of events, Mr Malebye, under cross examination, and
contrary to the version put to Mr Potgieter that he, Mr Malebye, was present at the
meeting of 10 February 2009, denied being present at the meeting. Mr Malebye
could advance no cogent reason why his counsel put to Mr Potgieter that he, Mr
Malebye, was in fact present at the meeting. Mr Malebye was also present in court
Malebye, was in fact present at the meeting. Mr Malebye was also present in court
when the version was put. Such version was never withdrawn and stands as a true
of reflection of the instruction to counsel from Mr Malebye. The evidence of Mr
Malebye contradicting this version, must be accepted as recent fabrication. The
belated denial by Mr Malebye evin ces a clear impression that he seeks to distance
himself from the meeting of 10 February 2009 where the pivotal issue of cancellation
of the agreement was first raised. This belated attempt by Mr Malebye to avoid any
connection to the cancellation of the a greement as his default response for the
period between at least 13 March 2009 and 5 October 2009, save for what
transpired on 5 October 2009, becomes more evident below.
[61] Under cross examination Mr Malebye conceded that it was correct that a
cancellation fee as recorded in the letter of Mr Morake directed to Mvela Phanda,
had to be determined in accordance with clause 39.2. Mr Malebye further conceded
that it was strange that the DPW would be requesting Mvela Phanda on 10 February
2009, to submit its “costs” of cancellation rather than substantiating its actual
damage or loss, since, on his version, he did not know at that date, that the contract
would be cancelled. This concession by Mr Malebye leads to the ineluctable
deduction that he, as early as 1 0 February 2009, had already contemplated the
payment of a “ cancellation cost ” to Mvela Phanda, rather than determining the
amount due in terms of clause 39.2.
[62] Mr Malebye sought to deny that Mr Mabuso on 19 February 2009, presented
a draft request for cancellation to him, in his capacity as Chief Operation Officer. This
proverbial second strike against Mr Malebye demonstrates his tenacity to shy away
from any involvement in the cancellation of the contract.
[63] With Mr Malebye from 13 March 2009 se eking to distance himself from any
involvement in the cancellation of the contract, until the meeting of 5 October 2009;
he persisted in his denial of being privy to any of the letters, emails, memoranda,
claims and any other documents for that matter, exc hanged between the DPW and
Mvela Phanda between 13 March 2009 and 5 October 2009. He also denied being
briefed during this period on any claims or issues related to the contract.
briefed during this period on any claims or issues related to the contract.
[64] The evidence of Mr Malebye in denying any involvement in the issue of t he
cancellation of the contract between 13 March 2009 and 5 October 2009 must be
considered against what transpired between 13 March 2009 and 5 October 2009. In
this context, despite the evidence of Mr Potgieter being heavily challenged at times,
there is nothing to gainsay the material aspects of his evidence which is borne out by
objective facts.
[65] Whilst the DPW decided not to call other witnesses involved in the
cancellation process, this is not fatal to its case as Mr Malebye argues. It is
indisputable that Mvela Phanda submitted what it terms its “ Provisional Contractual
Claim” in April 2009. Bearing in mind that the clause 39.2 required Mvela Phanda to
substantiate its claim for consideration by the DPW, it did nothing more than provide
a figure and record that it was for the DPW to determine the amount in terms of
clause 39.2.3. This prompted Mr Mabuso to seek the professional advice and
recommendation of Mr Potgieter as he was the lead quantity surveyor in the DPW
and highly respected for his expertise.
[66] Mr Potgieter obliged and provided a response on 7 May 2009 in which he
states the obvious; that the correspondence forwarded to the DPW by Mvela Phanda,
does not address the actual damage or loss suffered by Mvela Phanda and it is
therefore not possible to determine an amount due to Mvela Phanda, unless it were
to be accepted that there was no actual damage or loss suffered. To address this
impasse Mr Potgieter suggested a meeting with Mvela Phanda.
[67] As to what substantiation for its cl aim was sought from Mvela Phanda, Mr
Potgieter explained that it was very difficult to be specific since each contractor had
their own way of pricing and calculating their damages. It was for this reason that
clause 39.2 required of Mvela Phanda to provide evidence (proof) for the DPW to
consider. The duty was therefore on Mvela Phanda and not the DPW to substantiate
its alleged loss or damage. All that Mvela Phanda did was to disclose its profit on
other contracts and other sources of income from the previous financial year.
[68] A broad contention was put to Mr Potgieter that Mvela Phanda from a
commercial perspective suffered a loss because of the cancellation of the contract.
commercial perspective suffered a loss because of the cancellation of the contract.
Mr Potgieter disagreed. Mr Malebye confirmed Mr Potgieter’s contentions as co rrect.
In essence, Mr Potgieter testified that Mvela Phanda could have made a handsome
profit from the project, or they could have under -priced or made a mistake in their
pricing resulting in no profit being made at the end of the project. For these reasons,
he testified he needed to see the actual documentation of Mvela Phanda; and that
one cannot simply accept that a contractor will suffer a loss if a contract is cancelled.
[69] It appears on recommendation of Mr Potgieter that the DPW meet with Mvela
Phanda, that Mr Mavuso, on 12 May 2009 invited Mvela Phanda and other officials
of the DPW to an urgent m eeting on 13 May 2009. The recommendation of Mr
Potgieter for obvious reasons had to reach Mr Malebye. This is evident from the
recordal by Mr Mabuso, that on instruction of Mr Malebye, the matter had to be
resolved before the end of that week.
