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[2019] ZAGPPHC 54
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Tafron Trading CC v Portable Shade (Pty) Ltd (63577/2016) [2019] ZAGPPHC 54 (8 March 2019)
HIGH
COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
(1)
NOT REPORTABLE
(2)
NOT OF INTEREST TO
OTHER JUDGES
(3)
NOT REVISED
Case No. 63577/2016
8/3/2019
In
the matter between:
TAFRON
TRADING
CC
PLAINTIFF
And
PORTABLE
SHADE (PTY) LTD
DEFENDANT
JUDGMENT
MILLAR,
AJ
1.
This
is an action in which the plaintiff sues the defendant for payment in
respect of goods sold and delivered by it. The defendant
in turn has
a counter-claim against the plaintiff. At the commencement of the
hearing the plaintiff moved for a separation of issues
in terms of
rule 33(4) of the Uniform Rules of Court, separating the hearing of
the plaintiff's claim from the counter claim, the
reason being that
if the court finds in favour of the plaintiff on its claim, the
counter claim falls to be dismissed. The application
was supported by
the defendant. I granted the order sought in the terms agreed by the
parties in a draft order they handed up.
2.
The
business relationship between the plaintiff and the defendant
commenced at the beginning of 2011 and continued until it was
terminated at the beginning of September 2015. During the currency of
the relationship, the plaintiff imported from China and sold
to the
defendant extruded aluminium profiles which the defendant used in the
manufacture of the various products it sold. The plaintiff
had
initially been one of 3 suppliers of aluminium to the defendant but
was eventually the sole supplier Over the period of the
relationship,
the plaintiff would ascertain from the defendant what its likely
purchases would be and then on this basis import
the profiles. When
profiles were ordered and imported, this was usually in 6-meter
containers but also sometimes in 12-meter containers.
3.
The
aluminium was priced based on profile specific lengths and weight and
was subject to the Rand-US Dollar exchange rate. The plaintiff
would
pay the exporter 30% of the cost of a particular order when it was
placed and then had to pay the remaining 70% when the
ship which was
to bring it to South Africa was loaded. The order would not leave
China until it had been paid in full. Once the
order arrived in South
Africa and had been cleared, the plaintiff would then calculate the
price that it was going to charge for
that specific stock based on
the cost associated with its purchase and importation.
4.
The
defendant initially ordered and purchased individual lengths of
profile in bundles. This was the purchase of the basic profiles
as
imported in the specific lengths they had been manufactured. The
defendant then requested that the plaintiff perform additional
work
for it by cutting and drilling the lengths that had been purchased.
The business relationship evolved, and the defendant then
began
purchasing pre-cut pieces of profile. This evolved again to include
the plaintiff assembling certain of the pre-cut pieces.
When orders
were placed, these would either be delivered when they were ready or
would be collected on behalf of the defendant
by Mick Oosthuizen or
another representative.
5.
The pricing evolved with the
relationship - initially the plaintiff's price-list only provided for
lengths but
it was
expanded
to include pieces and at least from August 2013 a fixed "manufacture
cost" for drilling, cutting and assembly.
6.
The agreement to pay a fixed manufacture
cost was reached when Mr. Michael Baron ("Baron"), one of
the members of the
plaintiff who had been based in Shanghai China,
had returned to South Africa to run the plaintiff's factory. On his
arrival he
had arranged to meet with Mr. Brad Anassis (“Anassis”)
in order to discuss a fixed cost. They had met to discuss this
and an
agreement had been struck in terms whereof the defendant would pay a
fixed sum of R60 000,00 per month excluding material
cost for the
manufacture. A month or so later and at the instance of Anassis, they
had met again and renegotiated this cost downward
to R50 000,00 per
month. The plaintiff had invoiced the defendant for the initial
amount of R60 000,00 in September but after the
renegotiation had
agreed that the defendant only had to pay R40 000,00 in October so as
to bring this cost in line. After that
and until new prices were set,
this was what the defendant paid for manufacture.
