South Africa: North West High Court, Mafikeng

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Balkgo\'s Construction and Another v Greater Representative Council and Others (640/2000) [2004] ZANWHC 5 (4 March 2004)

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CIV. CASE NO. 640/2000



IN THE HIGH COURT OF SOUTH AFRICA

(BOPHUTHATSWANA PROVINCIAL DIVISION)



In the matter between:



BALKGO’S CONSTRUCTION AND ANOTHER Plaintiff


and


THE GREATER REPRESENTATIVE COUNCIL

AND OTHERS Defendants


CIVIL MATTER


MAFIKENG


HENDRICKS J


DATE OF HEARING: 16 February 2004

DATE OF JUDGMENT : 04 March 2004


COUNSEL FOR PLAINTIFF : Adv. N.Janse Van Niewenhuizen

COUNSEL FOR DEFENDANTS : Adv. J.M. Barnard (1ST & 2nd Def.)





HENDRICKS J:


The First Plaintiff Balkgo’s Construction CC together with one of its members namely Moto-Koa Nat Kgobe instituted action against The City of Tshwane Metropolitan Municipality as First Defendant and its Chief Executive Officer as Second Defendant for payment in the amount of R1 022 677.80. The basis of this claim is for contractual duties which the Plaintiffs performed and for which they alleged were not paid. The Third Defendant is one Gert Pieterse.


BACKGROUND


The predecessor of The City of Tshwane Metropolitan Municipality in the Temba Region was the Greater Temba Representative Council. Tenders were invited to build houses for the people in the Temba Region. It is common cause that one of the tenders was awarded to Balkgo’s Construction CC (First Plaintiff). First Plaintiff was involved in a joint venture with Balemi Construction. They were one of the smaller contractors who were building houses in that area.


There was a process of payment in place, namely that upon completion of certain phases in performance of the contract, a certificate was completed and presented for payment.


It is clear from the evidence of Mr Maree and Mrs Modise who testified on behalf of the First and Second Defendants, that certificates were presented by and on behalf of the First Plaintiff for payment. The following cheques were issued in the name of first Plaintiff:-



CHEQUE NO.


NAME


AMOUNT


DATE RECEIVED


532


Balkgo’s


R135 531-28


22/05/1998


556


Balkgo’s


R285 022-13


17/06/1998


718


Balkgo’s


R 211 429-85


12/08/1998


762


Balkgo’s


R 110 525-37


09/09/1998


920


Balkgo’s


R 130 180-85


21/10/1998


2235


Balkgo’s


R 101 210-25


03/12/1998


2287


Balkgo’s


R 48 796-10


26/01/1999


5090


Balkgo’s


R 60 547-54


11/02/2000




TOTAL


R1 083 243-37




It is not in dispute that the two last cheques that were issued in the amounts of R48 796-10 and R60 547-54 were indeed received by or on behalf of First Plaintiff.


What is in dispute is whether payment was made by First Defendant to First Plaintiff for the first six amounts listed above, and whether the Third Defendant M. Mr Gert Pieterse, was authorized to accept cheques on behalf of First Plaintiff and whether he did so with the knowledge of First Plaintiff’s members.


I will deal in seratium with these two issues.


  1. Was payment made by First Defendant to First Plaintiff?


It is abundantly clear from the evidence of Mrs Modise that the cheques listed as 1 to 6 above were indeed issued in the name of First Plaintiff. Her evidence is corroborated by documentary proof that the said six cheques were deposited or changed at the bank and were indeed honoured by the bank.


There is also documentary evidence to proof that most of these cheques were collected by and deposited or changed by Third Defendant.


It appears on the face of it that payment was indeed affected by First Defendant in favour of First Plaintiff.


Mrs Janse van Niewenhuizen, who appeared on behalf of the Plaintiffs’ submitted that the fact that First Defendant issued these cheques in the name of First Plaintiff does not necessarily mean that payments to the First Plaintiff has been effected. This submission is based on the premises that Third Defendant, who collected these cheques were not authorized to collect it on behalf of First Plaintiff. This would mean that despite the fact that these cheques were issued in the name of the First Plaintiff it landed in the hands of another person who either banked or changed it and effectively meant that First Plaintiff was not paid for the work done.


First Defendant, so it is submitted, is therefore not exonerated from his liability to pay First Plaintiff because First Defendant effected payment to a “wrong” person.


In this regard I am referred to the case of Bonwer NO v Saambou Bank Bpk. 1993(4) SA 492 (T), which I will deal with later in this judgment.


Was Third Defendant Mr Gert Pieterse, authorized to accept these cheques for and on behalf of First Plaintiff and was he in accepting these cheques doing it with the knowledge of the members of First Plaintiff?


There is undisputed evidence before me that Gert Pieterse, who also happen to be an “agent” for First Defendant, signed for receipt of the First six cheques listed above. It is clear from the documentary evidence before me that he either deposited the money into his own account or in some instance that he cashed some of these cheques.


In deciding the issue as to whether Gert Pieterse (Third Defendant)

was authorised or not to accept these cheques for and on behalf of First Plaintiff . I must take into account what is contained in Exhibit “B” and Exhibit “E” respectively.


Exhibit “B” is a letter on the letterhead of First Plaintiff addressed to

Mr Maree the first witness, who testified on behalf of the First and Second Defendants. This letter is written by Thabo Phillip Baloyi, who together with Mothokoa Nathaniel (Nat) Kgobe are the registered members of First Plaintiff as proven by Exhibit “D”.


