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Matrotech Engineering CC v Westingcorp Power Industries (Pty) Ltd (20149/2005)  ZAGPHC 95 (6 June 2007)
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IN THE HIGH COURT OF SOUTH AFRICA
(TRANSVAAL PROVINCIAL DIVISION)
DATE: 6 JUNE 2007
CASE NO: 20149/2005
In the matter between:
MATROTECH ENGINEERING CC ......................... PLAINTIFF
WESTINGCORP POWER INDUSTRIES (PTY) LTD DEFENDANT
The plaintiff is Matrotech Engineering CC (Matrotech).
The defendant is Westingcorp Power Industries Pty Ltd (Westingcorp).
The plaintiff claims an amount of R1 240 763.47 from the defendant in terms of a contract it says it concluded with the defendant. It alleges that on 1 November 2004 it submitted a tender to the defendant for the erection of a power line in Zambia and the Democratic Republic of the Congo (DRC) and that the defendant on 19 November 2004 in writing accepted the tender. It alleges that one Peter Bosch on behalf of the defendant in writing accepted the tender.
The plaintiff alleges that it duly performed its obligations, that certain payments were made and that the amount claimed is the balance outstanding.
The defendant in its plea denies that an agreement between it and the plaintiff was ever concluded. It alleges that it acted as an intermediary between the plaintiff and Westingcorp Zambia Ltd (Westingcorp Zambia). It alleges that any payments made by it to the plaintiff were in its capacity as an intermediary.
It is not at this stage necessary to refer in any greater detail to the pleadings.
The plaintiff called three witnesses: its attorney Mr Roets, Mrs Terry Roberts, its only member, and Mr Jeffrey Roberts, the husband of Mrs Roberts.
Mr Roets testified that he wrote a letter dated 10 May 2005 to Mr Peter Bosch of the defendant. See C22. He wrote the letter as a result of a telephone conversation in which he asked Mr Bosch why the plaintiff’s account was not paid. Mr Bosch confirmed that the account was correct. He said that there was a problem with money. He had to obtain payment from the firm for whom the work had been done. Mr Bosch did not say that the plaintiff had no contract with his company.
On 13 May 2005 a Mr Gancho left a message for him. On 17 May 2005 Mr Bosch called him and told him that he would send him a report about the matter.
On 20 May 2005 he received a fax from Mr Gancho in which the attitude was expressed that the plaintiff was not entitled to insist on payment without waiting for Zambia to pay first. See C20.
On 20 May 2005 he sent a letter of demand. On 13 May 2005 summons was issued.
He referred to C2 according to which Mr P.C Bosch has been a director of Westingcorp since 1 January 2002.
He confirmed that neither Mr Gancho nor Mr Bosch ever told him that the plaintiff had not contracted with the defendant.
Mrs Roberts testified that she handled the administration and financial affairs of the plaintiff. Her husband was the technical man.
Until this contract the plaintiff had not done work outside the Republic.
This contract was preceded by a visit by her husband to Zambia. Westingcorp paid her husband’s travelling expenses.
The plaintiff submitted a written quotation dated 1 November 2004 to the defendant. The price was set out in the bill of quantities annexed to the quotation. She referred to annexure A to the Particulars of Claim as the quotation and the bill of quantities. Annexure B, dated 19 November 2004 was a letter from the defendant confirming the acceptance of the quotation.
Annexure C is a statement by the plaintiff dated 5 May 2005, which sets out the composition of the amount claimed.
She had discussions with Mr Peter Bosch about payment. She also had discussions with the defendant’s accountant, one Jaun. Mr Bosch never denied liability. He never said that the plaintiff was looking at the wrong company for payment.
She was not aware of the existence of Westingcorp Zambia. She became aware of it the first time when she read Mr Bosch’s affidavit in the summary judgment proceedings.
Mr Bosch did not tell her that the defendant had a share in a Zambian company. She was aware that the defendant had an office in Zambia.
Mr Bosch telephoned her husband one afternoon to tell him that the plaintiff’s quotation was successful.
