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[2012] ZAWCHC 276
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Millenium Waste Management (Pty) Ltd v Environmental Cleansing Solid (Pty) Ltd (9582/2008) [2012] ZAWCHC 276 (15 June 2012)
IN THE HIGH COURT OF SOUTH
AFRICA
(WESTERN CAPE HIGH COURT, CAPE
TOWN)
CASE NO. 9582/2008
Iii the matter between:
MILLENIUM WASTE MANAGEMENT
(PTY) LTD
.....................................................
PLAINTIFF
And
ENVIROMENTAL CLEANSING SOLID
(PTY) LTD
.................................................
DEFENDANT
JUDGMENT DELIVERED ON FRIDAY
15 JUNE 2012
DLODLO,
J
INTRODUCTION
[1]
The Plaintiff claims judgment against the Defendant for payment of
the sum of R204 495.48, together with interest thereon at
the rate of
15.5% per annum with effect from the 1
st
of June 2007 to date of payment and costs. The Plaintiffs claim is
based on an agreement concluded between the Plaintiff and the
Defendant in terms whereof the Plaintiff rendered services to the
Defendant by providing two compactors to the Defendant in terms
of an
agreement. The Defendant has admitted the Plaintiffs claim in its
entirety and prayed that the amount of the Plaintiffs claim
be set
off against the Defendant’s counterclaim, alternatively that
the adjudication of the Plaintiffs claim be stayed until
the
Defendant's counterclaim has been adjudicated upon.
[2] The Defendant’s
counterclaim is based on an alleged agreement in terms whereof the
Defendant claims payment from the Plaintiff
in the amount of R8265
51.82, the Defendant alleging that the Defendant supplied refuse
removal and disposal services in the informal
settlements of Hout Bay
and Hangberg on the Plaintiffs behalf (luring the period June 2006 to
January 2007. The Plaintiff has denied
the existence of the alleged
agreement and denied that the Defendant did the alleged .work in Hout
Bay and Hangberg. The Plaintiff
pleaded in the alternative that the
Defendant is estopped from proving that it is entitled to payment.
EVIDENCE ADDUCED
[3]
MR BONGANI MBINDWANE, the Managing Director of the
Defendant company,
testified that the
Defendant tendered to remove waste from the informal settlements. The
tender was . an open tender in that it
was awarded not only to the
Defendant but also to the Plaintiff company and others. The bidding
was for standard and additional
removals. Additional removals for
schedules 1, 2, 3 and 4 were awarded to the Plaintiff company. The
requirements were tax clearance
certificate, sufficient tools, not
declared delinquent contractor and the company must be registered
with Trade world. When Mr
Mbindwane was asked about Hans Gottschalk,
he answered that he was of German descent and worked for Solid as
Operations Manager.
He also testified about Environmental Cleansing
ECL (Pty) Ltd and he testified that this entity was confusing in that
documents
also indicated that it was a CC (meaning a Close
Corporation). Hans Gottschalk was employed full time as Operations
Manager whilst
Mr Mbindwane was office bound in that he was busy with
personnel allocations to sites, truck maintenance and logistics. Mr
Mbindwane
for the Defendant company, Mr Marius Conradie for the
Plaintiff company were summoned for a discussion by Mr Truter of the
City
of Cape Town. The purpose of the meeting was to discuss
logistics and mobilizing. It was discussed,
inter
alia
, how the shipping containers
would be managed, the roll out timing and capacity of the two
companies. Importantly, the contract
entailed the collection of waste
from the containers and to dump it accordingly. Mr Truter of the City
wanted assurances that the
tender would go smoothly. In that meeting,
according to Mr Mbindwane, Marius Conradie of the Plaintiff company
indicated that the
latter did not have the correct trucks to drive
between shacks - their trucks were too large. That resulted in .the
tender being
amended. This had both positive and negative,
consequences, It was ^agreed that, seeing that Solid was already at a
particular:
area and. was best positioned to pick up any additional
waste, it had to-do so. The City approved additional pickups to be
done
by Solid although the contract was awarded to the Plaintiff
company. It was agreed that the Plaintiff company would invoice the
City for the waste that was picked up by Solid and reimburse Solid.
