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IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

Case number:  10906/2013

Date: 4 December 2018

In the matter between:

STEENKAMPSKRAAL HOLDINGS LTD                                                            PLAINTIFF

and

ERES ENGINEERING PROJECTS (PTY) LTD                                    FIRST DEFENDANT

Formerly READ RUBY TRADING (PTY) LTD

VINCENT RAPHAEL MORA                                                           SECOND DEFENDANT

JAN ALBERT DREYER                                                                       THIRD DEFENDANT

JUDGMENT

 

TOLMAY, J:

INTRODUCTION:

[1] This matter concerns the Steenkampskraal Mine (the mine) situated in the Northern Cape. The Plaintiff entered into a material and mineral lease agreement with the South African Government. The lease expires in 2020. Plaintiff was previously known as Rare Earth Extraction Company Limited (Rareco).

[2] In order to understand the context to this matter it is appropriate to consider the background which ultimately led to the parties entering into two agreements which formed the basis of the dispute between the parties. During the 1950’s and 1960’s mining and prospecting were done for certain radio-active elements by Anglo American (Anglo). These radio-active elements are obtained from a mineral known as Monazite. The mine was closed in 1964, but no rehabilitation was conducted. During the 1980’s and 1990’s a demand for, what is referred to as rare earth elements developed. These elements are vital for use in modern day electronic devices, and are found in Monazite crystals, which were previously mined at the mine, together with certain radio-active elements such as Thorium.

[3] Rareco investigated the feasibility of restoration and rehabilitation of the mine, in order to bring it back into operation. Amongst other, the processes involved, in doing so and in particular the rehabilitation, are referred to as the project.

[4] This matter relates only to two agreements relating to the project, namely the main contract and the bulk earthworks agreement, which will be dealt with comprehensively later on. These contracts were awarded to the First Defendant (Eres). The main contract was for the refurbishing of the existing decline shaft. The bulk earthworks contract was the preliminary earthworks contract.

[5] During 2011, the shares of Rareco were acquired by a Canadian company known as Great Western Mineral Group (GWMG).

[6] During early 2011, Rareco with GWMG went in search of someone to take control of the entire project at the mine. A post was created for a project director and on 28 March 2011, the Second Defendant (Mora) was appointed in this position.

[7] The main contract was awarded to Eres during late May 2011 and the bulk earthworks contract was awarded to Eres, during April 2012. The Third Defendant (Dreyer) was at all relevant times the sole director of Eres.

[8] Rareco claimed rescission, alternatively, cancellation of the agreements, as it was alleged that both these contracts were awarded to Eres, as a result of the bribery of Mora by Eres and Dreyer. With regards to the main contract, Rareco alternatively averred that Eres failed to complete the main contract and that the work that was completed was of poor quality and not fit for purpose, however, the evidence led in this matter was limited to the allegation of bribery and as far as the work done by Eres was criticized, it was limited to aspects that related to the alleged bribery.

[9] Rareco’s case was that as a result of the bribery, Eres was appointed and the agreements were entered into and false and/or overpriced variation orders and invoices were paid by Rareco to Eres.

[10] After several amendments, Rareco claimed the following relief from the Defendants:

1. An order declaring that Rareco had lawfully rescinded, alternatively, cancelled both the main and the bulk earthworks contracts;

2. An order declaring that Rareco need not separate and submit its alternative claim for rescission, alternatively, cancellation and damages for resolution by way of adjudication of the Federation Internationale des Ingenieures (FIDICS) conditions;

3. Payment of the amount of R106 177 443-83 (one hundred and six million, one hundred and seventy seven thousand, four hundred and forty three rand and eighty three cents) together with interest, alternatively payment of the amount of R61 270 675-83 (sixty one million, two hundred and seventy thousand, six hundred and seventy five rand and eighty three cents) together with interest;

4. An order directing Mora to account for all benefits received by him from Eres and/or Dreyer;

5. An order that Mora disgorge all benefits received by him from Eres and Dreyer, including but not limited to an amount of R5 125 847-10 (five million, one hundred and twenty five thousand, eight hundred and forty seven rand and ten cents);

6. Rareco furthermore sought an order declaring that Dreyer was personally liable to Rareco, jointly and severally with Eres;

7. Costs on attorney and client scale against all the Defendants.

[11] Eres instituted two counterclaims against Rareco. The first counterclaim was divided into two parts. The first part was for an amount of R17 075 577-32 (seventeen million, seventy five thousand, five hundred seventy seven rand and thirty two cents) for work performed subsequent to 31 May 2012, but before 6 August 2012. The second part related to invoices submitted after 6 August 2012, to the amount of R15 192 101-60 (fifteen million, one hundred ninety two thousand one hundred and one rand and sixty cents). The second counterclaim related to the bulk earthworks contract for which Eres claimed:

a. Payment of invoice ER 201114 in the amount of R3 451 824-48 (three million four hundred and fifty one thousand, eight hundred and twenty four rand and forty eight cents);

b. Payment of invoice ER 201169 in respect of standing time in the sum of R7 207 878-00 (seven million two hundred and seven thousand eight hundred and seventy eight hundred rand); and

c. Payment of 10% of the work not executed being R1 099 732-78 (one million ninety nine thousand seven hundred and thirty two rand and seventy eight cents).

[12] The trial commenced during May 2017, at this point Mora was firmly in the same corner as Dreyer and Eres and denied all allegations of bribery and of any wrongdoing. The trial did not finish within the allocated time and recommenced during January 2018. In total the trial lasted seven weeks. On the day that the trial was supposed to start in January 2018, the Court was informed that Mora was now going to testify on behalf of Rareco. As a result of this, the dynamics changed completely. Rareco discovered new documents, which Mora was in possession of and which were not discovered previously. Mora was apparently  overcame by his conscience and decided to come clean and therefore approached Rareco’s representatives.  However, Rareco instituted criminal charges against Mora, when it became aware of the tainted payments made by Dreyer to him and people related to him. Mora was at one point also arrested in relation to these allegations, and the Court was informed that Rareco undertook to withdraw charges against him, as a result of him giving evidence on its behalf. An application was also brought by Rareco to withdraw the claims against him in this matter. I have no doubt that these events contributed to Mora’s decision to testify as he did, and not merely a sudden ” Damascus experience”. The trial was ultimately finalised on 27 June 2018, when arguments were heard.

 

THE MAIN CONTRACT

[13] During 2011, Rareco appointed SRK Consulting (South Africa) Proprietary Limited (SRK) to assist in the preparation of tender documents, the facilitation of site visits, and the tender adjudication process, in respect of the rehabilitation and reinstatement of infrastructure and services at the mine. SRK invited tenders on  14 April 2011.

[14] On 5 May 2011, Eres submitted a tender in response to SRK’s aforesaid invitation. . On 24 May 2011, Eres delivered a revised tender, and on 30 May 2011 Rareco approved the revised tender. On 3 June 2011 Rareco, represented by a director, Trevor Blench, signed the main contract which consisted of the revised tender and a standard form contract, published by the FIDICS conditions. On 5 August 2011, the aforesaid main contract was signed by Dreyer on behalf of Eres.

[15] The main contract was for a fixed scope of work and the contract price was set at R31 670 00-00 (thirty one million six hundred and seventy thousand rand). Provision was made for variations and it was agreed that all variation costs would be charged at cost plus 12.5%. Rareco was to pay 30% of the approved budgeted contract price, at the commencement of the project and was also required to pay each month an amount forecasted on receipt of a certificate issued by Eres. Reconciliation would be done each month to determine the actual expenditure.

[16] SRK acted as Rareco’s representative in terms of the agreement. Mora was responsible for the approval of all changes of scope in the work to be executed and any potential cost over-runs were to be communicated by Eres to Mora.

[17] The agreement also stated that all disputes between the parties were first to be adjudicated and then arbitrated, as stipulated in the FIDICS conditions.

 

THE BULK EARTHWORKS CONTRACT

[18] On 5 April 2012, Rareco, represented by David Kennedy, who was the CEO at the time and Eres, represented by Dreyer, entered into the bulk earthworks contract.

[19] The written terms of the bulk earthworks contract were comprised of  the standard FIDICS conditions and a tender submission by Eres dated 28 March 2012.

[20] Eres was appointed to perform the construction work and to render the related services to facilitate the installation of a conveyer belt system, from the mine to the processing plant at the mine. The contract price was R12 674 630-00 (twelve million six hundred and seventy four thousand six hundred and thirty rand) plus VAT and payable as follows:

a. a deposit of R2 500 000-00 (two million five hundred thousand rand) inclusive of VAT; and

b. the balance over a period of two months in accordance with invoices of Eres delivered over a two month period, based on the following dates and amounts:

i. 15 May 2012, R6 104 778-00 (six million one hundred and four thousand seven hundred and seventy eight rand) excluding VAT; and

ii. 15 June 2012, R4 069 852-00 (four million sixty nine thousand eight hundred and fifty two rand) excluding VAT.

[21] Rareco was to make payment of invoices delivered to it within 15 days of receipt.

 

THE AWARD OF THE TENDERS

[22] Rareco alleged that it was entitled to rescind, alternatively, cancel the agreements between itself and Eres, because of the fact that Mora was bribed by Dreyer to act in the interest of Eres, in breach of his fiduciary duty to Rareco.

[23] In the particulars of claim Rareco set out the ways in which Mora allegedly breached his fiduciary duty, but importantly, also stated that the breach was not limited to those mentioned, as Rareco had not been able to establish the full extent and detail of the bribes.   Due to the nefarious bribery, it is to be accepted that the victim found it extremely difficult to determine the full extent, nature and form in which the bribery manifested.  What seemingly alerted Rareco to the alleged bribery, was the discovery of certain payments made by Eres and/or Dreyer to Mora and people connected to him.