7.
The
plaintiff issued new price lists when a container arrived from China.
This applied to the stock in that container. During the
period of the
relationship the plaintiff issued 4 price lists. The first was on 1
February 2011, the second on 2 December 2013,
the third on 1
September 2014 and the fourth on 1 May 2015. The price lists were
emailed by Mr. Fulvio Tafani ("Tafani"),
the member of the
plaintiff responsible for its financial management to the defendant's
bookkeeper - Heidi. In addition, whenever
a new price list was
issued, Baron and Anassis would meet and would discuss the price
lists. The price lists, besides setting out
the prices of lengths,
also set out prices for pieces as well as, from 2013, the agreed
manufacture price - initially R50 000,00
per month for 2013 and 2014
and then increasing to R55 000,00 in 2015.
8.
The
defendant had initially attempted to pay the plaintiff's invoices
within 30 days, but this had extended to 60 and sometimes
90 days.
Anassis had ascribed this to the payment terms of the defendant's
blue-chip clients as well as the cash flow constraints
experienced as
a result of the growth of the defendant's business.
9.
During
April 2015, a meeting was held between the three members of the
plaintiff and Anassis. He informed them that he intended
to grow the
defendant's business and would be bringing in partners with
appropriate skills to assist him in doing so. The defendants
account
was at that stage paid on 60 days. The account was duly paid on this
basis at the end of June and July 2015.
10.
By
July 2015, the defendant had brought in persons to assist, one of
whom was Stefan Terblanche. He was skilled in financial matters
and
had worked in a manufacturing environment previously.
11.
The
July payment was the last one the plaintiff ever received from the
defendant. During August, Anassis queried for the first time
the
basis upon which the plaintiff had been billing the defendant. This
was raised with Baron who in turn referred him to Tafani.
12.
An
email was addressed to Tafani on 31 August 2015 by Anassis in which
he stated that:
"Further to my discussions
with Mike, with regards to your invoices and monthly charges I
am
sure that he
mentioned this matter to you. I found lasts (sic) months invoices
strangely high so I looked into the Invoices and
found that we had
been overcharged somewhat according to your price list. Heidi has
conducted
a
12-month recon
using the correct relevant price list "per sector" to
correct the charges accordingly, and to be honest
I did not know that
you increased the prices every three months, we keep our price lists
firm for 12 months so this came as
a
surprise to me
when I saw this. Attached is the breakdown of overcharges per month,
in total we have been overcharged R1134528,26"
13.
Three
witnesses testified In the trial. Baron and Tafani for the plaintiff
and Anassis for the defendant. Their evidence was largely
common
cause and uncontentious as to the genesis and ongoing nature of the
business relationship between the plaintiff and the
defendant.
14.
Anassis
testified that while he had never ever seen the price lists that had
been emailed to Heidi but that he had met and discussed
the price
lists with Baron as and when they had been issued. His evidence was
that for the almost 5 years of the business relationship
he had never
looked at any of the plaintiff's invoices and had simply authorized
these for payment when Heidi had presented them
to him. He explained
his reason for this as being because the relationship had been "good
pure business" between the
plaintiff and the defendant.
15.
He
remained adamant that the basis for the price was the "per
meter'' or length basis that had been charged initially when
only
manufactured lengths had been purchased. He testified that he had
only come to understand that the plaintiff had been overcharging
the
defendant when this had been explained to him by Stefan Terblanche in
July 2015. His evidence in this regard was at odds with
the email of
31 August 2015 which in itself misrepresented the frequency with
which the plaintiff had revised its prices.
16.
It
is not in dispute between the parties that the defendant ordered the
goods from the plaintiff or that the goods ordered were
delivered to
the defendant. The dispute turns on whether the price for the goods
was in accordance with the whole of the plaintiffs
price lists or
whether it was on a "per meter" basis, extracted from the
prices per length on the price list as contended
by Anassis.
17.