The plaintiff never sent invoices to Westingcorp Zambia.
The plaintiff received payments from the defendant. The only other source of payments was advances made to her husband in Zambia.
She was referred to C39, a statement rendered by Westingcorp Zambia to the defendant. The payments reflected therein do not tally with the payments received by the plaintiff.
She referred to C41, a statement which shows the payments received by the plaintiff. Payments of R1 300 000.00 were made by means of cheques deposited by the defendant into the plaintiff’s account. The cheques can be seen in C37.1 to C37.5. They were drawn by the defendant.
An amount of R383 429.73 (see C30) was received from Zambia.
The plaintiff was registered for VAT. She referred to the quotation in terms of which the quoted price excluded VAT at 14%.
She referred to a quotation by the defendant to Bwana Mkubwa Mine (the Mine) dated 5 November 2004 which she received from Mr Mulenga, the defendant’s representative in Zambia. See B1-1. She pointed out that the price basis, the payment basis and the completion date were worded in the same terms as the plaintiff’s quotation.
In cross-examination it was pointed out to her that according to C41 the plaintiff received R1 683 429.73 whereas in paragraph 11 of the Particulars of Claim it is stated than an amount of R1 212 719.10 was received.
She agreed that order numbers 1307 and 23580 were used by the plaintiff. See C5, C6 and C7. The number 1307 was the plaintiff’s own number. It was used for the DRC component. The number 23580 was given by Jaun.
She was referred to C11, a letter dated by 5 November 2004 by the Mine to Westingcorp Zambia in which it was stated that Westingcorp Zambia’s tender for the Lonshi 33KV Overhead Line was successful. This document was sent to the plaintiff by Mr Mulenga after the completion of the contract.
She confirmed that C12 was a letter dated 15 November 2004 sent by the plaintiff to the defendant. In it the plaintiff inter aliarequired the following:
a copy of the official contract “from Bwana Mkubwa Mining Ltd to Westingcorp Zambia”.
“a contract from Westingcorp Zambia to Matrotech Engineering for the work to be carried out”.
an e-mail from Ryan (Bosch) “of the short term Employment Contract on a Westingcorp Zambia letterhead”.
She denied that this letter suggested that the plaintiff knew that its contract was with Westingcorp Zambia. The documents were needed for the purpose of obtaining work permits. She needed an employment contract with a Zambian address. She did not know that the Zambian company existed.
C18 is a statement sent to her by Mr Mulenga. It purports to be a statement by Westingcorp Zambia of all payments relating to Mr Roberts. The last payment reflected on it is dated 27 January 2005. The handwriting on the document is hers. She did not agree that the document showed that Westingcorp Zambia was a separate entity.
A14 was a letter dated 16 February 2005 to the defendant in the name of her husband but typed by her. In the second last paragraph it is stated that the plaintiff quoted to the defendant and not to “WPI Zambia”. It was put to her that this letter showed that she was aware of the existence of the Zambian company. She denied it and said that she was aware of an office in Zambia. She thought that Mr Humphrey Mulenga represented the defendant.
She was referred to A13, a document in which she referred to the statement of “W/corp Zambia” dated 22 February 2005. The document reflects her comments on statements received from Mr Malinga. She was not aware that there were two entities.
She was referred to a letter dated 10 March 2005 from the plaintiff to Westingcorp Zambia. She accepted that it distinguished between “Westingcorp Pretoria” and “Westingcorp Zambia”.
She admitted that the bill of quantities annexed to the particulars of claim is actually an amended bill and that certain items were deleted from the original bill.
It was put to her that it appears from her letter dated 15 December 2004 (see C12) that a contract had already been concluded. She seemed to agree but added that the plaintiff waited for the defendant’s letter dated 19 November 2004 because it had to have something in writing from the defendant for logistical purposes.
It was put to her that the letter dated 19 November 2004 was sent to the plaintiff because the plaintiff needed it to get work permits for its staff. She confirmed it and said that she asked Mr Ryan Bosch for short term employment contracts.