[24] It became common cause that certain payments were indeed made, but some, more specifically certain cash payments, remained in dispute. Eres and Dreyer, and initially also Mora, however, said that the payments that were made, were bona fide and not related in any way to the contracts concluded with Rareco and did not form part of any bribery.

[25] Apart from the payments it was also alleged by Rareco that Eres and/or Dreyer, acted in ways that benefitted Mora and the people connected to him, these acts, so it was alleged, also formed part of the bribery. Most of these acts became common cause during the course of the trial, but, Dreyer said that these acts were bona fide and did not form part of any bribery.

[26] Obviously, the fact that Mora decided to testify on behalf of Rareco had a catastrophic effect on Eres and Dreyer’s case. Mora and Dreyer’s evidence was of paramount importance, for that reason I deal with their evidence primarily and refer to the evidence of the other witnesses, only in so far as it is relevant to the conclusions that the Court arrived at. It must also be noted that due to the sheer extent of the evidence led it is impossible to deal with all the evidence led.

[27] According to Mora, he met Dreyer for the first time during 2007/2008. They discussed the possibility of Mora introducing potential clients to Dreyer; in return he would receive a payment for the introduction. He recalled the percentage promised as being 10% of the profit. During early 2010 they explored the possibility of working on a project, which, however, never materialised. Mora testified that he made contact with Dreyer in April 2011, after his appointment as project director at Rareco and once he became aware of the date on which Rareco’s tender would go out, he advised Dreyer accordingly.

[28] Mora said that he made Rareco aware of the existence of Eres. He did so, firstly because of his relationship with Dreyer and secondly because Robbie Louw, a director of Rareco’s at the time, expressed a view that a smaller company should be appointed.

[29] He also testified that there were two conversations between him and Dreyer, prior to the submission of the tender, one in person and one telephonically, during which it was agreed that he would receive R2 million in exchange for making Dreyer the preferred bidder.

[30] Four people were involved in the process of considering the tenders submitted on behalf of Rareco. They were Kenneth Mahuma and Steve Owen from SRK and Mora and Robbie Louw. Rareco did not call Mahuma or Owen to testify.

[31] During February 2011, before Mora was appointed as project director, LTA Grinaker submitted a tender for the temporary refurbishment of the decline shaft at the mine, when the process of tendering started, they were however late in submitting the tender and was disqualified for that reason.

[32] On 9 April 2011, Mora sent Owen, who was employed by SRK an email to request an electronic copy of the tender submitted by LTA Grinaker. On 11 April 2011, Owen sent an email purporting to attach the electronic files requested. On the same day Mora forwarded the email, including the full email chain to Dreyer. Dreyer responded on the same day saying “No attachments (tender information)”.

[33] On 12 April 2011, Mora sent another email to Owen & Wertz of Rareco apologising for the mail that they have received, that was copied to Dreyer, which included as an attachment the LTA tender. He claimed that he had recovered it before it got to Dreyer. Dreyer denied ever having received the tender documents. He also said that it could in any event not have assisted him in any way.

[34] After Eres submitted its first tender on 10 May 2011, Robbie Louw, a director of Rareco compiled a detailed commentary in response to  Eres’s tender application, which he sent to Mora. Mora forwarded the email, which contained these commentary notes to Dreyer on 14 May 2011. He stated in this email “keep it between us”. Dreyer on 15 May 2011, forwarded this email to Rain Mudadi and Bevan Jones, employees of Eres and described it as ”leaked out to me”.  On 16 May 2011, Owen on behalf of Rareco invited Eres to attend a tender clarification meeting. RSV Enco submitted its first tender on 10 May 2011. It was the only competing tender. At the tender clarification meeting, which was held on 19 May 2011, both tenderers were asked to supply further tenders by 24 May 2011. On 18 May 2011, the day before the clarification meeting Mora sent the full version of the competing tender provided by RSV ENCO to Dreyer. During the clarification meeting both tenders were asked to adjust their tenders and to provide a so-called “cost plus” price.

[35] Mora testified that, prior to the meeting, he and Robbie Louw had agreed that, in the event that a cost plus arrangement was put in place, the ceiling would be cost plus 15%. He said that he informed Dreyer, prior to the meeting, that tenderers would be asked to tender on a cost plus basis and that the ceiling would be 15% and that Eres should come in lower than that at approximately 12.5%. Eres tendered at cost plus 12.5% and RSV Enco tendered at cost plus 15%.

[36] Robbie Louw testified that Mora introduced the idea of asking Eres to tender. Mora apparently said that he had worked with Eres before and that they did good work. Robbie Louw was in favour of appointing a small company and therefore he favoured Eres. Robbie Louw was quite clear that he objectively looked at the tenders and was not influenced by Mora. Robbie Louw independently and irrespective of what Mora’s agenda might have been, formed the opinion that Eres was the preferred bidder. The evidence was that Barry van Biljon, another director of Rareco had a different view regarding the appointment of Eres, but the evidence indicated that a number of people within Rareco had difficulty with Barry van Biljon, and there was no evidence that Mora played any role in the deterioration of the relationship between Barry van Biljon and the other role players within Rareco.

[37] On 25 May 2011, Steve Owen from SRK addressed an email to Mora, copying Mahuma and Wertz of Rareco. Steve Owen in this email expressed his view regarding the tenders and stated the reasons why he was of the view that Eres should be appointed. These reasons were:

a. Eres would complete the work in a shorter period of time;

b. Eres was cheaper;

c. additional work would be cheaper at cost plus 12.5%, as opposed to 15%;

d. Eres was keener to do the work;

e. Eres would leave the temporary winder after completion of the work; and

f. Eres had limited their P & G’s to R6 800 000-00 (six million eight hundred thousand).

[38] Mora prepared the adjudication document in which the two tenders were compared. Mora testified that the entire team from SRK had input into the document. The tenders and adjudication document were sent to the board of Rareco for consideration. It is important to note that Louw, an engineer, compared both tenders independently from Mora. Blench, an experienced business man, also compared the tenders. Steve Owen of SRK excluded the LTA Grinaker tender, because it was submitted late. Mora had no bearing on  that decision. Rareco called Brian Souter, an engineer project manager to testify regarding the adjudication document to show that the adjudication was weighed in favour of Eres. However the evidence, in my view, did not indicate that it was because of any influence by Mora that the tender was ultimately awarded to Eres.

 

ALLEGATIONS OF INFLATED PAYMENTS

[39] The initial contract sum was R31 670 000-00 (thirty one million six hundred and seventy thousand rand). When Rareco stopped payments in May 2012, an amount in excess of R106 000 000-00 (one hundred and six million rand) had already been paid to Eres. The balance of approximately R75 000 000-00 (seventy five million rand) was made up of additional work, charged for predominantly, under the so-called ECN’s.

[40] All the terms of the main contract was for a fixed price and scope of work. All changes were done by way of variation orders, which had to be approved and agreed by Mora. Rareco alleged that Mora and Dreyer colluded and adjusted the variation orders to the advantage of Eres.

[41] Rareco also alleged that Mora and Dreyer colluded to fraudulently inflate supplier invoices. Three suppliers were specifically mentioned, namely; Gloss Investments, Mincor Fabrications and Jacomars Construction.

[42] The bulk earthworks contract was awarded to Eres during April 2012.

[43] Mora testified that a company known as DRA was originally going to perform the detailed designs of certain plants at the mine. Later it was decided that Eres was going to tender for the preliminary earthworks for these plants as well. On 23 February 2012, Jaco Prinsloo of DRA sent an email to Mora, providing Rareco with figures which they stated would be a bill of quantities in respect of the preliminary bulk earthworks. Mora sent those figures to Dreyer.

[44] On 10 March 2012, Prinsloo sent Mora a detailed cost estimate for the bulk earthworks, in the total amount of R2 477 654-10 (two million four hundred and seventy seven thousand six hundred and fifty four rand and ten cents) Mora sent this information to Dreyer. The abbreviation (for your information) “fyi” appeared on the mail. On 28 March 2012 Dreyer sent his tender submissions for the contract to Mora.

[45] During April 2012, Eres was one of the companies considered for the work that would be required on the bulk earthworks contract. On 23 April 2012, Dreyer sent a copy of his tender for this contract to Mora in an email. The total amount of the tender was R77 629 252-00 (seventy seven million six hundred twenty nine thousand two hundred and fifty two rand). In the email he informed Mora that he provided the tender “without friendship cost”. He attached a schedule, setting out the breakdown of the tender and adding an amount of approximately R10 000 000-00 (ten million rand), which he described as the amount “plus friends”. These documents were not discovered by the Defendants, but were discovered by Plaintiff, after they were supplied by Mora, following his consultation with Rareco in January 2018. Mora testified that the aforesaid referred to kickbacks payable to him should Eres be awarded the bulk earthworks contract.

[46] In the email dated 23 April 2012, Dreyer also wrote “don’t mention the high civil costs of Tokkie in front of others. That is where hide (sic) some friendship”. Tokkie was the director of Gloss Investments. Mora said that he understood this to mean that Dreyer would get a value from Tokkie and add a percentage in order to pay him. Mora forwarded Eres’s tender to Rareco. Knowing that the tender had been inflated. Dreyer could not explain the aforesaid in any satisfactory manner, during his evidence and that should not be surprising as the entire tone of the emails, clearly indicate, to put it lightly, that “something was rotten in the State of Denmark”. The tender was accordingly awarded to Eres in due course.

