About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2020
>>
[2020] ZAGPJHC 220
|
|
Khoza and Another v Baksons (Pty) Ltd t/a Bakos Brothers and Others (19/39565) [2020] ZAGPJHC 220 (2 September 2020)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 19/39565
In
the matter between:
KHOZA
, R B
MAGUDU
First Applicant
ADI INVESTMENT (PTY) LTD
Second Applicant
and
BAKSONS
(PTY) LTD t/a BAKOS BROTHERS
(in business rescue)
First Respondent
RAUTENBACH
, GEORGE
FREDERICK N.O.
Second Respondent
SMUTS
, ADRIAAN PETRUS
N.O.
Third Respondent
JUDGMENT
(heard 31 August 2020 remotely on Zoom platform)
FA
SNYCKERS AJ:
INTRODUCTION
1
This matter concerns the sale of goods, namely furniture and
curtains, by Bakos Brothers to ADI (the second applicant company).
2
It is common cause that ADI placed an order with Bakos Brothers for
the sale and delivery to it of furniture, to furnish the residence
of
the Khoza couple, for a purchase price of R2 694 000.
There is a discrepancy in the papers on what is admitted
and what is
alleged concerning whether this occurred in November 2016 or in
2017. Nothing rides on this difference. The evidence
of
payments confirms the furniture order was placed in 2016.
3
One is told that Mr Khoza, for ADI, signed Bakos Brothers’
standard terms and conditions in November 2017 and these are
attached
to the answering affidavit. The quotation (or order) in
relation to this furniture sale does not form part of the
papers.
4
In
September 2018, Mr Bakos of Bakos Brothers advised Mr Khoza for
ADI
[1]
by means of a letter as follows: “
your
furniture order has been completed and ready for delivery and
installation. The outstanding balance of R844 976.33 is due as
indicated in the reconciliation below”.
The reconciliation shows amounts in respect of various furniture
items and a delivery and installation fee all totalling the amount
of
R2 694 976.33 and payments received totalling R1 850 000
leaving a balance due before delivery of R844 976.33.
5
On 1 October 2018 Mr Bakos sent an email to Mr Khoza to which was
attached “
Quote for Phase 2 of your house”
.
The email
inter alia
advised as follows:
“
We need to get your order in so
we can make delivery this year still”.
It
also stated the following:
“
We will need a 50% deposit to
start your order (R1 595 000). Also could we please ask for
balance payment on your Phase
1 order (R844 976)”.
6
There was, accordingly, before the balance of the purchase price in
respect of the furniture order had been paid, such as to enable
delivery as intimated in the 19 September communication, a further
order in relation to curtains in respect of which a 50% deposit
was
required “
to start your order”
.
7
This requirement of paying a 50% deposit “
to start the
order”
echoes the standard terms which require the payment
of a 50% deposit upon acceptance of the quote and which state in
clause 3.2
as follows:
“
We will not process your order
until we have received a 50% deposit, a signed copy of the quote and
a signed agreement which can
be emailed, faxed or delivered to the
branch”.
And
in clause 3.3 the following:
“
The prices quoted on the
quotation are valid for 30 days from the date of quotation only and
will fall away if you do not accept
it and pay the deposit”.
8
The quotation for the curtains was amended on 12 November and signed
by Mrs Khoza on 15 November 2011. The next day an amount
of
R300 000 was paid. After the 1 October letter with the
quote for the curtains, amounts totalling R800 000 were
paid.
In total ADI paid Bakos Brothers an amount of R2 650 000 up
to and including February of 2019.
9
In March of 2019, a statement was rendered embodying a reconciliation
of amounts charged and paid to date. The amounts charged
were
listed under items headed “
Orders with Bakos Brothers”
and contained the same items that had appeared on the furniture
statement on the 19
th
of September, as well as the amount
quoted on 12 November 2018 for curtains, and then an additional
amount (the precise categorisation
of which was never made clear and
does not emerge clearly from the papers) of R529 380 designated
as “
media room”
. In the answering papers
Bakos Brothers refers to this statement as setting out items for the
furniture and the curtaining,
but this item of R529 380 for
“
media room”
is an item additional to both of
these categories.
10
Be that as it may, the total for the orders including the delivery
and installation fee that had been mentioned in the September
statement came to R5 367 455.23 and payments up to February
2019 of R2 650 000 were reflected leaving a “
balance
due before delivery of R2 717 455.23”
.