Asked who would Solid invoice, Mr Mbindwane explained that
Solid
would invoice Millenium and the latter would collect money from the
City of Cape Town and reimburse Solid for the work done.
He added
that minutes evidencing this agreement were unavailable because the
computer crashed. In terms of the agreement Marius
Conradie of
Millenium and Hans Gottschalk of Solid would liaise in respect of
additional pickups but the approval by the City Council
was core to
all this. Payment would have had to be signed off which will only be
effected if the correct parties completed their
individual contracts.
[4] The same Hans
Gottschalk who was the Operations Manager at. Solid was also involved
in Environmental Cleansing SA, according
to Mr Mbindwane. He
testified that Environmental Cleansing SA had closed down as a
company and was not registered with Tradeworld.
He acknowledged,
however, that Environmental Cleansing SA submitted invoices to
Millenium and the latter paid the former and not
Solid. Mr Mbindwane
became aware of this when he was telephoned by Millenium Johannesburg
branch. The accounts lady wanted VAT
for invoices already paid.
Subsequently Mr Mbindwane was sent a statement indicating the work
invoiced and payment made to Environmental
Cleansing SA (Pty) Ltd.
According to Mr Mbindwane, Environmental Cleansing SA (Pty) Ltd had
no employees and that if Hans Gottschalk
used any employees to remove
waste it would have been employees from Solid. This prompted Mr
Mbindwane to visit Millenium depot
site. He had a meeting with Marius
Conradie and one Witness Mdudu. According to Mr Mbindwane Millenium
agreed not to contract or
deal with Hans Gottschalk any further. Mr
Mbindwane told the Court that he had never had interaction with
Witness Mdudu. After
some time Mr Mbindwane gathered that Marius
Conradie was arrested. From then Mr Mbindwane started having dealings
with Mr Oosthuizen
who made promises that the Plaintiff would recover
money paid erroneously to Environmental Cleansing SA (Pty) Ltd and
reimburse
the Defendant company. Mr Mbindwane was subjected to some
lengthy and truth searching cross- examination.
[5]
MR WITNESS MDUDU
testified for the
Plaintiff Company. He has worked for Millenium for twenty six (26)
years as the Operations Manager. He testified
that Marius Conradie
was in charge of the Bellville office of the Plaintiff company.
Marius Conradie was Mr Mdudu’s immediate
boss. It. was Mr
Mdudu’s function also to dispatch trucks and instruct
employees. Mr Mdudu testified that he was aware that
a tender was
awarded by the City of Cape Town for the removal of waste in informal
settlements. The contact person was Tony Truter
for the City.
According to Mr Mdudu when the tender was awarded it was confusing in
that two contractors had to work on the same
tender. Mr Mdudu
testified that Hans Gottschalk was awarded the first schedule and
Millenium was awarded the second schedule. Testifying
further, Mr
Mdudu told the Court that he and Marius Conradie “looked at the
tender and decided to call Hans Gottschalk into
a meeting to discuss
how we are going to execute this tender.” According to Mr Mdudu
they, together decided to go to Mr Truter
of the City of Cape Town.
With Mr Truter involved, a decision was taken to divide the areas
because Mr Truter also foresaw that
there would be problems in
executing the tender. According to Mr Mdudu, Millenium’s area
then became Houtbay and Hangberg
it being convenient in that
Millenium was already doing a door to door collection in Houtbay.
Therefore, if a truck had a breakdown
it would easily be assisted by
another truck working in the same area. According to Mr Mdudu, the
agreement reached was that Millenium
would do schedule 1 and 2 in the
same area. Asked who was present at that meeting, Mr Mdudu testified
that it was himself, Marius
Conradie and Hans Gottschalk. Schedule 2
at other areas was to be done by the Defendant represented by Hans
Gottschalk in that
meeting.. Hans Gottschalk was thus doing De Noon,
Langa and Atlantis.
