MM Moloto Properties (Pty) Ltd v Municipality of Lephalale (32147/12) [2015] ZAGPPHC 752 (27 August 2015)

IN

THE HIGH COURT OF SOUTH AFRI CA

(GAUTENG DIVISION, PRETORIA)

27/8/15

Case Number: 32147/12

NOT

REPORTABLE

NOT

OF INTEREST TO OTHER JUDGES

In the matter between:

MM MOLOTO PROPERTIES (PTY)

LTD

Plaintiff

and

MUNICIPALITY

OF LEPHALALE Defendant

JUDGMENT

POTTERILL J

[1] The plaintiff initially issued summons in the amount of R203 803.03 plus interest and costs for work done for the defendant to complete a project known as the Witpoort Storeroom and Ablution Facilities. An amount of R48 42 2.17 was the balance payable in terms of the original work. The amount of Rl55 3 80.8 6 constituted extra work done to complete the project in accordance with established building standards. The plaintiff in its particulars of claim averred that the agreement between the parties was partly written and partly oral. The original scope of the work was contained in X2, a sketch. X3 reflected the quantity surveyor's report. The plaintiff applied for summary judgment and the defendant was ordered to pay the amount of R48 42 2 .17 and leave was granted to defend pertaining to the extra work of Rl 55 380.86. The plaintiff pleaded in the alternative that:

"In the event that the Honourable Court finds that it was not a material, alternatively tacit, further alternatively implied term of the agreement that the Plaintiff had to complete the extra work as pleaded in paragraph S.S of the particulars of claim then the Plaintiff pleads as follows in the alternative to paragraph S.S to S. 6 (paragraph 12).

The Defendant was enriched to the detriment of the Plaintiff in the amount of RISS 380.86, as set out in par. 8.2 and as a direct result the Plaintiff was accordingly impoverished. (paragraph 13)

The receipt of the goods and or services by the Defendant from the Plaintiff amounts to the enrichment of the Defendant which is unjustified. (paragraph 14)"

[2] The defendant pleaded that no partly oral agreement was concluded and that annexure X1 was not a formal agreement between the parties. The defendant pleaded that the express and material terms of the agreement for the completion of the project were provisionally set out in X. X1 was subject to the parties signing a separate Service Level Agreement and the scope of the work was set out in the Scope of Contract clause as set out in the signed Service Level Agreement. The defendant denied that X2 set out the original Scope of Work. The defendant pleaded that the plaintiff did not perform in terms of the specifications of the main project in accordance with the Bid document. X3 was merely a quotation of the bill of quantities for work not being completed as per the Scope of Work. In the alternative the defendant pleaded that the plaintiff had failed to hand over the completed project. Paragraph 9 .1 of the plead reads as follows:

"9.I The defendant denies that it was enriched to the detriment of the plaintiff in the amount of RISS 380.86 as claimed or at all, and further denies that plaintiff was ever impoverished at the expense of the defendant, as no extra work had been performed and to that extent, plaintiff is called to the proof thereof. "

The defendant instituted a counterclaim for the amount of R3 2 074.2 5 for breach of contract because the plaintiff failed or neglected to build to completion by the termination date of 4 October 2011. It was further pleaded that the plaintiff neglected to complete the necessary and useful essentials fit for the purpose of the project.

[3] The matter was set down for trial and was allocated for two days before this court. Upon the parties introducing them to me in my chambers counsel for the defendant conceded that the extra work was in fact done. This admission was a surprise to the plaintiff's counsel as he had reserved the quantity surveyor as a witness. This would of course curtail the trial and I requested them to discuss what exactly was admitted and which witnesses could be excused.

[4] The plaintiff in court then placed on record that it was now common cause that the extra work was done, and that the quantum of the extra work is indeed the amount of R155 380.86. The defendant also informed the court that the defendant withdraws its counterclaim.

[5] Counsel for plaintiff then argued that with these admissions the plaintiff must be successful on their alternative claim for enrichment without leading viva voce evidence. This is so because on the pleadings there was no defence to this alternative claim. It is not denied that the

defendant was enriched, because they have a completed ablution block and storeroom. The plaintiff is impoverished in that it provided services and materials without payment. It is common cause that the defendant's enrichment was at the expense of the plaintiff and the enrichment was unjustified or sine causa. On behalf of the plaintiff it was thus argued that the condictio indebiti is applicable and is also used to reclaim performance made in terms of an invalid contract if invalidity is due to failure to comply with prescribed formalities.

[6] Counsel for the defendant submitted that a condition or an element of enrichment is that the enrichment must be to the benefit of the defendant. He could not provide the court with case law to support this submission and requested that the matter stand down until the next day. I refused such a long adjournment because this was pleaded and counsel was supposed to be prepared on this plea. I let the matter stand down for three hours.