[70] In this regard, it was put to Mr Malebye under cross examination that he was
rushing the process, which he denied. He retorted that the matter was urgent since
the DPW “was incurring damages as a result of preliminaries which I have stated
already, and penaltie s as a result of the contractors standing on site not actually
implementing by the Department not to proceed ...”. Mr Malebye remained adamant
in his resolve that the DPW was incurring damages and penalties of between R3 and
R4 million at the time, despite being confronted with the contention that this was not
the case, post cancellation of the contract. When requested to consider the basis of
his insistence overnight, he returned to Court the following day, conceding that no
clause in the contract provided for the imposition of penalties and that his evidence
was therefore not correct.
[71] It is clear, following the recommendation and professional advice of Mr
Potgieter, that the DPW at the meeting of 13 May 2009 would insist on Mvela
Phanda and the priva te quantity surveyor Mr Brink to provide “ documents to
substantiate actual damages or loss suffered by the contractor if there is any, to
enable us to determine an amount due to the contractor.”
[72] Counsel for Mvela Phanda initially insisted that Mvela Phanda was not
present at the meeting of 13 May 2009, but was constrained to later apologise when
present at the meeting of 13 May 2009, but was constrained to later apologise when
it was clear from Mr Potgieter’s evidence that Messrs Gerolemou and Cave were
present. There is no evidence to gainsay the evidence of Mr Potgieter on what
transpired at the meeting. He testified that the third option envisaged by clause
39.2.3 which involved the question of loss of profit, was discussed at the meeting.
[73] There is no need for a detailed exposition of what was raised at the meeting.
The docu ments submitted by Mvela Phanda, and the fact that Mr Gerolamau at
some stage was angered and questioned what Mr Potgieter wanted by banging on
the table, was overtaken by Mvela Phanda ultimately submitting their revised claim in
terms of clause 39.2.3. Ti tled “ Contractual Claim ” same was forwarded by Mr
Mabuso to Mr Potgieter on 27 July 2009.
[74] Mr Potgieter was still not satisfied by the calculations, raising concerns about
the profit percentage relied on, which was not project specific, and the additi on of
substantial amounts to the construction revenue of Mvela Phanda which were not
related to the Skilpadhek project or any of the other construction projects of Mvela
Phanda in the year under review. He provided a detailed exposition of why he
questioned the correctness of the calculation, which stood unchallenged. To
exacerbate this, Mr Potgieter highlighted in his report of 29 July 2009 to Mr Mabuso,
that the auditors of Mvela Phanda had “ qualified their report stating that the pages
(40 to 42) which is the calculation of profit does not form part of the annual financial
statements and is presented as additional information. They have not audited the
information and [do] not express an opinion thereon.”
[75] Resultantly, Mr Potgieter recommended that Mvela Phanda be requested to
submit audited statements confirming the percentage claimed as loss of profit, on
which recommendation Mr Mabuso acted. As at the end of July 2009, it therefore
remains clear that the DPW insisted on strict compliance with cla use 39.2 and
specifically clause 39.2.3.
[76] Mr Potgieter’ was heavily criticised in cross examination for his view that the
auditors of Mvela Phanda had qualified their report. This attack was premised on the
auditors stating at some point in their repo rt that they are not qualifying their opinion.
auditors stating at some point in their repo rt that they are not qualifying their opinion.
The contention is, however, contradicted by the fact that the auditors pertinently
state in the same paragraph that they had not audited the information at pages 40 to
42 of the financial statements “ and accordingly do not express an opinion thereon .”
Further, they record at page 1 of the financial statements that: “ The following
supplementary information [at pages 40 – 42] does not form part of the annual
financial statements and is unaudited.”
[77] The clai med profit of 11.66% was therefore not without qualification and
exacerbated by the follow up letter from the auditors of 4 August 2009. In that letter
the auditors state “Because the above procedures do not constitute either an audit or
a review made in a ccordance with [international standards] (or relevant national
standards ...), we do not express any assurance on the calculation of net profit
percentage.”
[78] It is therefore unsurprising that Mr Potgieter was loath to accept the validity or
correctness of the claimed profit of 11.66%. Mr Potgieter added that even if the
11.66% figure was correct, it was insufficient as the audited statements needed to
demonstrate “ sufficient information ” from which “ to know the construction projects
that they were invo lved in, as well as the profits made on projects that they were
involved in up to that point in time. That could have been a good starting point to try
and finalise the actual loss for the specific contract in question.”
[79] As matters stood on 4 August 2009 with the “audited reports” and
supplementary letter from the auditors, and the view of Mr Potgieter that Mvela
Phanda had failed to satisfactorily produce any evidence of actual loss to the DPW;
Mr Potgieter met with Mr Mabuso and Mr Brink on 11 Augus t 2009, in endeavouring
to settle the matter. They met to discuss the approach to follow to determine the
amount that could be construed as damage or loss. Mr Brink, consequently, seeing
eye to eye with Mr Potgieter, sent a letter to Mr Mabuso on 11 August 2009 setting
out his calculations in terms of clauses 39.2.1, 39.2.2 and 39.2.3 of the contract. The
upshot is that Mr Brink calculated an amount of R20 415 627.04 in terms of clause
39.2.3, on an assumption that the 11.66% profit calculation by the audit ors could be
39.2.3, on an assumption that the 11.66% profit calculation by the audit ors could be
proved as actual loss, with the reservation that “ Even if one assume that the 11.66%
profit on turnover is realistic for all their work in the 2009 year, this percentage
cannot merely be applied to the total contract amount of this project.”
[80] Since neither Mr Brink nor Mr Potgieter accepted the 11.66% as loss of profit,
Mr Brink decided to draw a distinction between the work done in terms of the
contract by Mvela Phanda (determined by him at 45%) as against the work to be
done by its nominated subco ntractors (determined by him at 55%). Mr Potgieter
acquiesced in this approach by Mr Brink. The meeting of 11 August 2009, however
ended, with Mr Potgieter still insistent on his request for “ specific information to
determine the potential loss of profit a nd that it was up to the project manager [Mr
Mabuso] to obtain the relevant and additional information from the contractor.”