It was put to her that the letter dated 19 November 2004 was wrongly sent on a letterhead of the defendant and that it was addressed “to whom it may concern”. She answered that she could not see why it was a wrong letterhead. She pointed out that the letter was addressed to her husband.
She never assumed that the defendant was a mere facilitator.
C31, two e-mails relating to the rental of an excavator from Group Five, were received after the completion of the contract.
She was referred to A3-1 a letter dated 30 July 2005 written by her husband to Mr Paul Geldenhuys, the project engineer of the Mine. In it he asked comments on Mr Bosch’s affidavit in the summary judgment proceedings. She was referred to sub paragraph (m) which contained a reference to Westingcorp Zambia. It was put to her that it showed an awareness of the existence of the Zambian company. She replied that the awareness came after the affidavit.
She denied that the handwriting on A18-1 (the letter of the defendant to the Mine) was that of her or her husband.
She denied that she would have agreed to a contract with a Zambian company. The plaintiff would never have been sure of its money. She did not know who the directors were. The plaintiff had in the past done business with the defendant.
Mr Roberts described how he knew Mr Peter Bosch as a player in what he called the switchgear game.
In October 2004 he was in Mr Bosch’s office, discussing switchgear business. Mr Bosch asked him whether he was interested in doing work in Africa. He said he was interested. Mr Bosch said that he had a contact with an office in Zambia.
Some time later Mr Bosch telephoned him and said that he had to get his passport ready. They flew on separate flights to Zambia because he had a problem with his passport. On 29 October 2004 they had a site meeting at the mine. He met Mr Mulenga. He was introduced as the representative of Westingcorp in Zambia. He was told to indicate that he represented Westingcorp. He met Mr Paul Geldenhuys, the project engineer of the Mine. They went into the DRC.
He visited the office of Mr Mulenga in Kitwe. He saw the name of Consolite displayed.
He was not present when Mr Bosch and Mr Mulenga had discussions.
On their return in South Africa Mr Bosch asked him to submit a quotation. A copy of the tender was given to him at the site meeting.
He submitted the quotation. A few days later Mr Bosch telephoned him to say that the quotation was successful.
Annexure B was a letter from Mr Bosch to say that they could proceed. He dealt with Mr Peter Bosch. He had no dealings with Mr Ryan Bosch.
He did not know of the existence of Westingcorp Zambia. He only became aware of its existence after he had read the affidavit opposing the application for summary judgment.
He received no payment from Mr Mulenga, except petty cash for food, vehicle expenses etc. He had a problem with bank facilities and he asked Mr Mulenga to help him.
The work was completed and there were no queries. There were variations which were discussed with Mr Bosch and Mr Geldenhuys.
When there were problems with payment he went to see Mr Bosch in Wierda Park. He said that he would fly to Zambia to resolve the matter.
Mr Bosch said that the reason for non payment was that there had been no payments from Zambia. He never said that the defendant had no contract with the plaintiff.
He would not have contracted with a Zambian company. He knew Mr Bosch and had done business with his company.
He was not aware of the fact that the defendant had asked the Mine to place the order with Westingcorp Zambia, as reflected in B1-1.
He referred to B16-1 and B16-2, which is a specimen of the short term service contract given to him by Mr Bosch to be used when local people were employed.
He was asked about the reference to Westingcorp Zambia in the plaintiff’s letter dated 15 November 2005 (see C12). He said it referred to the Zambian office.
The reference to a contract was a reference to the contract between the plaintiff and the defendant.
Mr Bosch said he was going to give the contract to Westingcorp Zambia.
He denied a number of allegations contained in Mr Bosch’s affidavit in the summary judgment proceedings.
He met Mr Bosch on four occasions in Zambia.
He agreed that it would appear form B1-1 and C11 that the Mine, at the request of the defendant, awarded the tender to Westingcorp Zambia.