It
was stated in Westinghouse Bank and Equipment (Pty) Ltd v Bilger
Engineering (Pty) Ltd that “
It
is a general rule of our law that there can be no valid contract of
sale unless the parties have agreed, expressly or by implication,
upon a purchase price. They may do so by fixing the amount of the
price in their contract or they may agree upon some external
standard
by the application whereof it will be possible to determine the price
without reference to them.”
[1]
18.
The
evidence establishes that the defendant placed orders with the
plaintiff. The orders were filled, and the goods delivered to
the
defendant. The evidence also establishes that prior to the order of
goods, over the entire period of the business relationship
between
the parties, the defendant was in possession of a price-list from the
plaintiff and knew the plaintiff's prices for the
specific goods that
it ordered, before such orders were placed. This was over the entire
period of the business relationship between
the parties.
19.
The
evidence of Anassis that notwithstanding his knowledge of the whole
of the price-list, the defendant ordered and paid the invoices
for
the orders under the mistaken belief as to the basis upon which they
had been prepared - for a period of almost 5 years. Given
his
business experience and the importance of the plaintiff as the sole
supplier of aluminium to the defendant and the inconsistency
between
his evidence and the email of 31 August 2015, I find his evidence is
contrived and is so improbable as to be untrue. The
version of the
defendant is rejected.
20.
During
argument, Mr. Vetten urged me to find that the plaintiff had, in its
declaration failed to plead a proper agreement between
the parties.
He argued that the plaintiff had failed to make material allegations
which in effect rendered the declaration excipiable.
He urged me to
find, in the event that I was not persuaded to find that the
defendant's version as to the determination of the
price should be
upheld, that the plaintiff s claim should in any event be dismissed
on this basis.
21.
"It
is, of course,
a
basic
principle that particulars of claim should be so phrased that
a
defendant may reasonably and fairly
be required to plead thereto. This must be seen against the
background of the further requirement
that the object of pleadings is
to enable each side to come to a trial prepared to meet the case of
the other and not be taken
by surprise. Pleadings must therefore be
lucid and logical and in an intelligible form; the cause of action or
defence must appear
clearly from the factual allegations made"
[2]
22.
The
defendant did not prior to the filing of its plea take issue with the
case pleaded in the plaintiff's declaration. In fact,
the defendant
pleaded to the declaration, made material admissions and in
consequence of this and agreement reached at the pretrial
conferences
held in the matter, the case came before court for the determination
of the issues. The defendant knew the case it
had to meet and was not
taken by surprise. For this reason, in my view this argument has no
merit.
23.
For
the reasons set out above, the plaintiffs claim succeeds, and the
defendant's counterclaim is to be dismissed.
24.
In
the circumstances I make the following order:
23.1
The defendant is ordered to pay
to the plaintiff the sum of R1 594 906,27;
23.2
The defendant is ordered to pay
interest on the sum of R1 594 906,27 from 16 August 2016 to date of
payment at the rate of 10,25%per
annum;
23.3
The defendant's counterclaim is
dismissed with costs;
23.4
The defendant is ordered to pay
the plaintiffs costs of suit
A MILLAR
ACTING JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
HEARD
ON:
4, 5 &
6 MARCH 2019
JUDGMENT
DELIVERED ON:
8 MARCH 2019
COUNSEL
FOR THE PLAINTIFF:
ADV W PIENAAR
SC
INSTRUCTED
BY:
COETZER & PARTNERS
REFERENCE:
MR F COETZER
COUNSEL
FOR THE DEFENDANT: ADV D VETTEN
INSTRUCTED
BY:
MARTINI-PATLANSKY
REFERENCE:
MR M MARTINI
[1]
1986 (2) SA 555
(A) at 5748-C, approving Colman J In Burroughs
Machines Ltd v Chenille Corp S.A Ltd
1964 (1) SA 669
0N) at 670C-D
[2]
Trope v South African Reserve Bank and Another
1992 (3) SA 208
(T)
at 210G-H