[81] That Mr Malebye was appraised of this meeting, despite his protestations of
not being involved between March and October 2009 is evident from the fact that Mr
Potgieter received a telephone call from Mr Malebye. According to Mr Potgieter, Mr
Malebye during tis call accused him of delaying the settlement of the claim. Mr
Malebye resultantly informed him that the matter would be t aken further with Mr
Mabuso who was seated in front of him. Mr Potgieter was subsequently excluded
from any further involvement in the determination of the cancellation amount.
[82] Mr Malebye instructed his counsel to put to Mr Potgieter when he testifie d in
2016 that he, Mr Malebye could not recall the said phone call and could not
comment on it. Memory being fickle, in evidence in 2023, Mr Malebye testified that
he in fact recalled the phone call and the circumstances giving rise to the call. Mr
Mabuso arrived at his office claiming that he could not find Mr Potgieter. With
specificity, Mr Malebye testified that Mr Mabuso informed him of his meeting with Mr
Potgieter and Mr Brink on 11 August 2019. Mr Malebye phoned Mr Potgieter and
indeed asked him wh at his problem was, confirming what Mr Potgieter had testified
but denying that he accused Mr Potgieter of delaying the settlement.
[83] Following Mr Mabuso’s meeting with Mr Malebye, and the effective exclusion
of Mr Potgieter from the matter, Mr Mabuso sent an email to Mr Cave of Mvela
Phanda on 24 August 2009. In this email he set out what was termed a “ Proposed
Phanda on 24 August 2009. In this email he set out what was termed a “ Proposed
Final Settlement by Employer in the amount of R20 415 627.04. This amount was
the amount calculated by Mr Brink which formed the subject matter of the meeting of
11 August 2009. The email was forwarded by Mr Cave to his fellow director, Mr
Joosub, with the message “ Please discuss with me ”. Mr Malebye as a default
response, disputes being aware of this settlement proposal sent by Mr Mabuso to Mr
Cave. He maintains that it was not discussed with him or authorised by him.
[84] The settlement proposal in all probability was not accepted by Mvela Phanda.
This much is clear from the fact that a facsimile was sent by Mr Mabuso to Mr Cave
of Mvela Phanda on 30 September 2009 headed “ Cancellation Settlement .” The
facsimile referenced an email sent to the DPW by Mr Cave on 29 September 2009,
which was not discovered. The circumstances giving rise to this cancellation
settlement in September 2009 is shrouded in uncertainty save for the fact that Mr
Mabuso in his facsimile recorded that the DPW had elected to apply clause 39.2.3 of
the contract, and that Mvela Phanda was requested to furnish the DPW with a tax
invoice in the amount of R27 761 273.48 (includi ng VAT) as “…. as approved by the
Acting Director General…” to enable the DPW to process payment.
[85] Mr Malebye vehemently denied approving the settlement amount of R27 761
273.48 or the sending of the facsimile by Mr Mabuso. He was at pains to explain why
Mr Mabuso recorded that he, Mr Malebye, had approved the settlement amount save
to suggest that Mr Mabuso had made a mistake. Mr Malebye denied the contention
that he had discussed the matter with Mr Cave and increased the settlement amount.
In the abse nce of a cogent explanation from Mr Malebye in the face of a document
which speaks for itself, it is unlikely that Mr Mabuso made a mistake in identifying
approval of the increased settlement amount at the instance of Mr Malebye.
[86] The clandestine sett lement proposal of 30 September 2009 clearly did not
come to fruition as a meeting was arranged between the DPW and Mvela Phanda for
5 October 2009. According to Mr Malebye he was invited to the meeting by Mr
Mabuso. The DPW was represented by Mr Malebye, Mr Molotsi and Mr Brink. Mvela
Phanda was represented by Mr Cave, Mr Gerolemou and Mr Aziz Joosub. Mr
Malebye could not explain why Mr Potgieter was not invited to the meeting and
testified that he could not remember if he asked Mr Mabuso to call Mr Potgie ter to
the meeting.
the meeting.
[87] Despite Mr Malebye earlier testifying that it was important that all in the
delegations line signed before him and that the Chief Director: Legal Services Mr Ka-
Mbonane was required to sign to ensure that the conduct of the DPW was “in line
with” the provisions of the contract, and that “ we are not doing anything unlawful in
terms of that kind of cancellation ”, Mr Ka -Mbonane and Ms Motsisi, the Chief
Financial Officer were not present at the meeting of 5 October 2009. Mr Malebye
claimed that he had not arranged the meeting and that “ Otherwise I could have
invited everybody who was actually in the line of signing the cancellation application
from the onset .”. Ironically Mr Malebye attended the meeting of 5 October 2009,
chaired the meeting which he did not call, and yet failed to raise the absence of
these officials.
[88] Mr Malebye went into the meeting of 5 October 2009, in the absence of the
expertise of Mr Potgieter, Mr Ka -Mbonane and Ms Motsisi. This in circumstances
where Mr Malebye on his persistent version was unaware of what transpired
between 13 March 2009 and 5 October 2009. Mr Malebye o his version went into the
meeting, not having been briefed and armed only with his memorandum for the
cancellation of the contract of 13 March 2009.
[89] Significantly, in evidence in chief Mr Malebye testified that he received
presentations in the meeting “ from the department as well as Mr Brink and Mvela
Phanda and in the proceedings there was a little bit of a misunderstanding or
disagreement and I asked the contractor which is Mvela Phanda to excuse us so that
we could have a departmental meeting”. The discussion in the departmental meeting
“is that we need to implement the contract conditions so that Mr Brink could come
with a figure in order to finalise the settlement that will be agreeable to … the
department as well as the contractor.”