[47] Gloss Investments was inter alia responsible for the provision and installation of the concrete footwall of the decline shaft as part of the main contract. This footwall was not part of the original scope and was therefore the subject of an ECN. ECN4, related to this and was according to Rareco’s expert quantity surveyor, Christo Fourie inflated. According to Christo Fourie the volume of concrete charged for, was enough to fill the decline shaft in its entirety. Under cross-examination, it was put that the price included amounts charged by Gloss Investments for transportation, food and accommodation for workers. It was also put to him that the unevenness of the footwall resulted in deep pockets, which required concrete to be cast to depths of between 500mm and 800mm at places. Christo Fourie’s evidence was corroborated by the evidence of Rareco’s expert, structural engineer Mr Schwiebus. Eres and/or Dreyer did not give any expert evidence to contradict the evidence of Christo Fourie and Mr Schwiebus. Dreyer, when he testified attempted to explain the overcharge, by claiming that it formed part of engineering costs, to which they were entitled as part of the 12.5% plus cost agreement. This evidence contradicted the version put during cross-examination.

[48] ECN188, related to Gloss Investments. The document indicated a capital material cost of R165 600-00 (one hundred and sixty five thousand six hundred rand), but the amount quoted by Gloss Investments to Eres was R145 600-00 (one hundred and forty five thousand six hundred rand), which amount was ultimately paid to Gloss Investments. Gloss Investments’ quotation that was discovered by the Defendants reflected the amount of R165 600-00 (one hundred and sixty five thousand six hundred rand). This gave credence to the evidence that the so-called “friendship costs” were hidden in these quotes.

[49] There were also discrepancies regarding invoices of Mincor a steel fabricator, who provided the steel required during the execution of the main contract. The invoices were not initially discovered by the Defendants, but when they eventually were, during 2017, after the matter was postponed, the invoices that were sent to Rareco for payment were 10% lower than those sent by Eres to Rareco.

[50] Bestbier testified that in each case it was the rates associated with the specific items on the mass sheet annexures that have been increased by 10%. These higher amounts were ultimately paid by Rareco. In cross-examination it was put to Bestbier that the discrepancy could be explained by way of an early settlement account. He quite correctly said that, it could not be, as it was not a reduction of 10%. Furthermore, the payment history did not indicate prompt payment at all but erratic, and sometimes late payment.

[51] It seems that the only reasonable inference is, that the quotations received from Mincor were altered and increased by 10%. It was clear that only the lower amounts were ever paid by Eres to Mincor, and only the higher amounts were ever charged by Eres to Rareco. One would have expected, if a discount as suggested by Eres existed, that Rareco would have been entitled to share in the saving.

[52] Rareco also had a problem with ECN37, which dealt with the loading bin. An item fabricated by Mincor. The loading bin was always part of the original scope of works and it was included in the tender documents sent to the tendering parties. Rareco argued that under these circumstances there was no basis for the charging of a loading bin, as an ECN, and Eres was not entitled to an additional amount in respect of the loading bin. Eres claimed a cost of R754 126-08 (seven hundred and fifty four thousand one hundred and twenty six thousand rand) from Rareco in this regard, while the value of the bin delivered to site was R539 262-01 (five hundred and thirty nine thousand two hundred and sixty two thousand rand and one cent) according to Rareco. It was put to Rareco’s expert quantity surveyor, Mr Fourie that a change had been requested by DRA, another company who was also involved at the mine, which required a change in bin size, and that the change had occurred after the cutting of the steel by Mincor. It was further suggested that Rareco was still responsible for payment of the higher amount.

[53] However, it was put to Dreyer that Steven Owen, from SRK made it clear to Dreyer in an email that the loading bin designed by Eres was too large, this was prior to the ordering of the steel for the loading bin from Mincor. Mincor sent a quote for the loading bin on 1 September 2011. Accordingly the quotation could only have been accepted after 1 September 2011. As a result it is improbable that any change in requirement motivated by DRA could have occurred between 1 and 2 September 2011. During cross-examination Dreyer said that the design of the bin changed several times, but made no mention of the change being brought about by requirements of DRA.

[54] Jacomars Construction, another sub-contractor to Eres, submitted several invoices to Eres during the course of the contract. Mrs Van Der Westhuizen, the person responsible for managing Jacamars’ financial affairs at the time, testified about ECN67, dated 29 October 2011. She had no record of an amount of an invoice in the amount of R275 000-00 (two hundred and seventy five thousand rand) or a payment from Eres in that amount. Despite this Eres claimed and received payment from Rareco in this amount under cover of ECN67.

[55] The weigh-bridge was also raised as a bone of contention by Rareco. It was common cause that it was an additional item and the valid subject of ECN45. The weigh bridge was supplied by Trek Scale Company and installed by Jedd Civils. The total cost to Eres, according to the contract was approximately R810 745-00 (eight hundred and ten thousand seven hundred and forty five rand). Mr Sessions, an expert quantity surveyor called by Rareco, gave evidence that the only supporting documents supplied were quotes from Trek Scale and Jedd Civils, in an amount of R789 245-00 (seven hundred and eighty nine thousand two hundred and forty five rand), despite that ECN45 amounted to R1 100 000-00 (one million and one hundred thousand rand).

[56] Mr Sessions was of the view that this was a significant overcharge. He was of the view that Eres was not entitled to engineering fees of R77 500-00 (seventy seven thousand five hundred rand) with regards to this ECN.

[57] In cross-examination it was put to Mr Sessions, that the reference to a weigh bridge referred to the whole area and that engineering fee was justified, as there was a considerable amount of engineering work required. Mr Sessions however said that he found it strange that all the infrastructure costs were lumped under the heading of the weigh bridge.

[58] Dreyer, despite what was put to Mr Sessions under cross-examination, suggested that the engineering fees were actually less, but that Eres also allowed for quality control and site supervision expenses. He was then referred to a procurement costing document on an Eres letterhead, that indicated that an additional amount of R290 000-00 (two hundred and ninety thousand rand) had been added to the costs of Jedd Civils and Trek Scale and included in the material component of the ECN to get to R 1 100 000-00 (one million and one hundred thousand rand). This was never put to Mr Sessions. Dreyer admitted that the additional costs had been included under the capital costs and a 12.5% mark-up had been added.

[59] The evidence shows that Eres added project management fees, drawing office fees, quality control, site supervision and a P & G contingency to bring the total to R1 100 000-00 (one million and one hundred thousand rand) on ECN45. They then continued to levy 12.5% on this inflated sum. Eres then levied R77 500-00 (seventy seven thousand five hundred) engineering fee and an administration project cost of R5 000-00 (five thousand rand) to bring the total to over R1 300 000-00 (one million and three hundred thousand rand).

[60] In respect of the company called “Work Safe” Bestbier testified that Eres charged Rareco double the amount that was set out in the corresponding purchase order. He also testified that ECN248 was a recordal of safety equipment provided by “Work Safe” to Eres. The amount recorded in the capital costs section of ECN248 under the heading “other” is R49 177-60 (forty nine thousand one hundred and seventy seven thousand rand and sixty cents). ECN248 then refers to the purchase order RUG0076, which recorded a total amount, including VAT, as being R28 031-23 (twenty eight thousand and thirty one rand and twenty three cents). The ECN is accordingly double the amount incurred.

[61] On another occasion, on 18 June 2012, Dreyer referred to future payments that would be made to Mora and stated that the balance would have to be made up in variation orders. Dreyer tried to explain that the variation orders were related to an Australian project (more about this project later). However, Dreyer could not explain why he expected that there would be variation orders in respect of that contract.

[62] Mora admitted to signing several ECN’s without supporting documents. He said he did so, because he was of the view that he could trust Eres.

[63] It may be of some consequence that Rareco in April 2014, issued summons against SRK. Summons in this case was issued during 2013. The SRK summons is predicated on the allegation that the tender was awarded to Eres as a result of SRK’s breach of their contractual obligations. In that summons there was no allegation of Mora’s involvement, however, one must also consider the fact that Rareco did not have all the relevant information at that time and some documents only came to the fore during the course of the trial. Consequently, I am of the view that no inference should be drawn based on the content of that summons

[64] During evidence Rareco also questioned certain additional work that was done between June 2011 and August 2012, especially the contract to clear the mine of bat guano. A company called Budget Waste was contracted to do this. Rareco argued that there was no justification for a payment of R1 500 000-00 (one million and five hundred thousand rand) to Eres in relation to this, as according to Dreyer’s own evidence, this work did not fall under the supervision of Eres. It was argued that the fact that Mora allowed this contract to proceed as part of the main contract, indicated that he did it as part of his agreement with Dreyer.

 

PAYMENTS MADE TO MORA

[65] Mora testified that Dreyer made two cash payments to him. The first being an amount of R60 000-00 (sixty thousand rand) which was paid on 10 August 2011, and another amount of R40 000-00 (forty thousand rand), paid on 23 August 2011.  

[66] He said that Dreyer made the cash payment of R60 000-00 (sixty thousand rand) to him at a coffee shop in Boksburg, near Dreyer’s office. The payment consisted of one hundred rand notes and was contained in an A4 brown envelope. He provided a cash deposit slip reflecting a deposit of R60 000-00 (sixty thousand rand) at the time. Dreyer categorically denied, during his evidence that such an amount was paid to Mora.

[67] Mora said that on the same day he sent an email to Blench, reminding him of Rareco’s obligation to pay Eres by 15 August. This email was forwarded to Dreyer. This email was not discovered until Mora provided it to Rareco during January 2018. I infer from this that Mora implied that he was prompted by the cash payment to remind Rareco of the due payment to Eres.

[68] On 2 September 2011, Christel De Wet, an employee of Eres, emailed Dreyer a schedule of costs allocated to the cost of the project at the mine until on or about 1 September 2011. This schedule recorded cash withdrawals for the project in the total amount of R474 000-00 (four hundred and seventy four thousand rand). The amount of cash withdrawals recorded for August 2011 was R316 000-00 (three hundred and sixteen thousand rand). During cross-examination it was put to Mora that there were no cash withdrawals from Eres’s account prior to 10 August 2011, but the email from Ms De Wet seemed to contradict this version.