C8 was an invoice dated 10 November 2004 for R318 183.12. It related to expenses to travel to Zambia. He agreed that the first R200 000.00 was paid before he even went to Zambia. He was referred to the request in the letter dated 15 November 2004 (see C12) that the amount reflected in invoice 959 be made available by 16 November 2004. It was put to him that this showed that this showed that there was already a contract in existence on 15 November 2004. He accepted the proposition
He needed the letter dated 19 November 2004 because he was not prepared to leave the country without it. He never received any other written contract.
The letter dated 19 November 2004 was necessary, amongst others, to get work permits.
Mr Bosch said that he would give the contract to the Zambian office in order to boost it.
He was not aware that the Mine, according to the law of Zambia, had to give reference to Zambian contractors.
The reference in the letter of 15 November 2004 to a contract from Westingcorp Zambia to the plaintiff was a reference to the defendant’s Zambian office.
He spent five months in Zambia. Mr Mulenga seldom visited the site. He was the representative of the Zambian office.
He was not told that a Zambian company had got the tender.
He gained the impression that Mr Mulenga was an employee of Mr Bosch.
He had many discussions with Mr Bosch after February 2005. He sent e-mails to Mr Mulenga. Mr Bosch told him that the problem was that the Zambian office was not paying him. It was put to him that if Mr Mulenga was only an employee, he should have suggested that he be dismissed. He answered that that would have been unethical.
He identified C 26 and C27 as the original bill of quotations.
He confirmed that he had met Mr Ryan Bosch.
He was referred to the advances made to him, as reflected in C18. He explained that Zambia was an expensive country.
He gained the impression that Mr Mulenga was influential at the Mine.
He was referred to his statement in his letter dated 16 February 2005 that he had not quoted to “WPI Zambia”. He explained that he was referring to the Zambian office.
He confirmed that he was aware of the plaintiff’s letter dated 10 March 2005 to Westingcorp Zambia.
He denied that he was aware of the fact that there was a separate legal entity in Zambia.
He explained what happened in respect of the rental of an excavator from Group Five. See C31-32. The plaintiff only quoted for excavation by hand. Owing to heavy rains mechanical excavation had to be done. Machines were then hired. That was done outside the plaintiff’s contract. Group Five never held the plaintiff liable.
From his own knowledge he does not know whether Westingcorp Zambia exists. If is exists, he does not know what its financial position is. He does not know where Mr Mulenga is.
The defendant called two witnesses, Mr Ryan Bosch and Mr Peter Bosch.
Mr Ryan Bosch testified that he typed and signed the letter dated 19 November 2004 (annexure B to the Particulars of Claim). Mr Roberts asked him for it. He needed it to obtain work permits. He signed it on behalf of his father.
The short term service contract, B16-1 and B16-2 was not typed out by the defendant. Mr Mulenga, whose name is printed on B16-2 must have produced the document by using the defendant’s letterhead. When asked where the plaintiff could have obtained it, he suggested the Zambian office. He corrected himself by referring to the office of Westingcorp Zambia. He himself never visited that office.
It was put to him that if one looks objectively at the letter dated 19 November 2004 one would infer that the plaintiff was going to do work for the defendant. He eventually agreed.
He must have had some discussions with Mr Roberts before writing the letter. He would have discussed it beforehand with his father.
Mr Peter Bosch testified that the defendant did do work outside the Republic. The defendant has an export permit to export goods.
He referred to exhibit D, a bundle of documents relating to Westingcorp Zambia. It shows that the company was incorporated on 23 March 2004 and that the defendant held 10200 shares and Mr Mulenga’s company Consolidated Lightning (Zambia) Limited 9800 shares.
Westingcorp Zambia was established in order to do business in Zambia. There was a preference for local companies.
Mr Mulenga was a person with political influence. He had an office in Kitwe.
He heard of the Lonshi overhead line project through Mr Mulenga.
At the time the defendant did not have the resources. Westingcorp Zambia did not have manpower. It had no technicians. Previous contracts of Westingcorp Zambia were performed by the defendant.