[90] In cross examination Mr Malebye confirmed that he asked Mr Brink to explain
his figures for the respective settlement options and then gave Mv ela Phanda an
opportunity to respond to Mr Brink’s calculations. He recalled that Mvela Phanda
rejected Mr Brink’s calculation in terms of clause 39.2.3 and that they were “prepared
to resort to legal action”. Mvela Phanda’s delegates were asked to leave t he room to
to resort to legal action”. Mvela Phanda’s delegates were asked to leave t he room to
afford the DPW to caucus in private. Later in cross examination, Mr Malebye
disputed that he testified in chief that he received presentations from the DPW and
Mvela Phanda before he asked the contractor’s representatives to leave the room.
[91] At this point in his evidence, Mr Malebye testified that the meeting started with
everyone in attendance, and with Mr Brink making his presentation. Mr Brink did not
say what Mvela Phanda’s position was. When Mvela Phanda was asked to leave the
room, Mr Malebye did not know what Mvela Phanda’s position was. Mr Brink then
presented the facts and figures, after Mvela Phanda left the room, and informed Mr
Malebye for the first time that Mvela Phanda had rejected an offer.
[92] When confronted with the let ter of Mr Brink of 8 October 2009 regarding the
meeting of 5 October 2009, Mr Malebye took another about turn and sought to
dovetail his evidence on to the recordals of Mr Brink. Mr Malebye was invited to
comment on the recordals in Mr Brink’s letter.
[93] When asked to comment on the recordal that “ In conclusion to the
discussions that followed, Mr Malebye remarked that in the absence of a suitable
template for calculating 39.2.2 and 39.2.3, various interpretations are possible .”. Mr
Malebye testified th at he was concerned that the DPW and Mvela Phanda were
using different variables in coming to their figures and “ Given all the history of the
matter or whatever the case might be, these are the calculations; these are the basis
of the calculations. Hence in this particular meeting I referred the whole matter back
to Mr Brink and the team .” This is said to have taken place once Mvela Phanda was
requested to return to the room; and when he told the DPW and Mvela Phanda to
reach an agreement on what variable s they would use to calculate the amounts
referred to in the whole of clause 39.2.
[94] On Mr Brink’s recordal that “ He [Mr Malebye] was also doubtful whether the
quantity surveyor’s [Mr Brink’s] interpretation would stand up in court .”, Mr Malebye
confirmed the correctness of the statement but was unable to furnish a coherent
answer why Mr Brink’s interpretation would not stand up in court. Notably Mr
Malebye has no legal background or legal qualifications.
Malebye has no legal background or legal qualifications.
[95] Mr Malebye further confirmed the correctn ess of the recordal by Mr Brink that
he “Mr Malebye decided to give the contractor the benefit of the doubt as far as the
interpretation of 39.2.3 was concerned .” When pointed out to Mr Malebye that his
version differed from what Mr Brink recorded, he ende avoured to reconcile the two
versions by insisting that no agreement was reached at the meeting, once again
contradicting his pleaded case. The DPW correctly in my view submit that by
applying contorted argument, Mr Malebye was not prepared to admit the ob vious:
that by giving Mvela Phanda the benefit of the doubt, he had accepted Mvela
Phanda’s calculations on clause 39.2.3 and had rejected Mr Brink’s calculations.
[96] The proverbial nail in the coffin for Mr Malebye with his attempts at explaining
away his pleaded case, came when it was pointed out to him that Mr Brink recorded
that the option of clause 39.2.3 was no longer considered. This, as it was the highest
value of the three and that he Mr Malebye instead opted for the lesser of the options
envisaged in clauses 39.2.1 and 39.2.2, based on the quantity surveyor’s (Mr Brink’s)
calculations and with no additional interest payments. Mr Malebye in a turnabout
denied the correctness of these recordals and testified that he was “ absolutely
certain” that what Mr Brink had written is not correct.
[97] The persistent insistence by Mr Malebye that no agreement was reached at
the meeting of 5 October 2009 was dealt a death knell when it was pointed out to
him that Mr Brink concluded his letter by recording th at “The delegates from Mvela
Phanda then rejoined the meeting and the chairman [Mr Malebye] informed them of
the decision. They accepted the offer and agreed to forfeit any further claims for P &
G and interest. The quantity surveyors [Mr Brink] were instr ucted to process the final
payment which must include the final account and the settlement amount as agreed.”
Again, confronted with the obvious, Mr Malebye disputed what Mr Brink had written
and insisted that the parties were to go back “and find each other so that we have an
agreed figure and come back with a proper submission or a motivation.”
[98] Mr Malebye denied that he instructed Mr Brink to process the final payment
with the figure as agreed. According to Mr Malebye, Mr Mabuso and his team went
with the figure as agreed. According to Mr Malebye, Mr Mabuso and his team went
back with Mr Brink, consulted the team from Mvela Phanda and reached an
agreement without his involvement, and brought the agreement to him.
[99] When the Court pointed out the anomalies in his evidence to Mr Malebye, he
persisted in his version t hat no agreement was reached at the meeting of 5 October
2009 and contended that paragraphs 6.5 and 6.6 of his plea do not reflect the correct
position. When afforded an opportunity to reflect on his evidence overnight, Mr
Malebye returned to Court the fol lowing day and insisted that no agreement was
reached at the meeting of 5 October 2009. He also maintained that his pleaded case
similarly stood and did not contradict his evidence.
[100] After much cross examination by Adv Burger SC , Mr Malebye finally
conceded that he had provided different versions on what was agreed at the meeting
of 5 October 2009; and confirmed that an agreement was reached on the
cancellation fee at the meeting of 5 October 2009.
The statutory plea of waiver
[101] The statutory p lea of waiver (special plea) raised by Mr Malebye must be
considered against the backdrop of the evidence as aforesaid. Since Mr Malebye
has raised a special plea of waiver, and bears the onus of proving same, it is apt to
consider what evidence if any Mr Malebye adduced in this regard, and the argument
advanced on his behalf.
