- Pluminex took a retirement organisation to court for R3.5 million under a utility savings agreement.
- The court found that the retirement home's manager was not authorised to enter into the contract.
- The plaintiff's own witness contradicted their case, leading to the claim being dismissed.
A retirement organisation has successfully defended a R3.5 million lawsuit after the High Court in Cape Town ruled that the company suing it failed to prove a valid contract ever existed.
Judge JI Cloete dismissed Pluminex (Pty) Ltd's claim against St Johannis Organisation, finding that the company’s own principal witness gave evidence that undermined the very contract the company relied on. The court also ordered Pluminex to pay the retirement home's legal costs.
Utility savings agreement unravelled
The dispute started with a 2017 agreement between International Utility Brokers, whose claim was later handed over to Pluminex, and St Johannis Organisation, a retirement home in Parow. IUB offered to audit the organisation's municipal electricity and water bills, find possible billing errors, and suggest cheaper tariffs. In exchange, they would get 35 percent of any savings, but only if the retirement home accepted their recommendations.
Pluminex argued that the deal became binding on 7 June 2017, when Sister Marina Basson, the retirement home's general manager, signed the contract and gave IUB the go-ahead to implement its suggestions. The company later sued for just over R3.5 million in unpaid fees.
Authority became the deciding issue
St Johannis argued that Basson did not have the authority to commit the non-profit organisation to that kind of contract, saying that only the management committee could approve such agreements, not the general manager.
The company’s own witness, Gerrit Germishuys, ended up giving evidence that sank their case. He told the court, "Sister Basson asked the other two people present that I mentioned earlier as well if they agreed for her to sign the service agreement. All three of them agreed."
Judge Cloete found that this testimony directly contradicted Pluminex's claim that Basson had the authority to sign the agreement on her own. Instead, the evidence made it clear she asked for permission from other officials before signing.
Germishuys repeated the same story during his testimony, saying, "She asked, 'Then are you guys in agreement that we sign this service agreement? That was now Lindy La Grange and Uwe Voigt that was also present at the meeting."
The judge said that Pluminex’s own witness had knocked out one of the main pillars of their case.
Board never accepted the recommendations
The court found another major flaw in Pluminex’s case when it looked at whether the retirement home ever actually accepted IUB’s recommendations.
A report for the management committee said the organisation would only share savings with IUB if it accepted the recommendations. It also made clear that if those suggestions were turned down, the company would get nothing.
When asked about the report, Germishuys agreed it matched the situation, telling the court it described "what will happen if those recommendations are implemented."
The management committee later said they were worried about signing up for a four-year deal that would hand over 35 percent of future savings. Instead, they decided to look at other ways of dealing directly with the municipality.
The retirement home later told IUB that the agreement was on hold while the board thought it over. Later, they tried to negotiate a lower fee, but no new deal was reached.
Court dismisses the claim
Pluminex argued that Basson's signature above the words properly authorised was enough to prove she had authority, but Judge Cloete did not accept this argument.
The judge ruled that Pluminex failed to prove two key things. First, that Basson had the authority to sign the agreement, and second, that St Johannis Organisation had accepted the recommendations. Wrapping up, Judge Cloete said, "The plaintiff's claim must fail."
The High Court threw out the full R3.5 million claim and told Pluminex to pay all of St Johannis Organisation’s legal costs, including counsel’s fees.
Get your news on the go. Click here to follow the Conviction WhatsApp channel.