THE
CONTENDING CASES
11
In the founding papers ADI’s case was that, after receipt of
the communication in September 2019, advising of an outstanding
balance of just under R845 000 with respect to the furniture
order, ADI paid the outstanding amount in full by December 2018.
This was also the attitude adopted on behalf of ADI in correspondence
from its attorneys with attorneys representing Bakos Brothers
early
in 2019.
12
However, the schedule of payments attached by ADI in reply and the
reconciliation of payments reflected in the statement in March
of
2019 both confirmed, and it was common cause before me, that the
total payments made by ADI to Bakos Brothers with respect to
all
orders relating to this house amounted to no more than R2 650 000,
leaving a balance on the original purchase price
of the furniture of
R44 976.33.
13
In May 2019 Bakos Brothers went into business rescue. A defence
invoking a dispute resolution mechanism contained in the
business
rescue plan was, for various reasons, and on the facts it appeared to
me properly, abandoned by Bakos Brothers before
the hearing, and
nothing need be said about it in this judgment.
14
It is clear from exchanges of correspondence between attorneys acting
for ADI and attorneys acting for the business rescue practitioners
of
Bakos Brothers in June 2019 that the contending positions adopted by
the parties were the following: ADI was contending that
it had paid
for the furniture and that it was entitled to delivery of the
furniture and that the order in relation to the curtains
was a
separate order in relation to which no payments had yet been made.
Bakos Brothers was contending that there was a single
“
project”
that could not be divided into two separate sale transactions, and
that nothing was due for delivery unless and until the full
purchase
price for the furniture and curtains had been paid. In
addition, amounts of interest and storage fees were now being
levied
that were added to the claimed total balance outstanding. The
standard terms make provision for the payment of storage
fees of 5%
of the total purchase price per month from 30 days after the
so-called “
notification effective date,”
being the
date on which notification is given that the goods are ready.
The terms also make provision for the levying of
interest at 3% above
commercial bank prime rates on payments outstanding after 7 days
after the notification effective date.
15
The main dispute in this matter was, accordingly, whether the
furniture order and the curtain order were sufficiently separate
for
the purposes of the standard terms to entitle ADI to delivery of the
furniture after an amount totalling the purchase price
of the
furniture had been paid or whether, as contended for by Bakos
Brothers, there was only one consolidated “
project”
on
a single “
account”
in respect of which full
payment needed to be made before any delivery could be effected.
16
Matters came to a head when ADI declined to pay an outstanding
claimed balance of over R2 700 000 on the total project
to
realise delivery of furniture and curtains and when, after demand for
such payment was not met, Bakos Brothers on 29 October
2019 through
its attorneys gave notification that it cancelled “
any and
all orders placed with the company in respect of the furniture items
and the curtain items which were, at all relevant times
as understood
between the parties, dealt with as one and the same project”
.
The communication proceeded to threaten to sell the furniture and
curtain items to mitigate “
ongoing damages suffered by the
company”
.
17
ADI then adopted the attitude that the curtain order had failed for
want of fulfilment of a suspensive condition, namely payment
of the
50% deposit in terms of the standard terms (by then curtain hardware
such as rails had been installed in the house) and
that ADI was
entitled to specific performance of delivery of the furniture items,
having paid the full purchase price in relation
to the furniture.
Given the threat to alienate the furniture, ADI instituted urgent
proceedings to restrain such alienation
pending the outcome of this
application. Bakos Brothers formally abided in the outcome of
the urgent application, without
at any stage undertaking not to
proceed with the threatened sale and making it clear on record that
it was not giving any consent
or undertakings.
18
The interim interdict was granted.
ASSESSMENT
19
A consideration of the papers and the communications between the
parties makes it clear to me that the contention on the part
of Bakos
Brothers, that the furniture order and the curtain order had to be
combined into a single order for the purposes of the
standard terms,
such that no item could be delivered until all items had to be paid
for, was opportunistic and wrong.
20
The fact that a reconciliation appeared on a statement in a single
account is insufficient to undo the clear contracting up to
and
including the 1
st
of October of 2018, in terms of which it
was undeniable that upon payment of the balance of the purchase price
for the furniture
order, delivery of the furniture order would be
effected irrespective of the fate of the curtain order and whether it
proceeded,
or was paid for partly or in full.