[102] Adv Phukubje for Malebye advances the following argument on behalf of Mr
Malebye on the special plea of waiver. In what he refers to as the second hurdle
(Regulation 12.2.2(e)), he submits that unless the DPW shows that the damages it
suffered arose as a result of the circumstances contemplated in regulation 12.2.1(e),
then, any claim against Mr Malebye (assuming it existed) is automatically waived in
terms of the provisions of regulation 12.7.3.
[103] Adv Phukubje contends that the determination w hether the condition in
Regulation 12.2.2(e) applied to the circumstances of the claim against Mr Malebye
depends on an interpretation of the Treasury Regulations. Relying on the unreported
judgment in Minister of Safety and Security v Gardner (CA 250/2008 ) [2009]
ZAECGHC 38 (2 July 2009) at para [10] he maintains that it on the plain meaning of
its wording, the Regulations in question do not give a remedy or create a debt where
there was none before. The Regulations he contends do not prescribe requirement s
there was none before. The Regulations he contends do not prescribe requirement s
for a cause of action which were not required before. The wording and content of the
Regulations he further contends lays down the procedure for recovering loss or
damage or damages in respect of which there is already a complete cause of action.
[104] No issue is taken by Mr Malebye with the two delegations of power in terms of
the PFMA are common cause between the plaintiff and the second defendant. With
reference to the Financial Delegations and Project Management Delegations, Adv
Phukubje contends that the DPW’s reliance on the provisions of regulations 12.2.1
and 12.2.2 in the circumstances is clearly without merit in that the evidence
presented to Court showed that when the decision was taken to terminate the
contract, the DPW was made fully cognisa nt of the financial repercussions in the
order of R30 million and which would amount to fruitless and wasteful expenditure;
the decision to terminate was signed off by all the relevant officials in the department
including the then Director -General, as w ell as the Director: Legal Services; and
there can be no suggestion that the Financial Delegations and/or Project
Management Delegations require any input from the State Attorney and/or the
Director: Legal Services in respect of the approval of the final payment.
[105] In my view, the submissions that Mr Giani and Ms De Bruin gave no evidence
relevant to the second main issue or that Mr Potgieter’s evidence was not tendered
in respect of the issues arising from regulation 12, does nothing to advance the ca se
for Mr Malebye on whom the onus rests for his special plea of waiver. It is what Mr
Malebye tenders as evidence on this score that this Court must consider.
[106] What relevant evidence did Mr Malebye tender in support of his special plea
of waiver? The simple answer is none. Tangentially, the case for Mr Malebye on his
special plea of waiver is predicated on legal argument predicated on an
interpretation of the contentious Treasury Regulations. The argument of Regulations
12.2.1 read with 12.7.3 was ad vanced as follows. In terms of Regulation 12.1.1 the
12.2.1 read with 12.7.3 was ad vanced as follows. In terms of Regulation 12.1.1 the
State is its own insurer; and in terms of regulation 12.7.3 the State’s employee is
entitled to the benefit of that cover, unless it is forfeited because one of the
conditions in regulation 12.2.1(a) - (g) is applicable.
[107] Mr Malebye would forfeit his cover in terms of Regulation 12.7.3 if, in the
circumstances pleaded by the DPW plaintiff, the following requirements are met. The
DPW suffered “losses or damages”; the losses or damages must be as a result of (or
caused by) Mr Malebye; Mr Malebye is liable in law for the losses or damages; and
he “without prior consultation with the State Attorney, made an admission that was
detrimental to the State”.
[108] Adv Phukubje maintains that although regula tion 12.7.3 only refers to
“paragraph 12.2.1(a) to (g)”, it cannot sensibly be interpreted to exclude the wording
in regulation 12.2.2.; and accordingly, the “admission” referred to in 12.2.1(e) must
be interpreted to mean an admission made by the official (Mr Malebye) himself; the
admission must be made to a third party (who has raised a claim against the State
for damages or loss suffered by that third party); it must be made in respect of the
claim against the state by a third party for damages or loss c aused by the official;
and it must be a matter in respect of which the State Attorney has the power to deal
with.
[109] Adv Phukubje resultantly submits that even if one were to assume that Mr
Malebye made an admission (of which no evidence was tendered), the “admission”
was not in respect of losses or damages suffered as a result of any conduct or
omission on the part of Mr Malebye - the termination of the contract between the
DPW and Mvela Phanda was not caused by any conduct on the part of Mr Malebye.
[110] As to the claim under Regulation 12.2.1, Adv Phukubje submits that the
admission must be in respect of a “claim” raised by a third party against the state.
The “claim” he contends does not include claims made under a construction contract
which the S tate Attorney is not responsible to administer; and would mean that any
contractual mechanisms regulating claims must be ignored, thereby
circumventing the provisions of the contract itself, which requires that the parties to
the JBCC contract must deal with the claims raised thereunder themselves. This he
submits puts paid to the DPW’s reliance on regulation 12.2.1(e).
submits puts paid to the DPW’s reliance on regulation 12.2.1(e).
[111] Adv Phukubje further contends that Regulation 12.2.1(e) has no relation to
claims in respect of “ unauthorised, irregular or fruitless and wasteful expenditure .”
And although regulation 9.1.4 provides that the recovery of losses or damages
resulting from unauthorised, irregular or fruitless and wasteful expenditure must be
dealt with in accordance with regulation 12, not all the provisions of regulation 12 can
apply to a claim to recover such losses or damages.
[112] As to consultation with the State Attorney before settling the claim of Mvela
Phanda, Adv Phukubje submits that the relevant regulations are not capable of such
an interpretation and no evidence was tendered that it is the law or practice or
custom f or attorneys to be part of discussions in regard to claims raised by a
contractor during the course of a construction contract.