[7] Counsel for the defendant then admitted there was no such requirement. The court then enquired from counsel what the defendant

pleaded to the plaintiff's alternative claim of enrichment. He could not answer the court and the matter again had to stand down.

[8]

8.1 When the matter proceeded counsel argued that viva voce evidence should be led because there is a different set of rules when a defendant is a state

organ. An organ of state can only procure contracts within a set of rules and it can never be done orally.

8.2 The court cannot isolate the plea to only consider the alternative claim of the plaintiff from the rest of the plea and the plea must be read in totality; paragraphs must not be read in isolation. Enrichment can never be a cause of action against a state organ; for example if a person illegally occupied a piece of land and erected a building it would be ridiculous to grant a claim for enrichment for the building.

8.3 Although estoppel is not relevant the same principle applicable to pleading estoppel against an organ of state is applicable to the claim of enrichment. The matter must thus proceed on viva voce evidence.

[9] Pleadings in a civil matter play an important role. The plea is the answer to the plaintiff's claim. The purpose of pleadings is to clarify the issues between the parties. On the pleadings as they stand there is no defence to the alternative claim rendering the leading of viva voce evidence obsolete. This is so because unjust enrichment is denied because no extra work was done. This denial is now admitted. The

reason for the defence to the claim has thus fallen by the wayside. In Kudu Granite Operations (Pty) ltd v Caterna Ltd 2003 (5) SA 193 (SCA) at paragraph [21 ] the court found the following:

'[2I] A presumption of enrichment arises when money is paid or goods are delivered. A defendant then bears the onus to prove that he has not been enriched: De Vos (supra 2nd ed at 183), quoted with approval in African Diamond Exporters (Pty) ltd v Barclays Bank International Ltd 197 8 (3) SA 699 (A) at 7!JG-H."

Where it is common cause that the plaintiff did deliver goods and services to the amount as claimed the defendant has not fulfilled its onus to prove that it has not being enriched. This is so because it admits the quantum and in fact that the extra work was done.

[10] The plea, read as a whole, strengthens the plaintiff's argument that the plaintiff is unduly enriched. The defendant avers that the extra work was not done in accordance with the state organ's practice of receiving a further contract and is thus invalid. Reading the plea as a whole the plaintiff did do the work at its expense, i.e. was impoverished. The defendant now has an ablution block and store; thus enriched and the defendant has no defence on the papers thereto. There is a causal connexion between the enrichment of the defendant and the impoverishment of the plaintiff. The enrichment of the defendant must be unjustified or sine causa if there was no contract for the extra work; then the enrichment is sine causa. In Glenrand MIS Financial Services (Ply} ltd v Van den Heever NO [2013] 1 All SA 511 (SCA) at paragraph [16 ] the court found as follows:

"[16] The respondents also claim payment of the sum of RSO million from Financial Services on the basis of unjust enrichment. Although there is no general action based on enrichment in our law, it is generally accepted that for enrichment liability to arise there are a minimum of four requirements, namely: ( 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 of the defendant must be unjustified or sine causa. "

On the pleadings there is no defence to the presumption of enrichment where goods and services were provided.

[11] In Legator McKenna Inc v Shea [2009] 2 All SA 45 (SCA) the court found that a party may reclaim performance made in terms of an invalid contract if invalidity is due to failure to comply with the prescribed formalities. The defendants

are

confusing invalidity with unlawfulness. An unlawful occupier of property as used by the example by defendant's counsel could never sustain a claim for enrichment, however the action before us can be used to claim performance on a void or invalid contract as the defendant has pleaded.

[12] Pertaining to the costs the defendant's counsel called the matter to stand down for three hours and 15 minutes which resulted in the matter having to proceed today. The defendants are thus also ordered to pay the costs of today until 12:00.

[ 13 ] I accordingly make the following order:

13.1 The defendant must pay the plaintiff the amount of R155 380.8 6 .

13.2 The defendant must pay interest on the amount of R155 3 80.8 6 from date of demand being 10 April 2012 at a rate of 15,5 % per annum.

13.3 The defendant must pay the costs, the costs to include the first day of trial as well as the costs of trial until 12:00 of the second day.

_______

S.

POTTERILL

JUDGE

OF THE HIGH COURT

CASE NO: 3 2147 / 2012

HEARD ON: 2 6 August 2015

FOR THE PLAINTIFF: ADV. C.J. WELGEMOED

INSTRUCTED BY: Thapelo Kharametsane Attorneys

FOR THE DEFENDANT: ADV. M.M. THIPE

INSTRUCTED BY: M G Phatudi Incorporated

DATE OF JUDGMENT: 27 August 2015