[6] Mr Mdudu told
the Court that he had no role whatsoever in invoicing. Marius
Conradie was doing the invoicing. Mr Mdudu’s
only role in that
regard was to give Marius Conradie information on how many containers
were done per month. He testified that
the Plaintiff company had many
vehicles, the compactors. At a stage there were seventeen (17)
compactors. These vehicles were numbered
and thus identifiable. There
were seven (7) containers in Houtbay and four (4) in Hangberg. The
City added three (3) more at Hangberg
so that there were fifteen.
(15) containers in that area. Asked about what Mr Mbindwane said
about truck of Millenium being too
big to manoeuver in between the
shacks, Mr Mdudu testified that the containers were on pavements;
there was no place for containers
between the shacks. There was a
sub-contractor that took black bags from the shacks to the
containers. At Hangberg containers were
on the side of the tar road
and even there - no containers were placed between the shacks. After
the appointment of Mr Oosthuizen,
Mr Mdudu took him to the area to
see how work was carried out there. Eventually Mr Oosthuizen took a
decision that the Plaintiff
company will no longer have an interest
and the contract was given to someone else.
THE ALLEGED
AGREEMENT
[7]
It is our law that the Defendant bears the onus to prove the
agreement it alleges and on which reliance is placed. See:
Stocks
and Stocks (Pty)
Ltd
v T.J. Daly and Sons (Pty)
Ltd
1979 (3) SA 754
(A) at 762 G-H. Perhaps I need to set out this
infra
:
“
Ordinarily,
the general rule is that a plaintiff who sues on a contract must
prove his contract, even though this may involve proving
a negative,
viz that an additional term by the defendant was not agreed to by the
parties (Kriegler
v
Minister
and Another
1949 (4) SA 821
(A) at 826-8; Topaz Kitchens (Pty)
Ltd
v
Naboom
Spa (EDms) Bpk
1976 (3) SA 470
(A) at 472-4).
”
Of
this much was common cause between the parties. In the Defendant’s
counterclaim the Defendant formulated the alleged agreement
as being
an oral agreement concluded telephonically between the Plaintiff and
the Defendant during November 2005, the Defendant
being represented
by Bongani Mbindwane and the Plaintiff represented by a certain Wendy
and a certain Witness. It is alleged that
the Plaintiffs
representatives were in Bellville and the Defendant’s
representative was in Cape Town. The Defendant alleged
that the terms
of the agreement are the following:
“
3
.1.
The defendant would supply refuse and disposal semices in the
informal settlements of Hout Bay and Hangberg on plaintiff’s
behalf;
3.2. The
defendant would charge plaintiff on. the basis ofR444.80 per hour;
3.3. The
defendant would invoice plaintiff on a monthly basis;
3.4.
The defendant’s invoices would be paid on presentation.
”
[8]
The evidence presented by the Defendant in order to prove the alleged
agreement, did not prove the alleged agreement, so much
so that Mr
Mbindwane stated that the evidence that he gave on behalf of the
Defendant, in order to prove the alleged,agreement,
was in conflict
with the agreement as pleaded saying that he was not sure “
how
the defendant's attorneys could miss this
.
” He. conceded that his evidence regarding the agreement
contradicted each term and each allegation pleaded by the Defendant
setting ..out the agreement Noticeably, Mr Mbindwane presented
evidence in which he unhesitantly accused the Defendant’s
legal
team of failure, to present the Defendant’s case properly. I
have no intention of making an issue out of this nor will
it be used
to the prejudice of the Defendant’s case. But it does need to
be said that it indeed is concerning in that ordinarily
the
Defendant’s legal team must have had consultation with their
only witness, Mi* Mbandwane, in connection with this matter
and in
such consultation they would have dealt with and fully considered the
allegations as pleaded on behalf of the Defendant.
[9]
Most certainly such consultation did as a matter of fact take place.
This is evidenced by the fact that it was realized that
the agreement
as pleaded was in conflict with Mr Mbindwane’s instruction. I
say so because prior to the trial an application
was made on behalf
of the Defendant to amend paragraph 2 of the claim in-reconvention
i.e. by amending the date when the alleged
agreement was concluded
and by amending the name of the person who allegedly represented the
Defendant. Importantly, the further
particulars for purposes of trial
were requested and these were supplied by the Defendant on 30 March
2012. In all fairness to
the present legal team of the Defendant, it
must be mentioned that a different set of attorneys drafted the claim
in reconvention.