[113] As to the “admission” made by Mr Malebye to the DPW, that “ the admission,
that the cancellation fee was owing, was made b y the second defendant to the first
defendant and to the plaintiff on or before 12 October 2009”, it is contended that the
cancellation fee was automatically payable by the DPW in terms of the provisions of
the contract (i.e. ex contractu) and Mr Malebye d id not make any admission that the
cancellation fee was payable.
[114] Adv Berger SC for the DPW in relation to the special plea contends that Mr
Malebye acted recklessly and intentionally in circumstances where he knew that
clause 39.2 of the contract applied to the claim of Mvela Phanda; and that each of
the three sub -clauses of 39.2 had to be determined. Failing the exercise envisaged
by clause 39.2 Mvela Phanda would not be entitled to be paid any cancellation fee
whatsoever. The contention is furthe r that Mr Malebye knew that the DPW could not
determine an amount in terms of clause 39.2.3. and therefore, intentionally decided
to bypass clause 39.2.3 and opt for a calculation in terms of clause 39.2.2. Clause
39.2.3 is said to have been left out deliberately so that Mvela Phanda could be paid.
[115] The fact Mr Malebye insisted that he had nothing to do with the contract after
13 March 2009, until the meeting of 5 October 2009; and had not appraised himself
of developments in the matter, rendered his conduct at the meeting reckless as to
of developments in the matter, rendered his conduct at the meeting reckless as to
the legal consequences of his actions. This is said to have culminated in a deliberate
intent to ensure that Mvela Phanda was paid a cancellation fee, whether or not it had
submitted evidence substantiating its actual damage or loss as a result of the
cancellation.
[116] The undisclosed conflict of interests by Mr Malebye so the argument goes
exacerbates the matter. His lack of knowledge as to what had transpired between
DPW and Mvela Phanda, Mr Malebye also went into the meeting of 5 October 2009
without the expert assistance of Mr Potgieter, Mr Ka -Mbonane and Ms Motsisi. This
too it is argued was reckless as he had no idea what evidence, if any, Mvela Phanda
had submitted to substantiate its actual damage or loss, n or whether Mvela Phanda
had substantiated its actual damage or loss, nor what legal options were available to
Mvela Phanda if DPW could not determine Mvela Phanda’s actual damage or loss.
[117] By excluding Mr Potgieter from the meeting of 5 October 2009, Mr Malebye is
said to have acted intentionally. Further that the exclusion of the Chief Director:
Legal Service and/or the Chief Financial Officer was done deliberately to manipulate
and control the meeting to reach a settlement with Mvela Phanda, reckles s as to
whether his conduct was lawful and/or in the best interests of the DPW. Despite his
trust in Mr Brink, Mr Malebye by stating that Mr Brink’s calculations would not stand
up in court, without legal opinion acted recklessly.
[118] The argument is fu rther that, in offering Mvela Phanda a cancellation fee
calculated according to the formula in clause 39.2.2, Mr Malebye, without prior
consultation with the State Attorney, made an admission that was detrimental to the
state, i.e. that the cancellation fee was due and payable to Mvela Phanda.
[119] The DPW submits that, in approving the payment of the cancellation fee, Mr
Malebye failed to declare his conflict of interest, and failed to act in accordance with
clause 39.2 of the contract, and in the best i nterests of the plaintiff. His conduct was
deliberate and reckless, ensuring that Mvela Phanda was paid the cancellation fee,
despite his knowledge that clause 39.2.3 of the contract had not been complied with
and that no cancellation fee was payable.
and that no cancellation fee was payable.
[120] The DPW therefore submits in this Court that Treasury regulations 12.2.1 (d)
and (e) have been met, i.e. they are applicable within the meaning of regulation
12.7.3; and that Mr Malebye has forfeited protection under regulation 12.7.3, read
with regulation 12.2.1. and his special plea of waiver must fail.
[121] To my mind the issue in the special plea of waiver, viewed from the
perspective of the claim of the DPW, has nothing to do with the cancellation of the
contract. It has everything to do with the approval of the payment of the cancellation
fee and the circumstances giving rise thereto.
[122] In this regard Mr Malebye indeed acted recklessly when approving a payment
outside the terms of clause 39.2, in circumstances where evidence demonstrates
overwhelmingly that he was heavily conflicted and should have recused himself from
any discussions relevant to the cancellation fee. I am persuaded by the argument of
the DPW that the special plea of waiver raised by Mr Malebye must fail.
[123] The remaining question is whether the DPW has overcome the hurdle of its
onus to prove that Mr Malebye breached his contract of employment.
Discussion
Claim A
[124] There was no basis for Mr Malebye and Mvela Phanda to circumvent clause
39.2.3 of the contract. Clause 39.2 is clear that no other amounts can be paid in the
event of cancellation of the contract, other than as determined in accordance with
Clause 39.2. The settlement agreement of 5 October 2009 is in direct violation of
clause 39.2. There was no other basis for determining the cancellation fee other than
clause 39.2. If any doubt existed in this regard, Mr Malebye who on his version went
into the meeting of 5 October 2009 without an inkling of what had transpired since
February 2009, h e was undoubtedly under an obligation to call on those who knew.
On circumventing clause 39.2 with the settlement with Mvela Phanda, outside of
clause 39.2, legal advice should have been sought.