[69] It is also interesting to note that Dreyer, in an email dated 3 September 2011, stated that “I need the following not to reflect on the Steenkampskraal sheet”. Below that he stated “cash withdrawals for something outside the contract that is no concern in the office (sic) for anybody else but me”. He went further and stated “We need to book it against something for myself on the project (Loan Account)”.

[70] Dreyer, during his evidence confirmed the withdrawals, but claimed that they were for renovations to his house and that of his son, for which he claimed he paid in cash. However his bookkeeper, Panaino, when asked whether Dreyer’s payments to the builders were direct payments or cash payments, stated that it was direct payments to the builders and suppliers and not cash. The evidence in my view support an inference that such a cash payment was indeed made to Mora by Dreyer.

[71] The alleged cash payment of R40 000-00 (forty thousand rand) on 23 August 2011 was, like the payment of R60 000-00 (sixty thousand rand), not originally pleaded as Mora only revealed this payment to Rareco during January 2018.

[72] Bank statements of Mora’s account showed a cash deposit of R40 000-00 (forty thousand rand) on 23 August 2011. His evidence was that this amount was paid to him by Dreyer in a brown envelope. Dreyer denied making this payment to Mora.

[73] Rareco’s counsel pointed out that an email from Mora to Dreyer dated 21 December 2011, supported Mora’s evidence. In it the following was stated “we said it was 175 u gave me 100, if you can give me the difference it would be great”. Mora testified that this email referred to the outstanding balance that Dreyer owed him pertaining to the cash payment that he should have received.

[74] During January 2018, Mora provided Rareco with a signed acknowledgment of debt (AOD), which was not previously discovered, for the amount of R175 000-00 (one hundred and seventy five thousand rand), signed on 25 November 2011. The AOD recorded that Dreyer would give Mora R175 000-00 (one hundred and seventy five thousand rand) in cash by no later than 23 December 2011. During the trial quite a few of these AOD’s between Dreyer and Mora surfaced. Dreyer said these were proof of bona fide loans, while Mora testified that it was part of the paper trail they created to mislead anyone if the truth ever came out about their relationship. All these AOD’s were signed by Mora and Dreyer. They were apparently drafted by Mora’s attorney at the time.

[75] The aforementioned AOD had a line drawn through both pages. Mora testified that the purpose of the AOD was to cover up for some of the money that Dreyer promised, to pay him. Dreyer denied in his testimony that he made this payment. Dreyer however, did not have a satisfactory explanation for Mora’s email of 21 December 2011 neither could he explain the AOD, despite admitting that he signed it.

[76] Rareco pleaded that Mora was paid R500 000-00 (five hundred thousand rand) by Eres on 28 February 2012. This payment was admitted by Eres. Eres however, pleaded that this was a loan. An AOD dated 1 February 2012, indicated that a loan of R500 000-00 (five hundred thousand rand) was made to Mora by Dreyer. On the second page of the document, it was recorded that repayment would be referenced to as “FEL” which apparently stood for “for emergency loan”.

[77] In an email dated 26 February 2012, Mora requested Dreyer to deposit the R500 000-00 (five hundred thousand rand) into his cheque account. Mora testified that the R500 000-00 (five hundred thousand rand) was part of the initial amount of R2 000 000-00 (two million rand) that Dreyer promised him as part of their agreement. He said that the AOD, which was signed by him and Dreyer, was merely a cover up and that he was never really going to repay the amount.

[78] Mora testified that he wanted to purchase a house and that he asked Dreyer whether he could get the R500 000-00 (five hundred thousand rand) as part of the R2000 000-00 (two million rand) that they agreed on as payment for his assistance to Eres. An email dated 26 February 2012, indicated that Mora asked Dreyer to pay the amount into his cheque account and not into the bond.

[79] Mora under cross-examination referred to a document setting out the payments he made to Dreyer, which was referenced as “FEL” and suggested that he was repaying a loan. Mora, however, persisted with his version. He said that re-payments he made to Dreyer were not in relation to this AOD but was for a front end loader that he bought from Dreyer.

[80] Mora also testified that R30 000-00 (thirty thousand rand) was paid by Dreyer to him by EFT. Rareco did not originally plead this payment, as it only became aware of it after the consultation with Mora during January 2018. No documents were discovered by any of the Defendants relating to this payment prior to January 2018. In January 2018, Mora supplied Rareco with an AOD dated 26 March 2012. The AOD was described as a payment for an airplane ticket for Mora’s fiancé at the time, Miss De Campos. The reference for the payment is described as “FAT” (For Airplane Ticket).

[81] Mora testified that the AOD was created as part of the cover up. He said that he was flying to China for business and that he wanted his fiancé, to accompany him. He asked Dreyer to do the booking and make the payment for him. He said that the amount would form part of the R2 000 000-00 (two million rand) that Dreyer promised him. Dreyer testified that the money was for an airplane ticket for Miss De Campos. He could not recall whether Eres actually paid the amount.

[82] An amount of R40 000-00 (forty thousand rand) was paid by Dreyer by way of EFT into the account of V G Mora. V G Mora, it transpired was Mora’s son. Rareco became aware of this payment in January 2018, when Mora informed the legal representatives of Rareco about it. Mora testified that this amount was paid into his son’s account. He said however that he opened the account and that he was the only person that could transact on this account. He could not recall the reason for this payment. Dreyer did not refer in his evidence to this payment at all.

[83] Rareco pleaded that Mora was paid the amount of R25 350-00 (twenty five thousand three hundred and fifty rand) by Eres on 20 April 2012. Dreyer admitted this payment and alleged that it was a payment for cellular phones Mora held on behalf of Eres. An email from Mora to Dreyer, dated 3 May 2012, had an attachment of invoices from Vodacom for various items of cellular phone equipment to the value of R29 123-00 (twenty nine thousand one hundred and twenty three rand).

[84] Mora in his evidence confirmed the aforesaid payment. He said that he had purchased cellular phones, and Eres paid it as it was part of the R2 000 000-00 (two million rand) agreement. He kept one and gave the others to family members. He said that Dreyer requested him to purchase it on an Eres invoice, so that Eres could get the tax and VAT refund.

[85] Dreyer testified when explaining this purchase, that there were significant communication problems on the site of the mine and Mora suggested that Blackberry phones would be able to work on the site. Not surprisingly, this suggestion turned out not to be correct. He then informed Mora that the phones did not work, and that they had been bought unnecessarily. Mora then asked whether he could keep them. He agreed on the condition that Mora signed an AOD. Mora drafted the AOD and kept the phones.

[86] Panaino, the bookkeeper of Eres, drafted a schedule (the Panaino schedule), which reflected various amounts apparently borrowed by Mora from Dreyer and/or Eres, as well as repayment dates. This schedule reflected this amount as a loan to Mora. According to the Panaino schedule, Mora repaid the money in cash to Dreyer on 27 April 2012. Panaino said that he had no personal knowledge of the loans and repayments. This evidence contradicted the version that was put to Mora in cross-examination, namely that Panaino would testify that he personally saw the cash repayments being made. According to Mora this schedule was also part and parcel of the scheme to create a paper trail to mislead anyone who became suspicious of the flow of money between Eres and/or Dreyer and Mora.

[87] Rareco pleaded that Eres paid R4 600-00 (four thousand six hundred rand) by EFT into the account of V G Mora on 23 April 2012. This payment was admitted on the pleadings, but it was stated that it was for a computer software programme that Mora bought on behalf of Eres. Several documents were discovered relating to this payment.  Proof of payment attached to an email from Standard Bank to Guy Dewar, of Eres, dated 23 April 2012. A bank statement, in the name of V G Mora which indicated the payment of R4 600-00 (four thousand six hundred rand) into this account on 23 April 2012, further there was an email, referring to the purchase of the computer programme. In January 2018, in yet another AOD Mora undertook to repay R4 600-00 (four thousand six hundred rand). The second page indicated that the loan will be referred to as “FEL2” (for Emergency Loan Two).

[88] Mora testified that the R4 600-00 (four thousand six hundred rand) was paid to him by Dreyer to reimburse him for a small laptop that he purchased and that was used by his mother. He said that this AOD, as the others, was just a way to conceal the movement of money between him and Dreyer.

[89] Dreyer testified that Eres purchased a Microsoft programme with three usage licences. He retained two and Mora kept the third. Dreyer’s evidence about this payment became, to say the least, confusing and contradictory and in the end he conceded that the payment of this amount was probably not linked to the computer programme at all. The Panaino schedule recorded a loan of R4 600-00 (four thousand six hundred rand) made to Mora on 23 April 2012, and repaid on 27 April 2012.

[90] An agreement was discovered which was entered into between Mora and Eres and signed on 2 February 2012, in terms hereof Eres engaged Mora as a canvassing agent for work for Eres in various countries (the agency agreement).

[91] Rareco pleaded that Mora was paid R650 000-00 (six hundred and fifty thousand rand) by Eres on 28 May 2012. This payment was admitted on the pleadings, but it was pleaded that the amount claimed, represented a fee payable to Mora for introducing an engineering project in Australia to Eres. An AOD dated 11 May 2012 was also discovered which indicated that a payment of R650 000-00 (six hundred thousand rand) was made to Mora as commission for the “Australian job”.

[92] Rareco also obtained and discovered the following documents:

a. An email dated 26 May 2012, from Dreyer to Mora setting out the amounts that was to be paid to Mora. It included the R650 000-00 (six hundred thousand rand);

b. An email dated 26 May 2012, from Dreyer to Christel Dewer, from Eres, instructing her to make certain payments to Mora, including the payment of R650 000-00 (six hundred thousand rand);

c. A Bank statement from Eres reflecting a payment of R650 000-00 (six hundred thousand rand) to the account of V G Mora on 28 May 2012;

d. A Bank statement of V G Mora reflecting an amount of R650 000-00 (six hundred and fifty thousand rand) and transferred out of the account on the same day; and

e. A Bank statement of Mora’s account showing the amount of R650 000-00 (six hundred and fifty thousand rand) entering the account on 28 May 2012.