The present attorneys currently representing the
Defendant had nothing to do with drafting the claim in reconvention.
The current
attorneys representing the Defendant however, supplied
the requested further particulars. That possibly explains how the
problem
regarding the counterclaim came , into being. Mr Mbindwane,
who appeared angered by this accused the Defendant’s legal
representatives
of carelessness saying they were “
not
my friends at the moment. ”
Even though the blame cannot be placed on the current legal
representatives who are handling the case for the Defendant, one
would
be inclined, however, to infer that at the time the counter
claim was drafted, it was and must have been drafted in accordance
with the instructions given by Mr Mbindwane at that point in time.
That in effect must mean he has changed his evidence such that
it
conflicts with what was pleaded on behalf of the Defendant.
[10] The evidence of
Mr Mbindwane was that the agreement was orally concluded between
himself on behalf of the Defendant (Solid),
Marius Conradie for
Millenium and Mr Truter on behalf of the City of Cape Town. Mr
Mbindwane testified that the terms of the agreement
were (a) Solid
would do Millenium’s additional collections; (b) Solid would
use Millenium’s rates to bill for the work
done; (c) Millenium
would, invoice the employer for the work including the work done by
Solid; (d) the City authorized the arrangement.
The difficulty is
that the evidence relating to the terms of the agreement as briefly
set out above, is not only in conflict with
the terms of the claim in
reconvention but it is also in conflict with information contained in
the documentation presented as
evidence. Mr Mbindwane’s
evidence is self-contradicting. It was demonstrated in his evidence
where for instance, he stated
that the Plaintiffs representatives
were aware at all times that the Defendant (Solid) was the party that
the Plaintiff was dealing
with in the execution of the tender
requirements awarded by the City , of Cape Town. However, in an
Affidavit dated 2 March. 2007
the opposite evidence was presented to
the. Court in an urgent. application set out in Bundle D. In D234 for
an example Mr Mbindwane
stated the following:
“
In
addition, there is nothing contained in the affidavit of the Second
Respondent to suggest that Millenium agreed to enter into
separate
agreements with the First Respondent. On the contrary-, there is no
evidence to suggest that Millenium was even aware
of a distinction
between the Applicant and the First Respondent. ”
In
D235 of the same Affidavit deposed to by Mr Mbindwane the following
inter alia
appears:
“
60
...........
It
is significant that no correspondence from Millenium supporting this
contention is attached to the Affidavit. It is difficult
to see how
Millenium could have been aware of a distinction between the
Applicant and the First Respondent when in reality the
representatives of millennium would have only dealt with the Second
Respondent It would have been up to the Second Respondent to
point
out to Millenium that he was now representing another entity before
Millenium could have undertaken to enter into an agreement
with that
entity.
”
[11] The First
Respondent in that urgent application was Environmental Cleansing SA
(Pty) Ltd whilst the Second Respondent was Hans
Jorg Gottschalk. Mr
Hans Gottschalk was not called by the Defendant in the instant matter
to substantiate the allegations contained
in the claim in- .
reconvention including whether or not the work was . done in terms of
the agreement. Mr Acton in his submission
asked me to merely accept
that the work was done because there are invoices, in terms of which
the Plaintiff paid. The difficulty
is that payment Mr Acton seemingly
relies on were not made to the Defendant but to an entity, known as
Environmental Cleansing
SA (Pty) Ltd. I am asked by. both counsel to
consider the probabilities. It would be: improbable that Mr Mbindwane
as the CEO of
the Defendant would get involved in. the discussions
and arrangements relating to the logistical implementation of the
execution
of the obligations in.terms of the tender. Importantly, the
Defendant had a specialist operations ; manager that had vast
experience
in waste management, albeit according to Mr Mbindwane in
wet waste. That operations manager I am referring to is Hans
Gottschalk,
who also was a significant shareholder in the Defendant.
Mr Mbindwane himself was in charge of the accounting matters of the
Defendant.
It remains improbable that Hans Gottschalk would have been
excluded in discussions relating to the implementation and
discussions
relating to the tender.