21
In the answering affidavit one reads (in paragraph 22) the following:
“
The applicants contend that the
furniture and curtaining constitute separate transactions. The
applicants know this contention
to be incorrect. In support
hereof, I refer to correspondence, in the form of Whatsapp messages
between the first applicant
and representatives of the first
respondent, copies of which are attached hereto marked ‘GRA4.1’
and ‘GRA4.2’
respectively”.
22
The Whatsapp exchanges certainly do not indicate to me that the
furniture order and the curtain order had now been agreed to
become
one order such that payment for the full amount was required before
any items could be delivered. It is true that,
as was to be
expected, there would be talk of a total current outstanding balance
and payments that had been made, but that is
neutral as to whether
one is dealing with severable transactions and whether anything had
happened drastically to alter the character
of the furniture sale as
confirmed in writing up to and including 1 October 2018.
23
In fact, a Whatsapp message on the 25
th
of February from
Ryan Bakos to Mr Khoza, if anything, confirmed the understanding of
separate orders with separate delivery dates
with respect to payments
of their separate balances as follows:
“
We are starting yr curtain
installation today. We are only going to do the rails and
hardware, we will only hang the curtains
when you live in. Your
house isn’t ready yet and we are worried about dirt and damage.
Could you let me know when we
can expect payment? Also the balance
for the rest of your order please … as most of your goods are
ready for delivery.”
24
Counsel for Bakos Brothers insisted that the following evidence in
the answering affidavit at the very least created a factual
dispute
about whether there was an agreement to turn the two orders into a
single order which, on the principles applicable to
motion
proceedings, could not be decided against Bakos Brothers as
respondent – I quote from paragraph 51.2 to 51.4 of the
answering affidavit:
“
51.2 I reiterate that the
curtaining ‘was not a separate transaction, but was a separate
order forming part of the same project
as the furniture’.
51.3 At the time that the first
quotation in respect of the curtain items was sent to the first
applicant on 1 October 2018, it
was envisaged that the financial
aspects in respect of the two phases would be dealt with separately.
51.4 By the time that the first
respondent sent the revised quotation for the curtaining, Bakos
agreed with the first applicant
that the charges for both phases be
consolidated. Thus that the totals (purchase prices and deposits
paid) be consolidated. This
is however, neither here nor there, as
the curtain ‘was accepted on the 15
th
of November
2018 and a deposit of R300 000 paid on the 16
th
of
November 2018.”
25
The above hardly amounts to a forthright allegation that there was an
agreement between the parties that what undeniably were
two separate
orders, the first of which was capable of finalisation by way of
payment and delivery, were converted into a single
order, in terms of
which there would be no entitlement to delivery until the last cent
had been paid. The most these allegations
amount to is an
understanding or an agreement that there would be payment
administered on one account, which is not strange.
The guarded
language relating to separate orders on the same “
project”
appears deliberately chosen, and these allegations cannot, in my
view, suffice to create a dispute of fact as to the existence
of an
agreement that the character of the furniture order had altered into
forming part of an indivisible sale transaction between
the 1
st
of October 2018 and March 2019.
26
It may be noted that Myrtle le Roux, who was the sales consultant
acting for Bakos Brothers and the contact person, apart from
Mr Bakos
himself, who dealt with Mr Khoza in relation to these sales,
submitted a confirmatory affidavit for Mr Khoza in which
she
confirmed that it had always been her understanding that the two
transactions were separate transactions. This by itself
is not
decisive and, if there were a true factual dispute on the papers,
would be insufficient to have an applicant’s version
prevail
over that of a respondent. But in circumstances where the material in
the papers favouring a single transaction over separate
transactions
is so thin, such evidence is not without some significance.
ALLOCATION
OR APPROPRIATION OF PAYMENTS
27
I have mentioned that ADI’s case in its founding papers and in
attorney’s correspondence was to the effect that it
had paid
off the full purchase price in respect of the furniture and was
entitled to delivery – i.e. that all payments made
were towards
the furniture sale and that the furniture sale had been fully paid.
28
It is entirely unclear from the communications between the parties
whether the payments were to be appropriated towards the furniture
sale or towards the curtains. It is true that the amount of
R300 000 was paid the day after the curtain order was placed,
but all payments made towards the furniture sale were in round
amounts and the R300 000 bore no relation to 50% of the curtain
order to serve as any kind of a deposit. Even Bakos Brothers did not
unequivocally allege that this payment was made towards the
curtain
deposit. The allegation in paragraph 33 of the answering affidavit
was instead speculative, indicating the absence of any
indication
either way:
“
On 16 November 2018 the
applicants made a payment in the amount of R300,000.00 in respect of
the project (inclusive of curtaining),
alternatively part payment of
the deposit in respect of the curtaining order.”