[93] When Mora consulted with Rareco’s representatives in January 2018, another AOD came to light relating to this payment. It was signed by Mora and Dreyer and was dated 11 May 2012. In terms of this document a loan was made to Mora and it was referred to as “FEL5” (for Emergency Loan 5). The document had a line drawn through it. The existence of two AOD’s relating to the amount which purportedly related to the Australian job is, to say the least, suspicious and clearly creates the impression that it was created to mislead anyone who might question the flow of money between Dreyer and Mora

[94] Mora indeed testified that the AOD was created to conceal the flow of money. He said that this payment too, related to the R2 000 000-00 (two million rand) initially agreed on, to be paid to him. He said that the fact that there was supposed to be a phase two of the Australian job was used as an excuse to get part of the R2 000 000-00 (two million rand).

[95] Referring to the agency agreement entered into between him and Dreyer regarding the Australian transaction, he alluded to the clause pertaining to commission which stated that he would get 10% as a finder’s fee for the second phase of the job. He pointed out that R650 000-00 (six hundred thousand rand) could not be 10% of the value of the contract, because no second phase work had been valued at that stage. This seems to corroborate his version that these documents were created to mislead.

[96] During cross-examination Mora was questioned regarding a schedule compiled by him, in which he described the payments as “Eres overpayment for finder’s fee”. He said that this had been a cover up to give to the prosecution in the criminal matter against him.

[97] During cross-examination Dreyer’s version was put as being that the payment was accurately recorded in the AOD, namely for the second phase of the Australian deal. Dreyer testified that the payment was paid by Christel Dewer following an email that Dreyer sent to her. The payment was accordingly made in error according to him.

[98] Later after being confronted with the date of signature of the relevant AOD (11 May 2012), which referred to a future payment to take place on 28 May 2012, Dreyer had to concede that the payment was not erroneously made. Dreyer could not explain why R650 000-00 (six hundred and fifty thousand rand) was paid for a project which might not even realise, nor could he explain how the amount of R650 000-00 (six hundred and fifty thousand rand) was calculated. This payment, to put it lightly, was suspicious.

[99] What was also interesting is that the finder’s fee which was paid in two tranches, regarding the Australian project, was paid after the R650 000-00 (six hundred and fifty thousand rand) was paid for the second phase of the Australian job. The chronology made no sense.

[100] Specific payments were also made to Mora relating to Australian projects. Rareco pleaded that Eres paid R354 878-12 (three hundred and fifty four thousand eight hundred and seventy eight rand and twelve cents) into the account of V G Mora on 28 May 2012. It was admitted that this payment was made, but the explanation was that it represented a fee to Mora for introducing an engineering project in Australia to Eres (the Australian project). The agency agreement relating to the Australian project was signed on 2 February 2012, by Eres and Mora. Mora testified that the payment was indeed with regards to a finder’s fee and was a legitimate payment.  What makes the payment however suspicious was the fact that it was paid into Mora’s son’s account.

[101] Rareco pleaded that Eres paid Mora R395 000-00 (three hundred and ninety five thousand rand) on 19 June 2012. The payment was admitted, but it was pleaded that represented a second fee to Mora for introducing the Australian project to Eres.

[102] Rareco discovered the following documents pertaining to this payment:

1. An email from Dreyer to Mora, dated 18 June 2012 and Mora’s response thereto on the same day.

2. Proof of payment of R395 000-00 (three hundred and ninety five thousand rand) sent by Dreyer to Mora, on 19 June 2012.

[103] Mora said that the payment of the R395 000-00 (three hundred and ninety five thousand rand) was part of the R2 000 000-00 (two million rand) agreed upon between him and Dreyer. Dreyer testified that Mora had been paid a finder’s fee of R750 000-00 (seven hundred and fifty thousand rand), which had been divided into two payments. One was paid initially and the second was paid when Eres delivered the goods for the Australian deal to the Durban harbour.

[104] Dreyer confirmed that R1 634 000-00 (one million six hundred and thirty four thousand rand) was the price Eres had tendered for the Australian project. He conceded that Eres made a profit of R711 723-00 (seven hundred and eleven thousand, seven hundred and twenty three rand) and that the nett profit was R370 000-00 (three hundred and seventy thousand rand). He conceded that the amount paid to Mora constituted double Eres’s total profit on the Australian project and amounted to a significant loss to Eres. This explanation defies all logic. Who on earth would pay a fee for introducing a project, where the nett profit, is nearly half the amount of the finder’s fee?

[105] An amount of R10 475-00 (ten thousand four hundred and seventy five rand) was paid by Dreyer, to V G Mora. Evidence was led about an email from Dreyer to Mora dated 7 November 2011, setting out the specifications for camera lenses, and asking him to buy it while he was overseas. There was also a sale agreement between Dreyer and Mora dated 11 May 2012, for a Sony SLT A65V24 megapixel camera.

[106] Eres’s bank statement indicated a debit in the amount of R10 475-00 (ten thousand four hundred and seventy five rand), on 12 May 2012. There was also a statement of the account of V G Mora indicating a credit of R10 475-00 (ten thousand four hundred and seventy five rand) on 12 May 2012 and a subsequent debit of R10 400-00 (ten thousand four hundred rand) on 13 May 2012. On 13 May 2012, Mora’s cheque account indicated a credit of R10 400-00 (ten thousand four hundred rand). In January 2018, Mora provided Rareco with an AOD dated 11 May 2012, recording an indebtedness by Mora to Dreyer in the amount of R10 475-00 (ten thousand four hundred and seventy five rand) for a loan. It is referred as ”FEL3” (for Emergency Loan 3).

[107] Mora testified that he purchased something to that value and that Dreyer had paid him by depositing the funds into the account of V G More, he could not recall what the item/s were. He said, however, that this formed part of the R2 000 000-00 (two million rand) agreement. He confirmed that he and Dreyer signed the AOD. He also confirmed that the two of them signed the sale agreement. He said Dreyer asked him to bring a camera lens form China, which he did not do. He said he purchased the camera for his personal use and that he still had it. He said that the sale agreement was yet another way to conceal the flow of money between him and Dreyer. Dreyer testified that the amount was indeed for the purchase of a camera. He testified that Mora gave him the camera, but later borrowed it and never returned it. The Panaino schedule recorded the amount of R10 475-00 (ten thousand four hundred and seventy five rand) as a loan.

[108] Mora testified about a further cash payment of R30 000-00 (thirty thousand rand). This amount was initially not pleaded, as Rareco was not aware of it prior to January 2018, when Mora informed Rareco’s representatives about it. Mora in January 2018, supplied Rareco with an AOD dated 15 June 2012, which referred to a future payment of R30 000-00 (thirty thousand rand) on 18 June 2012. Repayments of the amount were required to be referenced as “FEL4” (for Emergency Loan 4).

[109] Mora testified that Dreyer gave him the amount in cash and that he deposited it in his bank account. He said the AOD was drafted, as all the others, to conceal the flow of money between him and Dreyer.

 

INDIRECT BENEFITS TO MORA

[110] Rareco alleged that apart from the payments referred to above, there were also indirect benefits provided to Mora by Eres and/or Dreyer. It was contended that these benefits provided a proper context for assessing the relationship between Mora and Dreyer.

[111] Rareco discovered an email from Mora to Dreyer dated 2 July 2012, in which Mora asked Dreyer to write a letter to Absa Bank in which Dreyer had to confirm that De Campos, Mora’s fiancé at the time, had been employed by Eres since 1 April 2012, and earned R50 000-00 (fifty thousand rand) per month. Dreyer’s response was to email a letter with the content requested by Mora. Dreyer in evidence conceded that he wrote the email and that he was aware of the fact that the content was false. It is thus clear that Dreyer had no qualms to assist Mora to give false information to the bank. This behaviour was clearly indicative of an improper relationship between the two.

[112] Mora testified that he and Dreyer entered into an agreement in terms of which Mora would purchase a front end loader from Eres and that it would be used at the mine, without Rareco’s knowledge, to create an income for Eres and Mora. Dreyer testified that Mora asked him to purchase a front end loader. Strangely enough the front end loader was also referred to as a FEL. This must be seen with reference to the words FEL used in the AOD’s and which purportedly referred to emergency loans. Dreyer said that Mora was aware of the fact that the work done by the front end loader was not part of the contract and would create problems. This evidence was, however, at odds with the version put to one of Rareco’s witnesses, Theron, that Dreyer would testify that Mora believed he had purchased a front end loader, but that it was incorrect, as he never paid for it. Dreyer could however, not explain the email he sent to Mora on 11 April 2012, in which he specifically told Mora to pay him R450 000-00 (four hundred and fifty thousand rand) for the front end loader. The evidence revealed that approximately a week later Mora paid R430 000-00 (four hundred and thirty thousand rand) into Dreyer’s private account.

[113] Emails discovered, showed the intention of Dreyer to organise the installation of a generator at Mora’s house, while phase one of the contract was ongoing. Mora testified that Dreyer was going to pay for the installation, while Dreyer denied it. This generator was, however, never installed.

[114] Mora was arrested on 6 August 2012, after criminal charges were laid by Rareco against Mora, due to his actions with regard to the project at the mine. Employees of Eres entered into correspondence with the attorneys handling the criminal matter for Mora. A series of emails were sent from the following email address: aconcernedneighbour555@gmail.com, purportedly belonging to Johan Coetzee. Mora confirmed that he made up the name and used the email address to conceal the fact that the information was sent from him.

[115] Information was sent from the aforesaid email address to the home account of Panaino, the bookkeeper of Eres and from there to Panaino’s work email address. Mora passed on the information pertaining to his attorneys, Liddell, Weeber & Van Der Merwe in the criminal matter to Dreyer.