[12]
Another important improbability is that Mr Mbindwane would not have
been aware of invoices not being raised by the Defendant
in respect
of the alleged work as set out in the counterclaim. It of course
remains inexplicable how Mr Mbindwane could not have
been aware that
the Defendant was not issuing invoices in respect of work that it
alleges it did on the Plaintiffs behalf - until
December 2006. It is
safe to assume that Mr Mbindwane must have been aware of this
improbability and that is probably the reason
why he advised his
legal representatives that invoices in respect of the work were
issued on a monthly basis “
for
a specific month
,
at
the beginning of the following month.
” The Defendant ;ds -of course probably totally unaware of
whether or not work had been done in terms of the alleged agreement
and what such work actually entailed.;. This much appears from the
replies to the request for further particulars for purposes
of trial.
UNDERTAKING TO
PAY
[13] Mr Acton
submitted that the meeting was. set. by Mr .Mbindwane and he gave
clear evidence in this regard tha^ Mr Qosthuizeii
liridertook to pay
the amounts and seeing that the Plaintiff :omitted to call Mr
Oosthuizen, I must accept that Mr Mbindwane’s
account is
correct. However, nowhere in the pleadings is any undertaking pleaded
allegedly made by any party on behalf of the Plaintiff
in terms of
which payment of any invoices was to be made. An attempt is being
made to utilize the final paragraph of All 9 in support
of this
alleged undertaking by Marius Conradie to pay. This paragraph
properly construed does not contain an undertaking to make
payment of
the invoices that had been rendered in the past. Similarly the
allegation that A143 is suggestive of an “agreement”
concluded between Mr Mbindwane and Mr Oosthuizen in terms whereof the
latter undertook to make payment of the invoices to the Defendant,
is
not bom out by the document. The correct reading of the pleadings
reveals that from the inception the Plaintiff did not accept
any
responsibility to make payment to the Defendant and it insisted on
payment of the amount of its claim.
[14]
Mr Mbindwane as a witness was praised by. Mr Acton in his submission
inter alia:
“
He gave
clear and reasoned evidence; he dearly had good recall of the events
germane to the dispute; he came across as an honest
and reliable
witness; he coped admirably under vigorous and lengthy cross-
examination.
”
Mr
Acton is clearly simplifying what is after all rather a complex
issue. Mr Mbindwane undoubtedly has remarkably good business
acumen.
But as a witness in the instant matter another picture of him
presents itself. I was not personally impressed by Mr Mbindwane
as a
witness but indeed very impressed by his display of business
know-how. Not only did he not answer questions put to him, but
he
elected to give a long never ending narration when confronted in
cross-examination. This is what caused apparent contradictions
in his
evidence and some inexplicable improbabilities some of which have
already been documented
supra
in this judgment. He became angry whilst under cross-examination and
went so far as to accuse the Plaintiffs representatives as
being
dishonest, guilty of fraud and corruption. It was also out of
apparent anger and frustration in cross-examination when he
accused
the Defendant’s legal representatives of certain inequities.
This Court is more than aware of the practice that certain
witnesses
and/or litigants tend to place the blame on their legal
representatives whenever they find it difficult to explain certain
aspects of their cases. This obtains even in criminal proceedings.
[15] The reality is
that on the evidence given by Mr Mbindwane one would safely conclude
that the Defendant has no claim against
the Plaintiff because payment
had already been made. It shall be recalled that Mr Mbindwane’s
evidence was that Hans Gottschalk
was authorized to act on behalf of
the Defendant to issue invoices, and to procure payment for and on
behalf of the Defendant.
After Hans Gottschalk had obtained such
payment, it was his obligation to ensure that the money is paid into
the Defendant’s
bank account. According to Mr Mbindwane, it was
at that stage that Hans Gottschalk diverted the monies to the account
of Environmental
Cleansing SA (Pty) Ltd. This also appears from the
allegations in the legal proceedings instituted against Environmental
Cleansing
SA (Pty) Ltd and Hans Gottschalk. In those proceedings it
was in fact alleged that Hans Gottschalk stole the money from the
Defendant,
I was concerned about this such that I posed the question
in clarification to Mr Mbindwane as to the whereabouts of Hans.