[125] The onus in a claim based on the condictio indebite is trite. In Recsey v
Reiche 1927 AD 554 at 556, the court held that the onus in an action based on the
condictio indebite “lies throughout the whole case” on the DPW. The DPW bears the
onus of proving every element of the claim and included in this is the e xcusability of
onus of proving every element of the claim and included in this is the e xcusability of
the error. In Mabaso v Felix 1981 (3) SA 865 (A) at 872H, the court stated that
“considerations of policy, practice and fairness inter partes largely determine the
incidence of the onus of proof in civil cases, and I can conceive of nothing unfair in
and of no consideration of policy or practice militating against, expecting of a plaintiff
who alleges that he paid an amount of money in mistake of law, to prove sufficient
facts to justify a finding that his error is excusable.” It is only once a payment in
debite has been proved, that the defendant has the onus of proving that he was not
enriched by the payment.
[126] “No person” is to be enriched at the expense of another; that is the thrust of a
claim for unjustified enrichment - Grotius 3.30.1.3. In ABSA Bank v Leech 2001 (4)
SA 132 (SCA) paragraph 18, the court reiterated that the payment had to be made in
error when in fact it was not owing. Beck's Theory and Principles of Pleading in Civil
Actions, page 256, sets out the general require ments of the condictio indebite: 1. the
defendant must be enriched; 2. the plaintiff must be impoverished; 3. the defendant’s
enrichment must be at the expense of the plaintiff; and 4. the enrichment must
be ....cause (sine causa) i.e. unjustified.
[127] In Iscor Pension Fund v Jerling 1978 (3) SA 858 (T) at 861 E, the court in
expounding on the elements of unjustified enrichment found that the mistaken belief
must have been reasonable; and in Willis Faber v Enthoven v Receiver of Revenue
[1991] ZASCA 163; 1992 (4) SA 202 (A) at 220i the court found that there must have
been no legal natural or moral obligation to have made the payment.
[128] As pleaded by the DPW in its cause of action on Claim A, based on the
condictio indebiti, there was no legal basis for the payment of the cancellation fee to
Mvela Phanda, since clause 39.2 of the contract had not been complied with. Mvela
Phanda was therefore enriched and the DPW impoverished at the expense of the
DPW, and the payment was therefore made sine causa, or indebite.
Claim D
DPW, and the payment was therefore made sine causa, or indebite.
Claim D
[129] The trite position in our law is that the evidence adduced by Mr Malebye must
speak to his pleaded case. As a reminder, Mvela Phanda and Mr Malebye pleaded
that an agreement was concluded, at a meeting in September or October 20 09, to
bypass the requirements of clause 39.2.3 of the contract; and as a result of this
alleged agreement, and the subsequent payment certificate incorporating the
agreement, the cancellation fee was lawfully approved and paid. From his evidence
in chief Mr Malebye made it clear that no agreement was reached at the meeting of 5
October 2009. This indeed as submitted by the DPW, constitutes a fundamental
contradiction of Mr Malebye’s pleaded defence.
[130] The anomalies and contradictions in the evidence of Mr Malebye, his poor
performance as an unreliable witness evident from his tendered evidence, gravely
impacts his credibility. No reliance can be placed on any part of the contradictory
evidence of Mr Malebye. Mr Malebye failed to inspire any confidenc e in his evidence
which was clearly fabricated to divert attention from the inescapable fact that he
ultimately decided to circumvent the contract by unilaterally deciding that clause
39.2.3 should not be considered.
[131] I cannot agree with the contentions on behalf of Mr Malebye that the claims of
the DPW against Mr Malebye should fail on the evidence of the DPW. The Full Court
in the appeal against the granting of absolution at the close of the case for the DPW
in relation to the meeting of 5 October 2009, opined at para 34 of its judgment, that:
“……partial yet crucial facts of that meeting leading to the impugned
agreement were placed before the trial court through the introduction of the
memorandum of that meetin g. Even if it were not so, the mere realinace by
the first and second defendants on the agreement reached in that meeting
places on them the burden to give evidence thereof. Considering the terms of
clause 39.2 and the evidence of Potgieter, all that remai ned curious from the
meeting of 5 October 2009 was an explanation or justification for the
contravening decision, if any lawful one existed. Only the defendants,
particularly the second defendant, not the plaintiff, is obliged to give the
relevant evidence.”
relevant evidence.”
(emphasis added)
[132] Mr Malebye was under a duty to ensure strict compliance with clause 39.2 of
the contract. Neither Mr Malebye; or Mvela Phanda despite its protestations to Mr
Potgieter on what he wanted from Mvela Phanda, could circumvent clau se 39.2. Mr
Malebye, as early as 10 February 2009 and 13 March 2009 in specific, was clearly
acutely aware of what was required in terms of clause 39.2. Mvela Phanda was
required to furnish the DPW with evidence substantiating its actual damage or loss
as a result of the cancellation of the contract. Nothing else would suffice.
[133] With Mr Malebye on his contradictory version, being unaware of what
transpired between 13 March 2009 and 5 October 2009, would have been oblivious
to the evidence purportedly provided by Mvela Phanda in support of clause 39.2. He
was, however, as the evidence demonstrates contrary to his plea of ignorance,
aware at least on 11 August 2009 of the impasse between the DPW and Mvela
Phanda and Mr Potgieter’s stance. After all, there is no other reasonable explanation
why Mr Potgieter was henceforth excluded from dealing with the matter of the
cancellation fee. Mr Malebye therefore in August 2009 was aware of the problem
with Mvela Phanda and the calculation of the cancellation fee. Equally so, he had to
be aware of Mr Brink’s proposed calculations in which Mr Potgieter notwithstanding
his reservations, acquiesced.
[134] Mr Malebye entered a meeting without officials from the DPW, who are
strategic in the Financial Delegations. His excuse, poor as it was, is that he did not
call the meeting and if he did, they would be present. I re -iterate that nothing
precluded him from calling for their attendance at the meeting. With knowledge a
foresight of the stance of Mr Potgieter who was hig hly regarded as the expert of the
DPW in matters of this nature, he failed to call on him either. Notwithstanding Mr
Malebye’s materially contradictory evidence on the meeting of 5 October 2009, it is
clear that he rejected the analysis and calculation in terms of clause 39.2.3 of Mr
Brink. This was figure in which Mr Potgieter acquiesced. He then unilaterally decided,
Brink. This was figure in which Mr Potgieter acquiesced. He then unilaterally decided,
without attempting to understand Mr Brink’s reasoning, to reject Mr Brink’s input
because Mvela Phanda rejected it.