[116] On 8 November 2012, Panaino, emailed proof of payment of R50 000-00 (fifty thousand rand) to Liddell, Weeber & Van Der Merwe, made up of three different cash deposit slips, deposited at three different branches of First National Bank, within two hours of each other. The reference on the email was the case number of Mora’s bail application. No acceptable explanation could be given for the way these payments were made by either Dreyer or Panaino.

[117] The communication between Eres and Liddell Weeber & Van der Merwe reveals that Eres tried to conceal the identity of the client for whom the deposits were made. On 10 July 2013, Dreyer gave Panaino instruction in an email to pay Linddell Weeber & Van Der Merwe a further R100 000-00 (one hundred thousand rand) for “services rendered.” Dreyer initially testified that this was to assist Mora, but later on said it was for future legal services for himself.

 

BRIBERY

[118] A specific cause of action, based on commercial bribery exists in our law[1]. In Davies v Donald[2] the Cape Court took guidance from English decisions in stating that:

“…any secret benefit given by one contracting party to the agent of another with the intention of influencing his mind in favour of the donor is a bribe, which entitles the other contracting party to certain remedies against the agent and the donor quite irrespective of the donor’s motive or the effect of the gift on the mind of the agent.”[3]

[119] In the case of Mangold Bros. Ltd v Minnaar and Minnaar[4] the then TPD, was faced with a dispute of fact between the agent and the alleged briber. The former claimed he had been promised a sum of money, if he convinced his employer to purchase certain farming equipment, and the latter claimed he had paid money to the agent as a gratuity after the sale, without there being any prior arrangement.

[120] Sitting as a Court of appeal, the Court found both to be unsatisfactory witnesses[5]. However the Court referred to Halsbury Vol 1, section 426 and quoted:

“…The receipt of a bribe, whether in money or otherwise, is a breach of a duty, and it is immaterial whether or not the agent is influenced by such bribe in a way prejudicial to his principal’s interest or that the pecuniary interest of the principal is not involved.”[6]

[121] The Court reiterated that once a bribe is established to a Court’s satisfaction, it:

“…will presume in favour of the principal and as against the briber and the agent bribed, that the agent was influenced by the bribe; and this presumption is irrebuttable.”[7]

[122] The elements required to prove commercial bribery were set out in Extel Industrial (Pty) Ltd & Another v Crown Mills (Pty) Ltd[8]  (Extel) and are the following:

a. a reward;

b. paid or promised;

c. by one party, the briber;

d. to another, the agent;

e. who is able to exert influence over;

f. a third party, the principal;

g. with the intention that the agent;

h. should induce the principal;

i. without the latter’s knowledge; and

j. for the direct or indirect benefit of the briber;

k. to enter into or maintain or alter a contractual relationship; and

l. with the briber, his principal or sub-ordinate.

[123] In this matter a substantial amount of evidence was led to prove that Mora did influence Rareco and its directors to conclude the agreement with Eres. The evidence however, did not show that Mora influenced Rareco or anyone at Rareco to conclude the agreement with Eres, the evidence to the contrary, indicated that several people at Rareco considered the tenders and decided that Eres was the best option.

[124] In Chemfos the Court held that it is unnecessary to prove that the principal was influenced by the agent to conclude the agreement.

[125] In the context of this case, it is important to note that it is not only required that the parties involved in the bribery, attempted to ensure the conclusion of the agreement, but could also collude to maintain or alter the contract. In this matter there was ample evidence of their collusion to vary and influence variations of the agreements and payments made to Eres.

[126] The Court in Chemfos[9] referred to the fact that in English Law, when it was proven that one party gave a secret gift to the agent of another party, there exist an irrefutable presumption that the agent was influenced by it.  It was stated that no such presumption was known to our law, but it was stated that there might be justification for a conclusion that, when it is proven that a party gave a secret gift, to the agent of another party, that such a party should carry the onus, to proof that such a gift did not influence the agent, this was however, said obiter. In Extel it was stated that in such a case, the party who gave the gift, may attract an evidentiary burden.[10] In my view, I need not decide where the onus rest, as I am of the view that Rareco in any event proved bribery on a balance of probabilities. I will deal with the reasons for coming to this conclusion later on in the judgment.

[127] Once it is found that bribery was proved our Courts held that a contract induced by bribery is unenforceable against the will of the aggrieved party.[11] It was clearly established in Chemfos, following from the older decision in our Courts in Mangold Bros and Davies v Donald that an innocent party is entitled to rescind an agreement induced by the unlawful bribery of its agent, by the third party briber.

[128] In the Extel case Nienaber JA made it clear:

“That bribery is a form of corrupt conduct that will not be countenanced by any court of law is undeniably so.”

“It follows that the agreement whereby the bribery was established …. is to be regarded as immoral and thus void. No claim for it to enforce performance by either of the parties would be entertained.”[12]

[129] Regarding the position of the innocent party, the Court in Extel stated:

“The converse of the proposition in Chemfos (that an agreement resulting from bribery is unenforceable at the instance of the briber and against the will of the innocent party) is that the agreement is enforceable against the briber at the instance of the innocent party – or, to put it into legalese, the agreement is not void but voidable.”[13]

[130] The Court went on to warn against equating commercial bribery to situations of misrepresentation duress or undue influence as, despite their similarities, differences do exist, “in particular the abhorrence with which the law views the conduct of a briber, which in turn may have repercussions elsewhere”.[14]  This is undoubtedly true, untold damage is done to businesses as a result of immoral and quite frankly criminal acts committed by individuals such as these and such acts must under no circumstances be condoned by the Courts.

[131] The Court, in Extel further made the point that, if subsequent agreements are of the very kind contemplated when the bribery was conceived, then a sufficient causal link has been established between the bribe and the conclusion of the agreement.[15]  In this instance Mora and Dreyer might not initially have succeeded in the attempt to influence the award of the tender, but they had, at all relevant times the intention to act in an immoral and unlawful manner. When the tender was awarded, they commenced with the execution of their intention to manipulate, deceive and defraud Rareco. In my mind there is no doubt that the necessary causal link was established.

[132] In evaluating the evidence, in order to determine whether commercial bribery was indeed proven on a balance of probabilities, one must primarily consider the evidence of Dreyer and Mora and the facts and/or documents that may or may not support their different versions. The other witnesses and evidence will only be relevant in so far as they can assist in the attempt to try and establish the truth. It must be noted that neither of these witnesses impressed as reliable and honest witnesses, far from it. Mora, initially denied the bribery, but halfway through the trial changed his story. He explained that his conscience got the better of him. It must be kept in mind however, that there existed a distinct possibility that he threw Dreyer to the lions in order to save his own skin. There is indeed no honour amongst thieves. There was a distinct benefit for him in changing his story, as Rareco indicated that it would withdraw the claim against him and that they would not proceed with the criminal charges against him. Mora did not impress in the witness stand, he was evasive and contradictory and often blatantly dishonest. Dreyer was also evasive and contradicted himself, as one can establish from the evidence set out above. The version put on his behalf to witnesses in many instances contradicted his version when he testified. Dreyer was indeed, as bad, and, sometimes worse than Mora in his attempt to cover up what the two of them concocted to do.

[133] As a result the Court had to look at the evidence as a whole and the evidence should be considered in the light of the proven facts and probabilities.[16] If the evidence of one of these witnesses is corroborated by the objective and proven facts, the Court may, despite the shortcomings in the evidence of that witness, find that the evidence might be accepted in so far as it is corroborated. This was what was done when the evidence was considered and analysed.

[134] The fact of the matter is that Mora’s version, that he was bribed by Dreyer, in his capacity as director of Eres was corroborated by the objective facts. Various emails sent between Dreyer and Mora clearly point to a corrupt and collusive relationship between the two. The forwarding of confidential emails by Mora to Dreyer, irrespective of whether it actually assisted Dreyer and Eres, revealed the nature and extent of such corrupt relationship between the two. For example, Dreyer’s actions in paying for airplane tickets and the misrepresentations he made to Absa, on request of Mora pointed to the total disregard and lack of any morality of the two men. There was also the extent to which Eres and Dreyer went to conceal the fact that Eres was paying Mora’s legal fees, which further endorses the corrupt and collusive nature of their relationship. Examples of inappropriate and unlawful conduct by both Mora and Dreyer abound.

[135] There was also the question of payments made to Mora by Eres and/or Dreyer. In this regard, one can even ignore the disputed payments. There was no logical reason why someone like Dreyer, who hardly knew Mora, before the commencement of the contract, would pay large amounts over to him as loans or otherwise. The AOD’s which in various instances contradicted the evidence led, and other documents related to the same payments, indicated a poorly concealed attempt to mislead and obfuscate. The allegation that these payments were bona fide is clearly not true and formed part of a clearly inappropriate relationship.

[136] In my view it is irrelevant that these payments were made after the award of the tender. The two men met prior to the award being made and the emails confirmed that they communicated confidential information, which was indicative of the nefarious nature of their relationship. It is probable that Mora and Dreyer came to an agreement prior to the award of the tender: that Mora would assist in ensuring that Eres got the tender and that prices and payments would be inflated to the benefit of Eres; Mora would then be awarded for this assistance by the payment of money to him. In order to obfuscate the true nature of their relationship, several fictitious documents were created, for example the AOD’s and the Panaino schedule.

[137] The inference that prices were inflated is corroborated by the fact that, when Eres tendered for the bulk earthworks tender, there was specific reference to “costs with friends”. It does not require much imagination that this reference could only mean that unlawful and fraudulent payments would be made to Mora in future. There was also examples of ECN’s being inflated, which was dealt with earlier in this judgment.