In the second last paragraphs on the first page of Exhibit “B”, the following is stated:-


“ I agree with Ben that I will pay him his R40 000.00 back at the end of the project by the time we would be sharing commission, as we were all members of Balkgo’s Construction CC, Ben, Gert, Nat and I.” [my underlining]


It was established through cross-examination that the Ben that is referred to in the letter is Ben Pieterse, the brother to Gert Pieterse the Third Defendant. The Gert that is referred to in the letter is Gert Pieterse, the Third Defendant. The Nat that is referred to is Nathaniel Mothokoa Kgobe.


It is clear from the reading of this paragraph that Gert Pieterse (Third Defendant was regarded by the two registered members of the First Plaintiff (Mr Mothokoa Kgobe) as being a member of First Plaintiff.




In an affidavit made by Mothokoa Nathaniel Kgobe to a member of the South African Police Services and which was handed in as Exhibit “E”, the following is stated under oath in paragraphs 5, and 8 thereof:-



.....................


It is clear from Exhibit “E” that:-


    1. Gert and Ben Pieterse were co-opted as members of First Plaintiff


    1. Gert knew that a bank account could not at that stage be opened in the name of the First Plaintiff;


    1. Gert “would keep the money safe” until a bank account was opened in the name of the First Plaintiff;


    1. After the opening of a bank account in the name of First Plaintiff, “all the money which were left after the expenses were paid would have been paid into this account...”


It is indeed clear that Gert Pieterse was authorized by virtue of being either a member or so-called silent partner of First Plaintiff to accept and receive payment on behalf of First Plaintiff.


It is furthermore clear from the affidavit of Kgobe (Exhibit “E”) that it was agreed upon that Gert Pieterse would keep the money of First Plaintiff “safe” until a bank account is opened in the name of First Plaintiff.


The money referred to must have included the six cheques referred to above seeing that his was the first and maybe the only project in which Gert Pieterse was involved with the other members of First Plaintiff.


Did Gert Pieterse accept these cheques with the knowledge of the other members of First Plaintiff?


From the reading of Exhibit “E”, it is perfectly clear that the other members of First Plaintiff. (Mr Baloyi and Mr Kgobe) must have been aware of the fact that Gert Pieterse would not only collect the payments for and on behalf of First Plaintiff but that he would also “keep is safe”.


To argue that they were not aware of the fact that he collected the cheques and kept the money safe is ridiculous. It was agreed that Gert Pieterse would, after the opening of a bank account in the name of the First Plaintiff, transfer the money which was lest “after the expenses were paid” into this account. The question arises as to how would Gert Pieterse transfer the money into the bank account that had to be opened in the name of First Plaintiff if he was not authorised to collect and accept the money for an on behalf of First Plaintiff?


Furthermore, how would it be agreed upon that the balance of the money (after expenses were paid) be transferred into this account of First Plaintiff if Gert Pieterse was not authorised to collect the money (in the form of a cheque), kept it safe and pay expenses?


The only conclusion that I come to under these circumstances is that Gert Pieterse was not only authorised to collect these cheques (money) for and on behalf of the First Plaintiff but he did so with the full knowledge of Mr Kgobe and Mr Baloyi, the other member of First Plaintiff.



Mr Phillip Baloyi, also conceeded whilst testifying that certificates for payment for work done were submitted every fortnightly. These certificates were paid and some of the money was utilized in the building project and some to pay the employees salaries. This corroborates what is stated under oath in Exhibit “E” by Mr Kgobe.


I had the opportunity to read and reflect on the case of Bouwer NO supra.

This case is not at all on all four with the present matter as submitted. Save to state that if there was evidence placed before me to proof that Gert Pieterse as one of the Creditors of First Plaintiff was erroneously paid by First Defendant, abovementioned case would have been relevant. The difference between this case and the Bouwer - case is essentially that in the present matter Gert Pieterse was a member or silent partner of First Plaintiff and was authorised to receive payment for and on behalf of the First Plaintiff and to deal with the money of First Plaintiff until a bank account was opened in the name of the First Plaintiff whereafter the balance of the money would have been transferred to such an account.


CONCLUSION


It is particularly clear that First Defendant did pay First Plaintiff in terms of their contract for the word done. Payments were received by Gert Pieterse who was authorised to receive such payments for and on behalf of First Plaintiff. First Defendant therefore fulfilled its obligation in terms of the contract and should therefore be exonerated from paying twice. Plaintiffs’s claim must therefor be dismissed.


COSTS


Mr Barnard who appeared on behalf of the First and Second Defendant submitted that a punitive costs order should be made against the Plaintiffs.


He advanced a reason for his submission the fact that the Plaintiff’s did not discover exhibits “B” and “E” with the result that First and Second Defendant went to great lengths in order to obtain these exhibits. These exhibits do form the basis of this action and Plaintiffs knew very well that if they discovered these exhibits their claim would be without any merit.


I am in full agreement with these submissions made by Mr Barnard. Not only is it essential for a litigant to discover all the relevant and important documentation but also to take the court in its confidence and be honest and open with the court.


The fact that these important documents were not discovered and that it was only revealed to the court by the First and Second Defendant through cross-examination of the witnesses who testified for and on behalf of the Plaintiffs clearly