After he had heard of the project, he asked Mr Roberts whether he would be interested in it. When he answered in the affirmative he told Mr Mulenga that he had someone to do the work. At the request of the Mine he and M Roberts travelled to Zambia to visit the site. After the visit they returned to South Africa to prepare the tender document.
The plaintiff submitted a quotation. It was a quotation for the whole tender.
The tender was addressed to the defendant because the defendant had been invited to tender. Three companies were invited to tender. The defendant and Westingcorp Zambia was considered as one company.
When Mr Roberts submitted the tender he did not know that the subcontractor would be Westingcorp Zambia.
He was sure that during the first meeting Westingcorp Zambia would have been mentioned. He could not refer to any instance where Westingcorp Zambia was mentioned.
After the initial tender had been sent, the Mine requested a revised bill of quantities. Certain items were then deleted.
When the revised the tender was sent to the Mine, they asked if the order could be placed with a Zambian company.
The defendant’s response was B1-1, dated 5 November 204, in which it was stated that if an order should originate from the offer, it may be placed with Westingcorp Zambia.
All the finances were taken over by Westingcorp Zambia.
He was asked whether Mr Roberts was aware of B1-1. He answered that he must have discussed it with him. He would have informed him of it because the order was to be placed on Westinghouse Zambia.
He referred to C11, the letter dated 5 November 2004 by the Mine to Westingcorp Zambia, as the order.
He telephoned Mr Roberts on the same day. Mr Roberts came to his office to discuss logistics.
He was referred to the plaintiff’s letter dated 15 November 2004, C12. It referred to a meeting held on Saturday 13 November 2004. At the meeting they discussed the number of people to go to Zambia, the vehicles, materials etc. He was asked whether it was discussed who the other contracting party would be. He answered that because the defendant held the export license all transmittal sheets had to be in the defendant’s name. He was asked whether anything was said about Westingcorp Zambia. He answered that he could not remember.
The letter C12 would have been filed. He was asked whether a written contract was produced. He answered that they would have contacted Westingcorp Zambia. He did not know whether a contract had been supplied. The same applied to the other documents requested.
He was asked to comment on Mr Robert’s evidence that he regarded Westingcorp Zambia as the defendant’s Zambian office. He answered that Mr Roberts was in Zambia for a long time and that he must have had discussions in Zambia. He was asked what the position was before Mr Roberts went to Zambia. He answered that the plaintiff knew that it was going to work in Zambia for a Zambian company.
The letter dated 19 November 2004 was needed by the plaintiff to show that it was working across the border. It was not the acceptance of the quotation. A written official company order would have been such a document.
He accepted that C11, the letter of the Mine dated 5 November 2004, was not such an order.
He assumed that an order was placed. He never saw it.
He confirmed his son’s evidence about the short term service contract, B16-1 and B16-2. I did not conform to the defendant’s format. Mr Mulenga had no right to sign such contracts on behalf of the defendant.
He was referred to the plaintiff’s invoice dated 10 November 2004, C8. He was asked why payment was made by the defendant and not by Westingcorp Zambia. He answered that there was an arrangement that delivery notes would be in the name of the defendant. That was to facilitate the movement of goods because the defendant had the export permit.
Payment was made by the defendant in order to comply with South African tax laws. If the goods were exported on the defendant’s permits, the Receiver of Revenue would like to see the defendant’s name on the invoices.
With reference to Westingcorp Zambia’s reconciliation of payments to Mr Roberts, C18, he testified that the defendant paid out more than it received. It also lost an amount of R100 000.00 in respect of equipment. Its total loss was R135 000.00.
When the defendant tried to get payment out of Mr Mulenga, he complained about invoices that included VAT.
The plaintiff invoiced the defendant with VAT, which was quite right. Mr Mulenga assumed that the VAT charges were incorrect.
The defendant’s invoices to Westingcorp Zambia never included VAT because VAT was not levied on work done in Zambia.
He was asked whether he told the plaintiff, when it complained about payment, that Westingcorp Zambia was a separated entity. He said that he informed the plaintiff of the problem about getting money from Zambia. He would have discussed the issue of the separate entity.