Gottschalk
and the status of the civil claim lodged against him by
the Defendant. It came as a shock to me to gather that such a civil
claim
to recover that money from Hans Gottschalk had either been
abandoned or was withdrawn. The Defendant must have been ill-advised
in this regard. It had a legitimate claim against its own employee
and co-shareholder to recoup the money meant for the Defendant
which
would have reached its destination but for the interventions by the
employee and co-shareholder, Mr Hans Gottschalk. In any
event why
must the Plaintiff pay twice the same amount? Money was paid but was
diverted and stolen by Mr Hans Gottschalk, the employee
and
co-shareholder of the Defendant. Certainly the Defendant must look up
to Hans Gottschalk to repay the money he pocketed. The
paper trail
talks louder. This money is clearly traceable from Millenium to the
account of Environmental Cleansing SA (Pty) Ltd
an account apparently
being used by Hans Gottschalk. I hardly understood Mr Mbindwane’s
evidence that Environmental Cleansing
SA (Pty) Ltd was a company that
ceased to. trade and there is confusion as to what it exactly is
between being a private company
or a close corporation.
[16] After the
evidence in chief I was left with the impression that this is some
kind of company that was wrongly incorporated
and registered in that
its name is so closely similar to the Defendant. My impression was
that Mr Mbindwane indeed knew nothing
about Environmental Cleansing
SA (Pty) Ltd. I was taken aback though when during the
cross-examination of Mr Mbindwane it emerged
for the first time that
he (Mr Mbindwane) in fact knew much more about Environmental
Cleansing SA (Pty) Ltd. He together with Hans
Gottschalk were the
only shareholders of this company when it was incorporated. Even
though payments were made by the Plaintiff
to the account held on the
name of this entity, it is not uncommon that parties make arrangement
where the payment must go. How
would the Plaintiff have known that
Hans Gottschalk was then acting to the prejudice of a company where
he is a co-shareholder?
The blame goes back to the systems put in
place by the Defendant. There appears to have been no control at all.
Just about anybody
and everybody could issue invoices. Hans
Gottschalk. manipulated what he saw arid considered to have been a
loophole in the Defendant’s
business management.
[17] Even though the
Plaintiff also called only one witness to refute, the Defendant’s
allegations, its witness (Mr Witness
Mdudu) was the only person who
could give factual evidence as to how the tender contract Was
executed. Mr Mdudu was a good witness.
His evidence was clear and
chronological. He occupied a position in the Plaintiff company
similar to that occupied by Hans Gottschalk
at the Defendant company.
According to his evidence the Plaintiff did all the work at Hout Bay
and Hangberg. Even if the latter
part of his evidence may be opened
to some doubt in view of money paid to Environmental Cleansing SA
(Pty) Ltd, the fact of the
matter is that the Defendant has not
discharged the onus and its claim in-reconvention stands to be
dismissed with costs forthwith.
After the cross-examination of Mr
Mbindwane (the Defendant’s only witness) just before I excused
him from the witness stand,
Mr Acton moved an application to amend
the alleged provisions pf the agreement pleaded in the counterclaim.
Even though this was
not objected to on behalf of .the Plaintiff, the
amendment came rather in the afternoon of the: Pefendarit’s
case. Damage
had already been done in this regard. Although in.terms
of Rule 28 an amendment can be asked and effected at any stage of the
ci
vil trial, practitioners must guide against amendments that come
extremely late because they may not resuscitate the litigant’s
case.
ORDER
[18] In the
circumstances judgment is. entered in favour of the Pldmtiff against;
the Defendant as follows:
(a) It is ordered
that the Defendant. pays to: the Plaintiff the sum of two hundred
and four, thousand, four hundred , and ninety
five rands and forty
eight cents (R204 495.48).
(b) The Defendant
shall pay interests on the abovementioried sum of money calculated
at the rate of 15.5% per annum with effect
frdfn 1 ; June 2007 to
date of payment thereof as well as costs of suit.
(c) The Defendant’s
claim in reconventions is dismissed.
DLODLO, J