Publication: Magistrate's Court Durban Issued: Date: 2004-05-26 Reporter:

Judgment : CCII Systems (Pty) Ltd v Seelan Naidoo

Magistrate's Court for the District of Durban


CCII Systems (Pty) Ltd v Seelan Naidoo

Pleadings :

The Plaintiff's claim (as amended) against the Defendant is for payment of the amount of R60 400,53. The Plaintiff's claim is for the re-imbursement of funds advanced to the Defendant in terms of an oral agreement concluded between the Plaintiff (represented by Dr. Richard Young) and the Defendant on the 3 October 2001 and at Cape Town whereby the Defendant undertook to obtain and deliver to the Plaintiff certain documentation and undertook to re-imburse the Plaintiff the funds advanced by it in the event the documentation was not obtained by the Defendant. In the alternative, the Plaintiff alleges in Paragraph 3A of the Particulars of Claim, that in terms of an oral agreement entered into at Cape Town on the 28th November 2001, whereat the Plaintiff was represented by Dr. Richard Young and the Defendant acting in person, the Defendant undertook to re-imburse the Plaintiff the funds advanced by it in the event the said documentation was not obtained by the Defendant (and handed to the Plaintiff). The Defendant avers in his Plea that an oral agreement was entered into between him and Dr. Richard Young and at no time did Dr. Young disclose to the Defendant that he was acting in a representative capacity for the Plaintiff. In paragraph 3.3 of the Defendant's Plea, the Defendant avers that the material terms of the agreement between him and Dr. Young were that the Defendant was to travel to Europe to investigate certain leads provided by Dr. Young in regard to alleged corruption by certain members of the South African Government and other individuals who were involved in obtaining government contracts. Dr. Young would pay for the Defendant's travel expenses and hotel accommodation.

The Evidence :

The Plaintiff's first witness was Dr. R.M.M. Young. On the 26th May 2004 Mr. Camp applied for the re-opening of the Plaintiff's case after the matter was adjourned to this date as a part heard matter. Mr. Mall had no objection and the request was granted by the court. Mr. S.P. Sole was called to give evidence in support of the Plaintiff's version. The Defendant was the only witness in his case.

Dr. Young a professional electronics engineer, explained in his evidence in chief that the Plaintiff is a specialist data communications company that specialises in data communications for military systems such as armoured vehicles and warships. The products and services of the company have now found application in defence applications. In 1999 the government signed contracts with the German frigate consortium to provide frigate or patrol corvettes for the South African navy and the Plaintiff had been nominated as a formerly supplier for one of these data communication systems. Although the Plaintiff was nominated, a French company was elected. This resulted in a civil claim against the Department of Defence, Armscor and African Defence Systems. The arms deal dispute became a national dispute. The Plaintiff's complaints were eventually handed over to the public protector. During this period, August 2001 when he was in Pretoria, he received a message from the Plaintiff's switchboard operator. The message was to phone a ‘Greg Naidoo' who had information about the arms deal. The same day he had a telephonic conversation with Mr. Naidoo. African Defence Systems was based in the Durban area. Mr. Naidoo informed him that he had a network of contacts, overseas as well as in South Africa and he knew people who had information with regards to the bribery and corruption in the arms deal. Mr. Naidoo was pretty insistent to arrange for him to fly to Pretoria. When he told Mr. Naidoo that it was not possible, Mr. Naidoo suggested that he (Dr. Young) should fly down to Durban. This was neither possible and he told Mr. Naidoo that he would get back to him. Eventually arrangements were made to fly Mr. Naidoo to Cape Town. The Plaintiff paid for his flight. The agreement was concluded at the Plaintiff's offices. Mr. Naidoo requested sufficient funds for his subsistence and travel expenses to Europe. Mr. Naidoo had the contacts and would provide the Plaintiff with useful information. Mr. Naidoo informed him that he was a journalist and wanted to expose the corruption. This information was contained in documents and records. Security issues were discussed. The agreement was that once Mr. Naidoo gets the information, he would send it to the Plaintiff every two days or weekly. Mr. Naidoo would purchase his own air ticket but needed 3 000 US dollars to cover for internal regional flights from London, hotel accommodation and taxis. Mr. Naidoo informed him that he needed to go from London to Spain and Guernsey. After Guernsey he wanted to go to Germany.