[138] On consideration of all the facts, I am of the view that Rareco succeeded in proving commercial bribery. Invariably in instances where bribery and unlawful actions occur, it will be difficult for the party trying to prove such unlawful conduct to ascertain the whole truth, but that is fortunately not what is required, all that is required is to prove the cause of action on a balance of probabilities and that was certainly proven.

 

RESTITUTION

[139] An aspect that caused some difficulty was the question of restitution. It was submitted on behalf of Rareco that it was entitled to repayment of the whole amount of R106 443-83 (one hundred and six thousand four hundred and forty three rand and eighty three cents), alternatively repayment of R62 576 330-03 (sixty two million five hundred and seventy six thousand three hundred and thirty rand and three cents). It was contended that Eres and Dreyer had the onus to prove the value to which Rareco had been enriched by the work done and should have instituted a counterclaim based on unjust enrichment and that there was no onus on Rareco to prove that it was entitled to the amounts claimed.

[140] In order to put the amount claimed in the alternative in perspective, one needed to determine the basis for such claim. The alternative claim for R62 576 330-03 (sixty two million five hundred and seventy six thousand three hundred and thirty rand and three cents), was calculated in annexure POC15 to the particulars of claim. The heading of this annexure read “Valuation of work done by First Defendant inclusive of procurement contract”. In the particulars of claim, it was alleged on behalf of Rareco, that on re-measurement and valuation of work in fact done, on the basis of cost plus 12.5%, and taking into account the value of necessary procurement contracts, a sum of R44 906 768-00 (forty four million nine hundred and six thousand seven hundred and sixty eight rand) (including VAT) was due to Eres. Reference was then made to POC15, where certain values were allocated to certain items. No evidence, whatsoever, was led to prove the valuation as set out in this annexure.

[141] The case of Rareco regarding the restitution, was that the work done by Eres acceded to the land on which they were rendered and could not be restored, and the services rendered by their nature cannot be restored. For these reasons, so it was argued, Rareco should be excused from tendering restitution.

[142] It is trite that if an agreement is set aside, the general rule is that both parties are entitled to be restored to the same position as they were in, prior to the agreement. In Feinstein v Niggli and Another[17] (Feinstein) the following was said:

“If a party to a contract induced by the other party's misrepresentation elects not to stand by that contract but to have it set aside, he is entitled to the remedy of restitution, the object whereof is to restore  both parties to the same position as that which they originally occupied. The general principle is that the persons seeking relief (in this case defendants) must tender, and be able, to restore what they have obtained under the contract. … The inability to restore the subject-matter of the sale is not, however, always fatal to a claim for rescission, and in certain limited circumstances it is possible for a Court to order rescission of the contract, even though the innocent party cannot make restitution, eg where the merx has perished because of some inherent defect, or where it has been disposed of in the manner contemplated (and the proceeds tendered). … This equitable principle has its limitations, and the legal position properly stated is that the overall general rule that the person seeking restitution must himself make restitution always governs, but relief shall not be denied when substantially that restitution can be made and, insofar as it falls short of complete restitution, compensation in money can make good the deficiency. See Harper v Webster (supra at 502D - F). And the fact that the party seeking restitution can technically tender restoration of the very thing which he received may not avail him as a proper tender of restitution, if the merx has deteriorated or depreciated beyond what is foreseeable in the ordinary course of events as a result of being dealt with by that party. … he must at least be willing and able to make restitution when suing for rescission.”

[Court’s emphasis].

[143] The following transpires from this often quoted judgment. Principles of equity, requires a tender of restitution. However, if it is impossible a Court may deviate from this principle. If the merx itself can’t be returned, compensation in money can be offered.

[144] In Extel[18] it was held that:

“The rule that a rescinding party must tender restitution is not an inflexible one; it applies only where such restitution remains physically possible. When, through no fault of the party rescinding, restoration is no longer physically possible he is not precluded by that fact alone from resiling from the contract (cf Feinstein v Niggli and Another 1981 (2) SA 684 (A) at 700F-701F)”.

[145] The Court went further in Extel[19] and stated:

“'There is abundant authority for the trite principle that restitution is a condition precedent to cancellation' and at 248A: '. . . I think, that restitution, being an integral part of cancellation, it is for the party relying on the cancellation of a contract to allege and prove that restitution whether actual or (partly) substitutionary has been made or tendered or excused' (my emphasis). If the first dictum and the emphasised words in the second are intended to convey that an act whereby an election to rescind is manifested (such as the refusal by the innocent party to render counter-performance) is legally ineffective unless it is accompanied by a formal tender of restitution, it firstly confuses, with respect, the act of cancellation with the action of claiming restitution; secondly, it is impractical; and, thirdly, it is contrary to authority in this Court.

That a tender of restitution, or the explanation and excuse for its failure, is a requirement in proceedings for restitution is indeed trite. A contracting party who demands restitution consequent upon a purported rescission of the contract must tender the return of what he himself has received under the contract or its equivalent in money (Feinstein v Niggli and Another (supra at 700F - H)) and his failure or inability to do so may effectively preclude or nullify his election to resile from the contract. But as Christie The Law of Contract in South Africa 3rd ed at 324 has pointed out:

'The restitution or tender does not have to be an integral part of the act of rescission, rather it is a consequence that must necessarily follow from it. . . . '

To nullify an act of cancellation because it was not accompanied by a comprehensive and precise tender of restitution might well be to place an impossible burden on the party seeking to rescind.”

[146] The general rule is thus that restitution must occur, but in certain limited circumstances, one may deviate from that principle. The following principle underlying the rule of restitution is equity and fairness. Despite the moral turpitude involved here, it is inconceivably that Rareco could be entitled to repayment of the total amount, as on its own admission work, to the value of millions of rands, were done. A tender could be made in monetary terms. Rareco is the party who carried the onus, to prove on a balance of probabilities, the amount it was entitled to as repayment. Rareco’s argument that the Defendants should have relied on unjust enrichment is incorrect. Rareco, as the Plaintiff carried the onus to prove its claim, including the amount it was entitled to as repayment.

[147] It is common cause that, despite the bribery, certain work was done and that such work had a value.  Allegations were made of inflated prices and ECN’s but no evidence was led by Rareco, about what the exact extent was of the work done, nor of the actual inflation of the ECN’s. In my view, one way of proving the amount would have been to lead evidence about the value of the work that was done, which fell within the knowledge of Rareco alone. The amount that Rareco would be entitled to would be the difference between the value of the actual work done, and the actual payment. It is my view that such a calculation and evidence to support it, should have been put before this Court by Rareco.

[148] The Court was placed in a position from which it was impossible to determine the amount Rareco was entitled to. Regarding the alternative amount, there was surprisingly no evidence led to support the valuation and therefore no basis was laid to enable the Court to grant such an amount. Rareco took the simple approach that the works acceded to the land and therefore restitution was impossible, and in so doing seemingly lost sight of the fact that a monetary value could be attached to the work done. No attempt was made to enable the Court to establish the extent of the damage caused by the bribery. The only two amounts ever suggested as repayments were the two mentioned.

[149] Rareco relied on Northwest Provincial Government and Another v Tswaing Consulting CC and Others[20] for the argument that no restitutions were required.

[150] In the aforesaid matter the agreement was the result of fraud and the North West Government terminated the agreement. It, on application, claimed all the money paid by it, back. The Defendant did not put up any version whatsoever, that it made any contribution or improvement to the roads. In the light of these circumstances the Court found as follow:

“But this is to mistake the defrauded party's remedies on rescission, and to overlook what must be established before the victim is denied restitution. It is correct that a court will generally not grant restitution when setting aside a contract unless the victim of the fraud is able and willing to restore completely everything received under the contract. The reason is that the victim might be unjustly enriched by recovering what was given under the contract while keeping what was received.  Yet, as this Court explained in Feinstein v Niggli, since the rule derives from equitable considerations, it may be departed from whenever justice requires it.

The facts of this case provide a clear instance where justice demands that the province should be afforded restitution despite its acknowledgment that Tswaing may be entitled to compensation for some work performed. This is because Tswaing failed to put up any facts indicating that restitution would be unjust. The litigation afforded Tswaing ample opportunity to show what it delivered under the contract, thereby providing a basis for the conclusion that repayment should in justice be refused. Instead, Tswaing's response evidenced only its cavalier disregard.” 

 [Court’s emphasis]

[151] In this case Rareco will benefit inappropriately, if the Defendants are ordered to pay back the whole amount received despite the moral turpitude involved. There is no duty on the party who acted unlawfully to institute a claim for unjust enrichment in order to prevent an order to pay back all the money received. Such an interpretation would require that the overall onus shift once bribery or fraud is proven. I could find no authority to substantiate such a finding.  A Plaintiff still has to prove the whole cause of action, including the prayers that are sought.

[152] Even in cases like this one, where the Defendant’s clearly acted in an immoral and reprehensible manner, justice and equity, for that matter, require that a determination be made, regarding what amount should be repaid by them. In all of the matters referred to, it was actually the guilty party that had to pay back an amount to the victim. In this matter it was the other way around, the victim paid an excessive amount and was entitled to repayment of an amount. That amount needed determination and in the absence of such a calculation the Court was left in a particularly difficult position, as no Court can without the necessary evidence, determine an amount arbitrarily.

[153] The only amount that could arguably be determined, is the deposit paid on the bulk earthworks contract amounting to R2 500 000-00 (two million and five hundred thousand rand), as it was common cause that no work was done regarding that contract, and as a result Rareco should be entitled to repayment of that amount. In the absence of any other evidence this is unfortunately as far as this Court venture.

 

THE COUNTERCLAIMS

[154] As a result of my finding that Dreyer and Mora committed bribery, and due to the fact that as a result the contracts were lawfully rescinded the counterclaims based on this contract must be dismissed with costs.