[135] Mr Malebye instea d allowed settlement on an amount outside of the strict
terms of clause 39.2 simply because Mvela Phanda threatened legal action. So
much more reason why Mr Malebye was at liberty as the accounting officer of the
DPW, to call on the Chief Director: Legal S ervices or the State Attorney for an
opinion. The upshot of this decision by Mr Malebye is that no amount was payable to
Mvela Phanda. The arbitrary amount of R33 726 705.90 (including VAT) was not
justified.
[136] Despite Mr Malebye pleading ignorance on the contractual relationships with
Government of his cousin Mr Moloisaine, evidence demonstrates that his own
business dealings with Mr Moloisane and his familial relationship with him, makes a
mockery of his plea of ignorance. As made plain at para 31 of the SCA judgment in
Phillips v Fieldstone Africa (Pty) Ltd and another the rule is a strict one which allows
little room for exceptions; it extends not only to actual conflicts of interest but also to
those which are a real sensible possibility; the def ences open to a fiduciary who
breaches his trust are very limited: only the free consent of the principal after full
disclosure will suffice.
[137] Mr Malebye undoubtedly from the evidence was acutely aware that Mpelo
Construction CC was contractually con nected to Mvela Phanda. Mr Malebye
dismally failed to explain his failure to make very relevant disclosures which tied him
to Mpelo Construction. Despite his late discovery of purported “Tax Invoices” to
explain sums of money paid by Mpelo Construction to Merli Motors which was
owned by himself, he fell on his own sword with these documents.
[138] That there was actual conflict of interest on the part of Mr Malebye is evidently
clear from the evidence. Even on his own version, a real sense possibility is e vident.
In breaching his trust with the DPW his employer, the defences available to Mr
Malebye are limited. As the SCA made it plain, only the free consent of the principal
will suffice. It is unsurprising therefore that the defence raised not only by Mvel a
Phanda but also Mr Malebye is a very limited defence claiming an agreement
reached to settle the matter. Mr Malebye adds a rider to his defence by raining a
special plea of waiver.
special plea of waiver.
[139] Mr Malebye was clearly conflicted, which precluded him from being involved
in any aspect of determining the cancellation fee. With the agreement between
Mvela Phanda and the DPW at the instance of Mr Malebye having been reached
outside of clause 39.2, such agreement was invalid and of no force and effect. There
is simply no room for leeway in this regard. Notwithstanding, Mr Malebye instructing
Mr Brink to prepare the final payment certificate, with the addition of the words “as
agreed”, the final payment certificate itself, which in ordinary parlance is unassailable
unless set aside, this is of no moment in the context of the evidence in this matter
and is by no means legally binding on the DPW. The final payment certificate was
invalid.
[140] Mr Malebye through his breach of clause 39.2 failed to act in the best
interests of the DPW and therefore failed to observe the utmost good faith towards
the DPW, all to its prejudice.
[141] The matter is further exacerbated by a memorandum sent by M r Mabuso to
Mr Malebye seeking approval of the final payment to Mvela Phanda and in which he
records that the payment is following “consultation with the Contractor, Departmental
Quantity Surveyor and Private Quantity Surveyor we recommend the implementati on
of clause 39.2.3 as stipulated above. This option is found to be Economical for the
Department.” As the evidence reveals, however, the inputs and calculations of Mr
Brink (the private quantity surveyor) were not considered at the meeting of 5 October
2009 and Mr Potgieter (the quantity surveyor of the DPW) was not present at that
meeting. Even more curious, is that Mr Mabuso added that “ as the Employer we
engaged the contractor to address their concerns about sub -clause 39.2.3 as we
proposed, we resolved to apply sub -clause 39.2.2 to avoid unnecessary
litigations …”.
Conclusion
[142] Claims A and D as formulated against Mvela Phanda and Mr Malebye by the
DPW, must accordingly succeed. Neither Mvela Phanda nor Mr Malebye were at
liberty to conclude an a greement outside the parameters of clause 39.2. The
defence raised by Mvela Phanda and Mr Malebye predicated on this agreement is
accordingly rejected.
[143] Mvela Phanda failed to provide evidence or proof of actual loss as required by
clause 39.2.
[144] Mr Malebye in concluding the agreement, being heavily conflicted as the
evidence demonstrates, undoubtedly breached his contract of employment with the
DPW.
[145] Mvela Phanda and Mr Malebye are accordingly liable to compensate the
DPW for the damages i t suffered as result of the payment of the amount of R33 726
705.90.
Costs
[146] Costs follow the result. Mvela Phanda and Mr Malebye are accordingly liable
for the plaintiff’s costs in the prosecution of the action, which costs are to include the
costs of two counsel, where so employed.
Order
[147] In the result, it is ordered that:
1. The first and second defendant, are liable for payment of the sum of
R33 726 705.90 plus interest at the prescribed rate of interest, from 11
October 2012 (date of se rvice of summons) to date of payment, jointly and
severally, the one paying, the other to be absolved.
2. The first and second defendant shall pay the costs of suit, which costs
shall include the costs of two counsel, where so employed.
AH PETERSEN
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
Appearances
For the Plaintiff : Adv D Berger SC
Instructed by : Haffejee, Roskam Savage Attorneys
For the First Defendant : No appearance at Defendant’s Case
For the Second Defendant : Adv M Phukubje
Instructed by : JV van Rensburg Kinsella Attorneys