Very shortly after this meeting Mr. Naidoo went overseas. Mr  Naidoo faxed him a request for more money for a further two days accommodation at the Holiday Inn in London. He was not very happy to do so, as it was not in terms of their original agreement. He eventually agreed to pay for the two nights accommodation. A couple of weeks had gone passed and no documentation was forthcoming. The next thing, he received a phone call and a fax from Australia. It was a request for more money, which he declined to pay. Mr. Naidoo informed him that his contacts (Mr. Naidoo's contacts) could provide him with evidence of bribery and corruption in Australia. Thereafter Mr. Naidoo came back to South Africa. He was in telephonic contact with him. Mr. Naidoo refused to give him any reason why he had not been able to come up with any documentation and he insisted to meet Dr. Young in Cape Town again. Once again Mr. Naidoo came to Cape Town at the Plaintiff's expense. Mr. Naidoo informed him that his contacts needed more time and that he would have to go back overseas to collect the documents. The extra funding was about R14 000,00. This meeting was held at the Plaintiff's offices. Mr. Naidoo insisted to stay overnight. The amount for the hotel accommodation was deducted from his air ticket. Mr. Naidoo asked him to meet him the following morning at the hotel. The following morning (28 November 2001) he met Mr. Naidoo at the hotel. They had breakfast and then they went up to the hotel room. Mr. Naidoo was very confident that he would get these further documents and told him (and I quote from the transcribed record, page 19 line 10 to12) : "Richard, if I can't get any of these documents I will repay all the outlay to you if I can't get them." ‘ I told him that I would hold him to that.' Mr. Naidoo also informed him that he had contact in the government and he could facilitate the communication channels that could be appropriate for settling his arms deal case. Thereafter Mr. Naidoo went overseas again and contacted him after a week. Mr. Naidoo informed him that he got hold of the first item of information which was a 136 or 36 page document containing a summary of incidents or transactions, payments and bribes related to the arms deal. Mr. Naidoo requested him to pick it up in Spain but he told him that it was contrary to their agreement. Dr. Young was able to facilitate an alternative way of getting this documentation back from Spain to South Africa, as an alternative to it being couriered. Nothing happened in Spain and Mr. Naidoo obviously flew back to London. Mr. Naidoo  requested him to make arrangements for a similar arrangement in London. Dr. Young made specific arrangements with a family member of a colleague to meet Mr. Naidoo in London but nothing came of that either. He then requested Mr. Naidoo to hand in the documents to a firm of attorneys, but nothing came of any of these options and that is basically where it left off. Dr. Young tried to contact Mr.Naidoo, but could not get hold of him despite the fact that he even provided Mr. Naidoo with a cell phone.

Dr. Young confirmed the payments made to Mr. Naidoo - as reflected on Exhibit A - 1 from 3/10/2001 to 6/12/2001. Dr. Young further confirmed all the Plaintiff's expenses, correspondence, invoices and cell phone print outs as reflected on Exhibit A - 2 to A-27. Dr. Young stated that the Defendant dealt with the Plaintiff. He is the managing director of the Plaintiff and he acted for the company. He made sure that he always used the company's stationary and all payments were made by the company. The overseas contacts were the Defendant's contacts. He would not have given the Defendant 3 000 US dollars to fly overseas if the contacts were his. He would have gone overseas himself. If the contacts were his contacts, he would have revealed the contacts to Mr. Naidoo prior to his departure. Mr. Naidoo made no mention in the correspondence that his (Dr. Young's) contacts never materialised.

Cross-examination :

The following suggestions in respect of the Defendant's version were put to Dr. Young in cross-examination :

It was also put to Dr. Young that the Defendant would deny the following aspects of his evidence: that Dr. Young gave him a cell phone, that the Defendant used the name of Greg Naidoo and that the Defendant had a visitor at the hotel the night of the 27th November 2001.

Mr. S.P. Sole confirmed in his evidence that he was contacted by Dr. Young who informed him that “Greg Naidoo” had contacted him. Dr. Young informed him that Greg claimed to have crucial information in respect of the arms deal and corruption. Dr. Young was concerned about Greg’s approach. Greg wanted Dr. Young to fly him to Cape Town. Dr. Young asked him to meet with Greg to establish his bona fides. Dr. Young gave him Greg’s telephone number. He phoned Greg who informed him that he knew him and that his name was Seelan Naidoo. Arrangements were made to meet each other at the Wimpy in Sparks Road. At the meeting they had discussions about the Defendant’s background. The Defendant said he would have excess [sic] to dockets. People who had the documents would only trust him. No concrete details were provided to him. The Defendant gave him the impression that he had inside information. The Defendant knew a lot about the arms deal. He phoned Dr. Young and told him that the Defendant knows more about the arms deal than the ordinary man in the street and it seemed that the Defendant had the contacts.