29
I asked the parties to address me on the principles relating to
appropriation and was referred to the discussion in
Christie
in this regard. I also considered the authority of
Miloc
Financial Solutions (Pty) Ltd v Logistic Technologies (Pty) Ltd &
Others
[2008] ZASCA 40
;
2008 (4) SA 325
(SCA). In general, subject to
certain exceptions, the debtor may indicate its allocation or
appropriation when making a payment,
which the creditor is not bound
to accept but which, if taken without demur, would govern the
appropriation. If the debtor simply
makes a payment without
indicating an appropriation or allocation, the creditor may posit an
appropriation but must notify the
debtor to give the debtor the
opportunity to decline to make the payment on the terms stipulated by
the creditor. In the
absence of any such agreed appropriation
between the parties, the general principle would be to apply the
appropriation that is
least burdensome or most favourable to the
debtor.
30
In the circumstances of this particular matter, apart from the timing
of the payment of the R300 000 on 16 November 2018,
one would
expect the payments made to be towards discharge of the furniture
sale to liberate the furniture delivery as intimated
in September
2019, before payments would be allocated towards the curtains.
There is nothing in the exchanges between the
parties that disturbs
this allocation sufficiently to indicate a contrary intention and at
the very least the position is sufficiently
ungoverned by agreement
between the parties for the principle enunciated in
Miloc
to
apply, namely to allocate in accordance with the benefit of the
debtor such as to allocate towards a furniture sale.
31
The problem, however, is that ADI has not paid the full purchase
price for the furniture, such as to entitle it to delivery.
32
The application sought declaratory relief with respect to the curtain
sale – that it had failed, i.e. that the curtain
quotation was
now null and void for failure of a suspensive condition, and also
sought specific performance of the furniture sale
on the faulty
supposition that the full purchase price had been paid.
33
In the answering affidavit the attitude was adopted that the curtain
sale formed part of the furniture sale and that it had not
failed for
want of a suspensive condition. The answering affidavit
certainly created the impression that the attitude of
the respondent
was that the sale was still executory, and capable of implementation
and enforcement through payment of the balance
outstanding on the
curtains and furniture as a whole (including storage fees and
interest). In argument, however, counsel
for Bakos Brothers
adopted the attitude that as far as Bakos Brothers was concerned,
this sale had been cancelled as intimated
in the cancellation letter,
but that Bakos Brothers was amenable to effecting delivery upon
payment of all outstandings both for
the furniture and the curtains.
34
In the replying affidavit Mr Khoza for ADI makes the following
statement (paragraph 40):
“
It is clear that the second
respondent’s main gripe is about the arrear interest and
storage costs, which was never disclosed
to me and I was never made
aware of these amounts. I was never quoted nor requested to pay the
amounts as stated by the second
respondent. I nonetheless am
willing and able to settle that amount if needs be in order for my
furniture to be delivered”.
35
In argument before me it appeared that the applicant was intending,
by its reference to “
that amount
”, to refer to the
amount in respect of storage fees that had been quantified in the
letter of 28 June 2019 from the attorneys
for Bakos Brothers, namely
R268,372.76. The letter indicates that this is a monthly amount, yet
the applicant appears to have been
under the impression that it was a
total amount. More about this below.
LEGAL
POSITION
36
In my view, the purported cancellation on 29 October 2019 of the
“
project,
based on a failure to pay the demanded
outstanding balance on the project as a whole, namely an amount of
over R4 400 000,
is not an effective cancellation of the
furniture sale. There was no entitlement to demand payment of any
amount with respect to
the curtains in order to procure delivery of
the furniture, and certainly not the amount of R4 400 000
that was demanded.
This is so despite the fact that an amount
of some R44, 776 remained outstanding on the furniture sale,
including whatever amount
had properly accrued in respect of storage.
I do not believe that the purported cancellation on the strength of
the illegitimate
demand could effectively terminate the furniture
sale.
37
Where does that leave the applicant? According to the respondent its
“notification of effective date” letter was
dated the
10
th
of March 2019 and storage charges started accruing
from the 10
th
of April 2019 – this is set out in the
attorney’s letter of 28 June 2019.