Mr Gancho tried to get the money out of Westingcorp Zambia. He tried to freeze its bank account. A claim was instituted. At the moment the company is dormant. His last contract with Mr Mulenga was in May 2005. His factory is dormant and the premises have been vacated.
With reference to C18, the reconciliation of Westingcorp Zambia, he denied that the defendant made the payment of R68 555.79. He was also not aware of the payment of R37 200.00.
He does not know whether the Mine paid Westingcorp Zambia.
The defendant would have made nothing out of the contract. It tried to establish business through Westingcorp Zambia.
The defendant had previous contracts with the Mine. They were performed directly from South Africa.
He agreed that the defendant could have benefited from the contract in its capacity as the major shareholder in Westingcorp Zambia.
He agreed that the defendant sold goods to Westingcorp Zambia.
He agreed that he was satisfied with the services performed by the plaintiff. He had no problem with the composition of the plaintiff’s claim as set out in annexure C to the Particulars of Claim.
It was put to him that he never testified that on this day, or on that occasion, he told Mr Roberts or Mrs Roberts that they had a contract with Westingcorp Zambia. He agreed.
He was asked whether he made it clear to Mr and Mrs Roberts that their contract was not with the defendant, he answered that he could not unequivocally say so.
It was put to him that if they were under a misapprehension, it would not be unreasonable. He answered that it was unlikely that Mr Roberts could have been unsure after five months in Zambia.
He agreed that Mr Roberts was not concerned with the paperwork.
He was asked if he could say that Mr Roberts and Mrs Roberts knew of the two companies. He answered that he himself never put it in writing. There would have been verbal discussions. He cannot say that he remembers any such discussions.
He accepted that the plaintiff was invited by the defendant to tender and that at that stage it was not aware of Westingcorp Zambia.
He confirmed that he told Mr Roberts that they had got the tender, which then meant the plaintiff and the defendant.
It was put to him that the plaintiff never received an order from Westingcorp Zambia. He answered that he did not know.
He denied that annexure B to the Particulars of Claim was an order. He accepted that it referred to the defendant.
He was asked how Mr Roberts should have known of Westingcorp Zambia. It was put to him that the tender was only accepted after their return from Zambia. He agreed that at the time of the visit to Zambia they did not know that the contract would be in the name of Westingcorp Zambia.
He was asked whether Mr Roberts was told that the tender would be in the name of Westingcorp Zambia. He answered that he could not say so.
He was taken through his affidavit in the summary judgment proceedings. He was referred to paragraph 12 where he said that he came to know that Westingcorp Zambia had concluded a contract with the Mine. It was put to him that on his version he knew all along of the contract. He pointed out that Mr Gancho drafted the affidavit. He was referred to paragraph 17 in which he said that he contacted Mr Roberts to tell him that Westingcorp Zambia was interested in concluding a subcontract with a company like the plaintiff. It was put to him that this differed from his evidence. He answered that this referred to after the order had been placed.
It was put to him that in paragraphs 17, 18, 19, 20 and 21 he failed to refer to his own role in the visit to Zambia.
He did not dispute Mr Robert’s evidence that he was asked to sign a register at the site meeting as a representative of the defendant.
He was referred to paragraph 21 in which he said that the tender was intended for Westingcorp Zambia and that he undertook to submit it to Westingcorp Zambia. He agreed that it was not true. He added, however, that the plaintiff knew that the defendant had someone in Zambia.
He was referred to paragraph 22 in which he said that he did not know what happened between the plaintiff and Westingcorp Zambia, but he came to know that the plaintiff’s tender was accepted.
He was referred to paragraph 29 in which he said that the defendant had no interest in the contract. He agreed that the defendant had in interest in the form of the goods supplied by it and its shareholding in Westingcorp Zambia.
He was referred to the evidence of Mr Roets and asked why he did not tell him that the plaintiff had no contract with the defendant. He answered that he told him that he would go to Zambia to resolve the matter. He could not remember what Mr Roets said.