Cross-examination :

Mr. Sole stated that he formed a relationship of trust with Dr. Young during the arms deal investigations. He conceded that Dr. Young’s company together with other companies and subcontractors were all victims of the arms deal corruptions. Dr. Young’s company has taken this much further than other companies. A colleague informed him that his name was mentioned during the course of this trail [sic]. Thereafter Dr. Young phoned him and asked if he would testify in this matter. He informed Dr. Young that he would think about it. After discussions with a professor, he was advised that it would not be unethical for him (as a journalist) to testify in this matter. He denied that he contacted the Defendant long before Dr. Young contacted the Defendant. He stated that he was not aware of the Defendant’s existence before Dr. Young’s telephone call. Neither was he aware of the Defendant’s knowledge of the arms deal. His understanding was that the Defendant claimed that he had information. The Defendant appeared to be an intelligent man. He conceded that he did phone Dr. Young during the course of the meeting. He wanted to know if the Defendant would meet with Mr. Jacobs and Dr. Young. Possibly the flight arrangements were also made. The next morning he took the Defendant to the airport. He was not aware what the arrangements were between the Defendant and Dr. Young. He met the Defendant a second time at the Wimpy. He was eager to find out what occurred. The Defendant informed him there were problems and things did not work out. He did not really provide much of an explanation. It was put to Mr. Sole that the Defendant would deny this second meeting with him.

Seelan Naidoo’s (Defendant’s) evidence was that Mr. Sole phoned him and asked him if he received a phone call from Dr. Young. Mr. Sole informed him that Dr. Young had information on the arms deal. He was surprised that he was approached in respect of the issue. Thereafter he met Mr. Sole at the Wimpy who asked him if he would be interested to meet with Dr. Young who would provide him with contacts and leads. During the course of the meeting Mr. Sole phoned Dr. Young to confirm his identity. Mr. Sole suggested to Dr. Young to meet with the Defendant. The next morning Mr. Sole took him to the airport for his flight to Cape Town. After the meeting with Dr. Young at Cape Town, he did not meet Mr. Sole again. Mr. Sole phoned him and he informed Mr. Sole that Dr. Young wanted him to travel and obtain information from his sources. When he reached Cape Town, Dr. Young met him as the airport. He was taken to the Plaintiff’s business premises where he also met Mr. B. Jacobs. After Mr. Jacobs left, Dr. Young informed him that Mr. Jacobs is in his employment and has been a valuable source of information. Dr. Young then requested him to go outside. Dr. Young suggested to him that he needed to travel to London to meet a few of his contacts that had information. Dr. Young did not disclose their identity. Dr. Young informed him that his contacts would contact him upon arrival in London. He could not leave the same evening as requested by Dr. Young. The next afternoon he left to London from the Durban airport. Dr. Young funded him with 3 000 US dollars. This was Dr. Young’s idea. When he reached London he phoned Dr. Young who advised him that his associates would contact him to set up a meeting. He only received one call from a person by the name of Brett. Brett informed him that Dr. Young contacted him and he would meet with him to provide him with certain leads. Brett told him the leads were rather sensitive and he would meet with him in person. After a stay of 2 or 3 days he moved to the Holiday Inn Hotel, which is closer to West London. He was in contact with Dr. Young and he expressed his concern about Dr. Young’s contact. Dr. Young’s contact never met with him and he returned to South Africa.

