Afgri Bedryfs Beperk v Van De Venter (CA 6/2007) [2007] ZANWHC 70 (1 November 2007)

IN THE HIGH COURT OF SOUTH AFRICA

(BOPHUTHATSWANA PROVINCIAL DIVISION)

CASE NO.: CA 6/2007

In the matter between:-

AFGRI

BEDRYFS BEPERK Appellant

and

SUSANNA DOROTHY VAN DEVENTER Respondent

JUDGMENT

MAKGALE AJ

INTRODUCTION

[1] This is an appeal from the district court. The Appellant (the Plaintiff in the court a quo) instituted an action against the Respondent (the Defendant in the court a quo) for the recovery of money presumably paid to the Respondent on the mistaken but bona fide assumption that it was due. The action is, therefore, based on undue enrichment. The court a quo dismissed the action with costs including the costs for counsel.

BACKGROUND

[2] The Appellant is a company which conducts the business of selling agricultural products and materials to farmers on credit. After harvesting their crops, the debtors would then deliver them to the Appellant who would then credit them to the value of the crop actually delivered. When a farmer has delivered crops worth more than what he/she owes to the Appellant, a credit would be registered in his/her favour. That money may either be kept to be used for the farmer’s future purchases or be paid out to the creditor.

[3] The Respondent is the member of the Van Deventer Trust, which is involved in agricultural activities. She is married to Mr J.L. Van Deventer out of community of property. It has an active account with the Appellant. She had taken things on credit from the Appellant and paid back through cheques and agricultural produce.

[4] The amount of R97 287,06 had since 25 October 2002 until 27 August 2003 been reflected in the Appellant’s books and in particular on the account of the Respondent as a credit to the Respondent and which had to be paid to her.

[5] At the trial of the matter it became common cause and the issues between the parties became crystallised and had become crisply as follows:

a) that on 27 August 2003 the Appellant made a payment of R97 287,06 into a personal account of the husband, who happened to be a man of straw;

b) that the Respondent and not the husband had an account with the Appellant which;

c) that in this case agency is not an issue as the husband was not appointed an agent to the Respondent.

[6] Subsequent to payment being made to the husband, it occurred to the Appellant that the said amount was erroneously entered as a credit into the Respondent’s account. The Appellant therefore claims for recovery of the money as it was not supposed to be paid out.

[7] At the trial, the Appellant argued and witnesses for the Appellant indicated that under the circumstances of this case, payment to the husband was or could only have been effected on instruction of the Respondent because as an account holder she was the person they would talk to regarding the account into which these funds had to be transferred. The Appellant’s records in fact show that she was spoken to by a Ms Botha, and that she told Ms Botha that the money be deposited into the account of the trust.

[8] After close of the Appellant’s case the Respondent did not testify and closed her case. The Respondent successfully moved for dismissal of the Appellant’s claim on the basis that the Appellant had not made out a case against the Respondent.

THE ISSUE

[9] (a) The Appellant’s claim is based on a common law action known as condictio indebiti which allows the payee to recover the money paid to another person under a mistaken belief that it was owing. The central question under the circumstances would basically be whether the person sued, such as the Respondent in this case, was enriched by payment of the money in question.

(b) In this matter, payment was made into the bank account of the Respondent’s husband. The key question is whether or not the Respondent, to whom payment was apparently due, had authorised that that payment be made into her husband’s account instead.

THE LAW

[10] Condition indebiti is an enrichment action which is open to the Appellant as in this case where payment has been made to the Respondent under a mistaken or erroneous belief that it was owing. In order for the Appellant to succeed, it is required that such a mistake be excusable and that the Appellant must prove that its estate was impoverished and the Respondent’s estate enriched by payment under the erroneous belief that it was due.

[11] It is not necessary that the Respondent be the actual recipient of the payment. If payment is made to her agent or a person nominated by her as the recipient, then the action would be against the Respondent. For this reason, if payment is made to (a third party) the husband on the instruction of the Respondent, then the action of recovery would be against her.

[12] The error which the Appellant relies on should either be an error of fact or of law or a blend of both. Such an error should however be excusable. Whether an error is excusable or not depends on circumstances of each case. However, if the error is evidenced by slackness leading to the payment being made by mistake, the court would not grant protection to the likes of the Appellant.

[13] The parties have agreed that a party who alleges the existence of a fact bears the onus of proof and both counsel submitted that “in civil cases the fundamental question is still whether the party who bears the onus has discharged it.” This is done by adducing evidence.

APPLICATION OF THE LAW TO THE FACTS

[14] The Appellant led evidence of three witnesses, the essence of which is summarised hereunder. There is clearly no direct evidence that the Respondent instructed the Appellant to pay to her husband the money which would otherwise have been payable to her.

[15] In the absence of direct evidence, the Appellant has asked the court to draw a more probable inference from the competing inferences which the court may draw from the following facts:

1. On realising that there was a credit in the account around 25 October 2002, the Appellant contacted the Respondent through a cellular phone number which appears in their records. She instructed the Appellant that the money be paid into the account of the Trust. For some reason this payment could not go through. Consequently the account remained to reflect a credit;

2. On 31 March 2003 the Appellant again phoned the Respondent and the instruction was given by the Respondent to the Appellant that the money be deposited into the Van Deventer Trust (the trust) account. For some reason deposit could not be effected and the ledger remained in credit.

Up to the 31 March 2003 it appears to be common cause that communication was with the Respondent and this was confirmed by contemporaneous notes effected by a Ms Botha who left the employ of the Appellant by July 2003.

3. After the unsuccessful attempt to transfer funds into the trust account, nothing appears to have happened, according the ledger which had remained in credit. There are no notes of what had happened to the ledger and no indication exists as to who was handling this ledger until the amount was paid out into the husband’s personal account on 27 August 2003.