 

LIABILITY OF DIRECTOR

[155] Although Rareco initially relied on the provisions of section 424 of the old Companies Act[21] to establish the liability of Dreyer, it correctly, conceded at the hearing that this argument would not be persisted with, as the new Companies Act[22], repealed the entire old Companies Act, save for the provisions of Schedule 5 of the new Companies Act, 2008 (the new Companies Act), which provides for transitional arrangements.

[156] Section 424 provided that in certain circumstances a Court may declare any person who carries on business recklessly or with intent to defraud, personally liable for the debts of the company. The new Companies Act has no similar provision.

[157] It was common cause that Dreyer was at all material times the only director of Eres. Rareco alleged on the pleadings that Dreyer bribed Mora. Dreyer’s actions were wrongful and deliberate and his actions resulted in losses suffered by Rareco. Rareco relied on the provisions of section 76(2)(a)(ii)[23] of the new Companies Act in order to hold Dreyer personally liable.

[158] The new Companies Act sets the standards for the conduct of directors in section 76, and provides for directors of companies to be held liable in terms of section 77. However, the section is clear, that a director may in certain circumstances be held liable for the loss, damage or costs sustained by the company nothing is said about a third party.[24] 

[159] In the case of Gihwala and Others v Grancy Property Ltd and Others[25] (Ghiwala), the Supreme Court of Appeal was faced with a claim in terms of section 424 of the old Companies Act, alternatively in terms of section 77 of the new Companies Act. The claims on both grounds were rejected.

[160] In respect of section 424 of the old Act, the Court found that a Plaintiff must plead and prove that the company cannot pay the debt, before it will declare a director personally liable for that debt. In respect of section 77 of the new Companies Act, 2008, it found that the section creates a claim in favour of the company, and cannot be invoked to sustain a claim in favour of a third party:

“In at least three relatively recent decisions of this court it has been held that section 424 is only available to a claimant where the company is unable to pay its debts and therefore recovery of the claimant’s claim is imperilled. …

In relation to the latter the claim was advanced in the alternative under section 77(3) of the 2008 Act. That section, in this departing from section 424, does not involve a declaration by the court, but creates a statutory claim in favour of the company against a director, imposing liability on the latter for any loss, damages or costs incurred by the company in certain circumstances, including where the director acquiesces in the company engaging in reckless trading. It is not a provision that can be invoked to secure payment to a creditor or shareholder in respect of their claim against the company or a director. So the attempt to rely on section 77(3) must also fail[26].

[Court’s emphasis]

[161] No debt of Eres was established and no evidence was led to prove that Eres would not be able to pay such debt. However, even if it had been established, section 76, that Rareco relied on to sustain its claim, does not create a claim in favour of a third party.

[162] The result is that Plaintiff’s claim to hold Dreyer personally liable must fail.

 

WITHDRAWAL OF CLAIM AGAINST MORA

[163] Rareco sought leave to withdraw its claim against Mora. This was opposed by Eres and Dreyer. In terms of Rule 41(1) (a) of the Uniform Rules of Court, a party may, after a matter has been set down, only withdraw the matter against a party by consent, or with leave of the Court. The Court has a discretion whether to grant the application and to determine the costs order.

[164] In Karoo Meat Exchange Ltd v Mtwazi[27]  the following was said:

“Once the case has been set down for hearing the court has an interest to see that justice is done both in regard to the merits of the dispute and in regard to costs. When the case has progressed to the stage of being set down for hearing, the parties can no longer do as they please. The court cannot be deprived of its control merely by reason of the fact that the plaintiff has served a notice of withdrawal. In the second place it seems to me wrong, in principle, that the plaintiff, having initiated the proceedings and put his opponent to inconvenience, trouble and expense, should, subject only to the payment of costs, at his mere whim have the right to withdraw the action at any time before the hearing. … These considerations persuade me that it is right and proper that once the stage of set down has been reached in litigation a discretion should vest in the judicial officer as to whether the proceedings should be terminated or not. To hold otherwise, to allow the plaintiff an absolute and not a qualified right to terminate the action at will, may lead to injustice[28].”

[165] This was no ordinary matter. The action commenced during 2013. I accept that extensive preparation had gone into the matter and until a very late stage Mora supported Dreyer’s version of the facts. This would have impacted on the way preparation was done and the trial conducted during the first part of the hearing, as well as the duration of the trial. I took note of the fact that Mora testified that every time the matter seemed likely to go to trial Rareco involved the police. It would seem to me that Rareco used the threat of criminal proceedings, if not directly, then at least indirectly, to put pressure on Mora. The evidence was that during January 2018, Mora approached Rareco and tendered to come clean about his relationship with Dreyer and to testify. In this matter Mora and Dreyer were both complicit in the bribery and Rareco’s subsequent loss. To let one of them get away with it will be unfair and unjust.

[166] This application should therefore be dismissed with costs.

 

CONCLUSION

[167] In light of all the evidence and as a result of the collusive and corrupt relationship between Mora and Dreyer both the main contract and the bulk earthworks contract were lawfully rescinded.

[168] Neither of the parties at any stage submitted that Rareco’s claim need to be separated and need to be adjudicated and arbitrated in terms of the FIDICS conditions, as a result I am of the view that the declaratory sought in this regard will serve no purpose as the parties seemed to be in agreement and no evidence or argument was raised regarding this aspect.

[169] As I have found that in terms of applicable legislation Dreyer can’t be held legally liable for the damages claimed by Rareco, Rareco is not entitled to a declarator holding Dreyer personally liable.

[170] It would seem that Mora did account to the Court regarding all the benefits received by him from Eres and/or Dreyer, as a result there is no need for an order against him to account.

[171] Rareco also prayed that Mora should disgorge all benefits received from Eres and Dreyer, it is unclear to whom such amount should be yielded. Certainly Rareco is not entitled to those benefits / amounts. Such an order will be vague and ineffective, accordingly it cannot be granted.

[172] I am also of the view that this judgment should be directed to the National Director of Public Prosecutions for their consideration regarding the possibility of criminal prosecution against both Dreyer and Mora because of the findings that the Defendants committed acts of commercial bribery.

 

COSTS

[173] Like everything in this case, the costs were no simple matter, although it should generally follow the result, certain occurrences during the trial influenced certain aspects pertaining to the costs.

[174] At the start of the trial, the first four days, from 2 May to 5 May 2017, were wasted as a result of Rareco not being ready for trial. Rareco had delivered the expert reports of Bruce Souter, Johan Steyn, and Daniel Theron on 20 April 2017, substantially out of time. Rareco sought an indulgence to work with its financial expert to prepare for trial, and the matter stood down at Rareco’s request for four Court days for that purpose. The Defendants should be awarded those wasted costs.

[175] Mora’s about turn during January 2018 also caused a delay of two  Court days and Dreyer and Eres should not be penalised with those costs, as this delay was caused by Rareco.

[176] I am of the view that it is fair under the circumstances to hold Rareco liable for the costs of six Court days.

[177] It was argued by Eres and Dreyer’s counsel that time was also wasted due to the fact that certain unnecessary witnesses were called by Rareco. Although some of the witnesses called did indeed not contribute to Rareco’s case, I accept, that especially before Mora made an about turn, Rareco had to attempt to prove a case which was particularly difficult to prove, in the light of the secretive and collusive nature of the relationship between Mora and Dreyer. Rareco should accordingly not be penalized with costs for calling witnesses that in the end did not contribute to the case.

[178] Rareco asked for a punitive costs order. I am of the view that due to the immorality of Dreyer and Mora’s actions such an order is appropriate. In this regards Dreyer, as the briber will not be able to hide behind the corporate identity of Eres. Normally the costs order will be jointly and severally, but as Rareco will in all possibility not execute a cost order against Mora, I am of the view that half of the costs should be paid by Eres and Dreyer jointly and severally, the one paying the other to be absolved and the other half by Mora personally, such costs to be paid on an attorney and client scale. This order will ensure that Mora’s part in the acts of bribery does not go unpunished.

[179] I make the following order:

1. The application to withdraw the action against Second Defendant is dismissed and Plaintiff is ordered to pay First and Third Defendants costs pertaining to this application

2. It is declared that the following contracts have been lawfully rescinded:

a. the contract for the rehabilitation and reinstatement of infrastructure and services at the Steenkampskraal Monazite Mine;

b. the contract for the provision of bulk earthworks at the Steenkampkraal Monazite Mine concluded on 5 April 2012;

3. The prayer that Third Defendant be declared personally liable to Plaintiff is dismissed.

4. First Defendant is directed to pay Plaintiff the amount of R2 500 000-00 (two million and five hundred thousand rand), together with interest at a rate of 10% from date hereof to date of payment;

5. First and Third Defendants are liable to pay 50% of the Plaintiff’s costs of the trial; on attorney and client scale, subject to paragraph 7 hereunder;

6. Second Defendant is liable to pay 50% of the Plaintiff’s costs of the trial on attorney and client scale, subject to paragraph 7 hereunder;

7. Plaintiff is ordered to pay the costs of six Court days, of the Defendants costs on a party and party scale;

8. The judgment must be sent to the National Director of Public Prosecutions for their consideration regarding the possibility of institution of criminal proceedings against the Defendants; and

9. The counterclaims are dismissed with costs.

______________

R G TOLMAY

JUDGE OF THE HIGH COURT

 

 

DATE OF HEARING: 2 MAY 2017

DATE OF JUDGMENT: 4 DECEMBER 2018

ATTORNEY FOR PLAINTIFF: BLIDEN CAMPBELL & ASSOCIATES

ADVOCATES FOR PLAINTIFF: ADV R ACTON & ADV P TORRINGTON

ATTORNEY FOR FIRST AND

THIRD DEFENDANT: SWANEPOEL & ALBASINI ATTORNEYS

 

ADVOCATE FOR FIRST AND THIRD DEFENDANTS: ADV C SWANEPEOL

ADVOCATE FOR SECOND

DEFENDANT: IN PERSON

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