Mr. Naidoo confirmed the fax sent to Dr. Young - Exhibit A (8) from Australia. He stated he went to Australia on Dr. Young’s request. Dr. Young informed him that he had new information in respect of a Mr. Swan. In Australia the contacts did not reveal anything. He did not receive Dr. Young’s fax to him dated 25/10/2001 - Exhibit A - 9. He met with Dr. Young for the second time in Cape Town. He believed there was a reasonable possibility of getting information. He went to London again. The same thing happened. He was not contacted by anyone. He had enough and he got the impression that had been used [sic]. He came back to South Africa. He denied that he contacted Dr. Young from Spain and informed him that he had documents. After this second trip to London he had a last meeting with Dr. Young at his business premises. On Dr. Young’s request he stayed over at the hotel as Dr. Young was occupied. Dr. Young wanted to discuss the issue of non-materialization of the contacts. He did not park a vehicle at the hotel, as he had no vehicle with him. Dr. Young told him that he would make reference to this name for intelligence purposes. He did not agree to reimburse Dr. Young, as this was never discussed. Dr. Young never informed him that he represented the company. His dealings were with Dr. Young. Dr. Young did not inform him that the 3 000 US dollars would be financed by his company. The mention of 4 trips to Europe in his opposing affidavit to the Summary Judgment Application is incorrect. It is an error on his part as he travels a lot.


Evaluation of the Evidence and the Legal Position :

The onus is on the Plaintiff to prove its claim against the Defendant. A party alleging a contract must prove the terms of the agreement, which he seeks to enforce. See Mc WILLIAMS v FIRST CONSOLIDATED HOLDINGS (Pty) Ltd 1982 (2) SA 1 (A). Dr. Young was a good and impressive witness. He stood cross-examination exceptionally well and there were no contradictions in his version. The same can be said about Mr. Sole. He corroborated Dr. Young’s version in respect of a specific aspect, which was categorically denied by the Defendant; that the Defendant contacted Dr. Young first and that Mr. Sole had to meet with the Defendant to establish if the Defendant was bona fide in his approach. Dr. Young was clear and very specific in respect of the following issues:

Mr. Mall submitted that Mr. Sole’s evidence should be treated with caution because Mr. Sole and Dr. Young are both looking for the same answers and they work together. I do not agree with these contentions. There was nothing in the evidence of both these witnesses in support of this submission. Mr. Sole told the court that when he was approached by Dr. Young to testify in this trial, he in fact considered the request and only after obtaining advice from a professional, he decided to testify in this matter. I would not say (as submitted by Mr. Mall in argument) that the Defendant was also an impressive witness and that the court cannot place too much reliance on the correspondence between the parties or issues not put to Dr. Young in cross-examination. Neither do I agree with Mr. Mall's contentions that both versions before the court are equally probable.

The correspondence between the parties is consistent with the Plaintiff’s version. The Defendant’s defence is that he dealt with Dr. Young. Yet, Exhibit A - (Plaintiff’s Remittance Advice signed by the Defendant) indicates otherwise. In Exhibit A - 8 (Fax to Dr. Young dated 25/10/2001) mention is made of Bernice from the Plaintiff’s company. Why would Bernice be resistant in providing more funds, if the Defendant in fact dealt with Dr. Young in person? I cannot agree with Mr. Mall’s contention that it was reasonable for the Defendant to believe that he dealt with Dr. Young. It is also clear from Exhibit A - 6 (Fax to Dr. Young dated 10/10/2001) that the Defendant is advising Dr. Young of the events and contacts. Paragraph 2 of this fax reads as follows : “Things are fitting into place in terms of my objectives in securing the information and documentation.” Paragraph 3, the second sentence reads as follows : “I do need an additional 1 500 (fifteen hundred British pounds) R22 000 to be sent to me as the project entailed some extraordinary measures which I did not know about in Cape Town. This is the final funds required before the project is successfully completed.” In the Defendant’s fax dated 25 October 2001 he in fact mentions that the project is taken longer than expected. The correspondence before the court is indeed overwhelming in favour of the Plaintiff’s version.

I further encounter the following problems with the Defendant’s version :

Not only are the probabilities against the Defendant, but it was also clear to court that the Defendant tailored his evidence to suit his circumstances. In considering the evidence in the totality I find the probabilities to be overwhelming in the Plaintiff’s favour. I am satisfied that the Plaintiff has proved the Defendant’s failure to obtain and deliver to the Plaintiff certain documentation as agreed. I also find that the Defendant undertook to reimburse the Plaintiff in the event the said documentation was not obtained.

judgment :

Judgment for the Plaintiff as claimed in the amended Particulars of Claim together with interest thereon as claimed with costs. Costs include the reasonable costs of counsel on brief as per counsel’s invoice.

A.C. Moolman

Additional Magistrate : Durban