4. Immediately prior to the 27 August 2003, there were two attempts to pay out the money and there is no evidence let alone notes of who might have been involved in those failed transactions.

[16] The more probable inference then, which the Appellant requires the court to draw, is that the Respondent had instructed the Appellant to paying to the husband’s account as the Appellant could not in terms of its policy communicate with anyone but the holder of the account who was the Respondent and that the Respondent was enriched as a result.

[17] The Appellant contended that the most compelling reason for the court to draw the inference that the Respondent must have instructed the Appellant to pay to the husband is that the Respondent did not testify to rebut, in the words of the Appellant, prima facie evidence made out by the Appellant’s witnesses.

For the court to find whether or not the Appellant had indeed made out a prima facie case the court must be satisfied that the Appellant has gone as far as to produce evidence which is of such a probative value that if unanswered, it would justify a reasonable court finding for the Appellant on matters in dispute notwithstanding the fact that the onus rested on the Appellant. See Geoghegan v Pestana 1977 (4) SA 31 (TPD) at 34-B.

[18] In Hasselbacher Papier Import and Export v M V Stavronla, it was held that failure to reply does not by itself prove the Appellant’s case. This is so particularly when one looks at the fact that the evidence indicates that the Respondent gave Ms Botha the instruction to pay on 31 March 2003.

[19] It does not appear from the Appellant’s records of any of its witnesses that the Respondent ever rescinded the instruction to pay to the trust account nor is there any indication that there was any further communication with the Respondent regarding the payment after 31 March 2003.

[20] What, according to the Appellant, is also very significant is that whenever the Appellant phoned the Respondent about the money in question she would refer the Appellant to her husband. The Respondent is said to have said, “moet dit nie met my bespreek nie, bespreek dit met my man”.

[21] This is a factor on the strength of which the Appellant submitted that the court should find in its favour by inferring that the Respondent was thereby instructing the Appellant to deal with her husband even wit respect to the account into which to pay the money. Meaning that whatever response her husband would give the Appellant, would be according to the instructions she had already given to him.

[22] It was contended on behalf of the Appellant that the referral of the issue to the husband could not have been only after funds had been transferred into the account of the Respondent’s husband, but it must have happened even before the transfer of funds had taken place. This cannot be correct because what appears from the Appellant’s records is that the Respondent herself instructed that money be paid out to the trust. That is the only recorded instruction about where the money was to be paid. The Appellant has not shown that that instruction was somehow changed by the Respondent herself. The only logical conclusion to arrive at should be that the discussions about the money were diverted by the Respondent to her husband after payment was made to the husband, but not before. This would also explain why the Respondent’s husband approached his own consultants and acknowledged indebtedness and attempted to settle the matter on certain concrete terms. The Respondent’s attitude has basically been, ‘this has got nothing to do with me’.

[23] The question that needs to be answered is whether the Appellant has made out a prima facie case that the Respondent gave instructions to the Appellant to pay the money into her husband’s account. As I stated above, the recorded evidence before court from which the inference should be drawn is that the Respondent told Ms Botha to transfer the money in question into the account of the Trust on 31 March 2003. There is no evidence that instructions were ever changed by the Respondent. The Appellant has failed to say who of its employees transferred the money in question into the husband’s account and on whose instructions. The Appellant has also failed to call the person(s) involved in that transaction or to explain why such a person(s) was not called. Instead they were able to explain why the husband could not be subpoenaed and why Mr van der Merwe, the husband’s consultant, could not be called. They have failed to explain their own actions which resulted in the loss they are now seeking to recover.

[24] The inference to be drawn from the above facts is that such instruction was not given by the Respondent.

[25] It is clear from the record of the court a quo that the Appellant’s estate had become impoverished by the payment to the husband. Yet the absence of evidence justifying the court to infer that the instruction to pay into the account of the Respondent’s husband was given by the Respondent makes it untenable for the court to find that the Respondent was indeed enriched by the payment. The slackness on the part of the Appellant by (i) not keeping proper notes regarding how it came about that payment be made into the husband’s account, particularly around the time critical to the payment and (ii) persisting on more than four occasions and eventually making payment without detecting that such payment would be in error, in that it is not even due, leaves the court satisfied that this is not a case where the facts justify that this court accord the protection founded on condictio indebiti to the Appellant. See Willis Faber Enthoven (Pty) Ltd v Receiver of Revenue (supra) at 224E-F.

[26] The court therefore concludes that the Appellant has not made out a prima facie case that the Respondent had anything to do with the money in question being deposited into her husband’s account, thus justifying an order by this court in favour of the Appellant.

[27] The remaining question as to whether or not it be found that the Respondent was enriched by the payment erroneously made under a bona fide belief that it was owing, falls off since it has not been proven that she had anything to do let alone anything to benefit from the money being paid into her husband’s account.

[28] The appeal is dismissed with costs.

___

M.M. MAKGALE

ACTING JUDGE OF THE HIGH COURT

I agree, and it is so ordered.

_____

M.T.R. MOGOENG

JUDGE PRESIDENT OF THE HIGH COURT

APPEARANCES

DATE OF HEARING : 19 OCTOBER 2007

DATE OF JUDGMENT : 00 NOVEMBER 2007

COUNSEL FOR APPELLANT : ADV S. JOUBERT

COUNSEL FOR RESPONDENT : ADV ELS

ATTORNEYS FOR APPELLANT : VAN ROOYEN TLHAPI WESSELS INC.

ATTORNEYS FOR RESPONDENTS : SMIT STANTON INC.

(Instructed by BOSMAN & BOSMAN)