38
It is also
clear to me that, by the latest by the date of this letter of the
28
th
of June 2019, Bakos Brothers was repudiating the furniture sale by
demanding payments of amounts in relation to the curtain sale
before
it would make any delivery in relation to the furniture sale.
For as long as this repudiation lasted, Bakos Brothers
could not
invoke the running of storage charges in terms of its standard terms
on the furniture sale.
[2]
Payment of the outstanding balance on the furniture sale from that
moment on would not have yielded delivery of the furniture given
the
repudiation, yet storage charges would have been incurred from 30
days from the notification effective date to the date of
this
repudiation. The 5% storage fee provided for in the standard
terms amounts to R134, 748.81 per month or R4, 491.63 per
day. That
means legitimate storage fees accumulated in the amount of
R350, 346.91 in respect of the furniture sale between
the expiry
of 30 days from the NED to the latest day for repudiation on 28 June
2019.
39
As for interest, by the NED date the full amount, save for R44 976,
had been paid. ABSA prime at the time was 10%
and therefore 3%
above prime would have been 13% annually. Payment was due 7 days from
the NED which was therefore the 18
th
of March 2019.
Interest accrued on the amount of R44, 976 from the 18
th
of March to the 28
th
of June 2019 at 13% annually. In my
calculation that is an interest amount of R1, 624. The accumulated
storage costs were never
liquidated for purposes of the calculation
of overdue interest and I do not believe it would be fair or in
accordance with the
terms of the contract to levy interest on the
storage costs between the 18
th
of March and the 28
th
of June 2019.
40
Accordingly, in my view, ADI is entitled to delivery of the furniture
listed in Annexure “FA2” (the communication
of 19
September 2018) against payment of the amount of R396 947.24
(the outstanding amount on the purchase price, storage
costs to date
of repudiation and interest).
41
The notice of motion seeks an order declaring the quotation relating
to the curtain sale as lapsed and null and void. I
have my
doubts whether it can be said that the curtain sale failed as a
result of non-fulfilment of the suspensive condition relating
to the
payment of the deposit. Both parties were content to implement
the sale despite the fact that the deposit had not
been paid within
the 30 days, as was also the case with the furniture sale.
42
Nevertheless, the parties before me are
ad idem
that there is
no curtain sale. The applicant contends the sale has lapsed and
the respondent for its part contends that the
sale, as part of a
larger transaction, has been cancelled. The curtain sale has
accordingly been effectively abandoned by
both parties. The
rails remain in place in the Khozas’ residence and presumably
fall to be returned or some agreed
arrangement made as to their fate.
COSTS
43
The costs of the interim urgent proceedings were reserved for
determination in this application. I can see no reason why the
respondent ought not to bear the costs of the interim urgent
proceedings. It threatened to sell the furniture despite being
bound in an executory contract to deliver the furniture against
payment of the outstanding portion of the purchase price, while
demanding payment in relation to the curtain sale before any delivery
would be effected with respect to the furniture. It
declined to
give any undertakings that it would not sell the furniture.
44
Leave to sue in terms of section 133(1)(b) of the Companies Act 71 of
2008 (given that Bakos Brothers is in business rescue)
has already
been granted in the order in the urgent application handed down by
Judge Fischer on 26 November 2019.
ORDER
45
In the circumstances I make the following order:
1. The quotation annexed to the
founding affidavit marked “FA3” is no longer of any force
and effect;
2. The respondents are directed,
against payment by the second applicant of an amount of R396 947.24,
forthwith to release
the goods set out in the invoice attached to the
founding affidavit marked “FA2” from storage and to
deliver the goods
to the second applicant.
3. The first respondent (the company
in business rescue) is directed to pay the costs of this application
including the costs of
the urgent application under the same case
number that yielded the order of Judge Fisher on 26 November 2019.
FA
SNYCKERS AJ
JUDGE
OF THE HIGH COURT
2
September 2020
Date
of Hearing: 31 August 2020
Judgment
Delivered: 2 September 2020
APPEARANCES:
On
Behalf of the Applicants: O Mokgotho
Instructed
By: ENSAfrica Inc
Sandton
On
Behalf of the Respondents: C de Villiers-Golding
Instructed
By: Richter Attorneys
Johannesburg
[1]
I refer in this judgment to interactions between ADI and Bakos
Brothers without drawing distinctions between the Khozas and ADI,
or
between various representatives of Bakos Brothers and Bakos Brothers
itself.
[2]
See
Erasmus
v Pienaar
1984
(4) SA 9
(T).