He could not remember whether he had seen letterheads of Westingcorp Zambia.
He was referred to an advertisement that appeared in a Zambian newspaper. See exhibit “E”. It refers to Westingcorp Power Industries and gives particulars of a head office in Pretoria and a Zambian Office. He agreed that it did not mention the separate identity of the Zambian office.
He was referred to the plaintiff’s letter dated 10 March 2005 in which the plaintiff alleged that Westingcorp Pretoria accepted its quotation. See A12-1. He did not respond to it. He thought Westingcorp Zambia would have responded to it as it was the addressee.
He was referred to A14, dated 16 February 2005, in which the plaintiff said that it gave a quotation to WPI Pretoria and not to WPI Zambia. He agreed that he did not react directly to this letter. Mr Gancho tried to obtain payment.
He confirmed that VAT only applied between South African Companies. That was why VAT was paid to the plaintiff in respect of goods exported under its export permit. VAT was not payable on labour in Zambia.
In re-examination he was referred to C18 which refers to Westingcorp Zambia as a company with limited liability and A2-1, a letter dated 2 September 2005, a letterhead of Westingcorp Zambia.
With reference to B2 he testified that Westingcorp Zambia would have made a profit of R258 529.00 on the contract.
He made the point that he had no personal knowledge of the amount of R383 429.73 shown in the plaintiff’s statement dated 5 May 2005 as having been agreed.
After the defendant had closed its case Mr Brand, who appeared for the plaintiff applied for leave to file a replication introducing a reliance on estoppel. I dismissed the application.
Mr Brand argued that the evidence of Mr and Mrs Roberts should be accepted and that the court should find that the plaintiff concluded a contract with the defendant.
Mr Lindeque, who appeared for the defendant, argued that the evidence shows that there was no consensus between the plaintiff and the defendant as to who the main contractor would be.
First of all I want to say something about the credibility of the witnesses.
There is no reason to question the evidence of Mr Roets. He had a specific purpose when he telephoned Mr Bosch and one must accept that he would not have missed it if Mr Bosch had denied that the defendant was liable to the plaintiff.
Mrs Roberts and Mr Roberts impressed me as honest, reliable people, not very sophisticated, but good at what they were doing. Even though they themselves operate through a close corporation I do not think that they are well versed in all the niceties of corporate personality. They consistently referred to the Zambian company as the defendant’s Zambian office. In other words, when they referred to Westingcorp Zambia, or WPI Zambia, they did not mean Westingcorp Zambia Limited.
Mr Ryan Bosch was not directly involved with this contract and he could not remember the details of the discussions that prompted him to write the letter dated 19 November 2004.
Mr Peter Bosch is a man with wider horizons than Mr Roberts. It was almost conspicuous how he refrained from saying anything that may have the effect of making Mr Roberts a liar. The affidavit he made in the summary judgment hangs like an albatross round his neck. It is not necessary to analyze it now. It is totally misleading. It creates the impression that there were hardly any links between the defendant and Westingcorp Zambia and that Mr Roberts went on his own to Zambia and concluded a contract of which he merely came to know.
Mr Lindeque heavily relied on the plaintiff’s letter dated 15 November 2005 as proof that the plaintiff knew that they were subcontractors to Westingcorp Zambia. The references to Westingcorp Zambia (without the addition of the word “Limited”) must be seen against the evidence of Mr and Mrs Roberts that they considered Westingcorp Zambia as the Zambian office of the defendant.
There is evidence of loose and imprecise language when reference was made to Westingcorp Zambia. Mr Ryan Bosch committed the solecism of referring to it as the defendant’s Zambian office. The advertisement, exhibit E, presumably placed by Westingcorp Zambia, referred to the Zambian office of Westingcorp Power Industries which had a head office with a Pretoria telephone number. The short term employment contracts received by the plaintiff from Mr Mulenga were on letterheads of the defendant. It may be that Mr Mulenga had no authority to sign such contracts on behalf of the defendant. The fact is that they were supplied to the plaintiff for use in Zambia. They do not support Mr Bosch’s assumption that Mr Roberts, in his dealings with Mr Mulenga, must have realized that Westingcorp Zambia was a separate corporate entity.
It is true that Mrs Roberts could have gathered from Westingcorp Zambia’s reconciliation, C18, that it was a company with limited liability. The document must, however, have been supplied, at the earliest, at the end of January 2005, well after the conclusion of the contract.
It is indisputable that the negotiations between the plaintiff and the defendant started on the footing that the defendant would be the contractor and the plaintiff the sub contractor. It was on that basis that the plaintiff submitted a quotation, and the defendant, adopting and adapting the quotation, submitted a tender.
When Mr Roberts was informed that the tender had been accepted he was not informed of the request that the order be placed with Westingcorp Zambia. Whilst he was in Zambia on his preliminary visit, the possibility of Westingcorp Zambia being the contractor was not on the cards.
If a contract with the plaintiff came into being even before 19 November 2004 as contended by the defendant, it could therefore only have been a contract between the plaintiff and the defendant.
It made commercial sense that there should have been a contractual relationship between the plaintiff and the defendant whilst an order was placed with Westingcorp Zambia. By requesting the Mine to place the order with Westingcorp Zambia, the contract was secured from a political point of view. The contractual relationship between the plaintiff and the defendant would give the plaintiff the comfort that it was dealing with a known and trusted entity.
On the probabilities it is obvious that if it had been made clear to the plaintiff that it had to look to Westingcorp Zambia for payment, it would have required some sort of assurance from the defendant, probably nothing less than a suretyship.
There is no evidence that Westingcorp Zambia had any substance. It had no technical resources. All the Westingcorp work it had done previously was executed by the defendant.
I can only assume that the reason why Mr Peter Bosch refrained from informing Mr Roberts of the request of the Mine to place the order with Westingcorp Zambia is that he accepted that the defendant was liable in any event and that he found it unnecessary to raise an issue which would inevitably have led to the defendant being obliged to provide security if it wanted the plaintiff to perform the work. The defendant really had no choice because it did not have the resources to perform the contract itself.
I may add that it is unlikely that having submitted the tender to the Mine, the defendant could have divested itself of liability towards the Mine in terms of the tender by requesting the Mine to place the order with Westingcorp Zambia.
That the defendant considered itself contractually bound to the plaintiff is confirmed by its conduct when it was pressed for payment by Mr and Mrs Roberts and Mr Roets. It never raised the issue of liability.
That there was a contractual relationship between the plaintiff and the defendant is also confirmed by the letter dated 19 November 2004 (accepting that it was not the acceptance of the quotation), the fact that invoices were sent to the defendant and that payments were made by the defendant.
The version in the summary judgment affidavit that Mr Roberts ventured into Africa on his own and directly concluded a contract with Westingcorp Zambia was devised, perhaps by someone else, because it was appreciated that the true facts would show that there was a contractual relationship between the plaintiff and the defendant that subsisted in spite of the fact that the Mine was requested to place the order with Westingcorp Zambia. To Mr Peter Bosch’s credit he was not prepared to repeat that version in court.
For all these reasons I am of the view that the probabilities show that there was a contractual relationship between the plaintiff and the defendant that endured. There was no serious dispute that if that was the case the plaintiff would be entitled to the amount claimed.
The following order is made:
Judgment is granted in favour of the plaintiff in an amount of R1 240 763.47 with interest thereof at the rate of 15.5% per annum as from 15 June 2005.
The defendant is to pay the plaintiff’s costs.
JUDGE OF THE HIGH COURT
HEARD ON: 5, 6, 7 AND 8 JUNE 2007
FOR THE PLAINTIFF: ADV BRAND
INSTRUCTED BY: SMITH INC
FOR THE DEFENDANT: ADV LINDEQUE
INSTRUCTED BY: HACK STUPEL AND ROSS
DATE OF JUDGMENT: 13 JUNE 2007