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[2016] ZAFSHC 104
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Kimate Investments (Pty) Ltd v DVN Boerdery CC (2456/2014) [2016] ZAFSHC 104 (23 June 2016)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No.: 2456/2014
In
the matter between:
KIMATE
INVESTMENTS (PTY)
LTD
Plaintiff
and
DVN
BOERDERY
CC
Defendant
HEARD
ON:
29
MARCH 2016
JUDGMENT
BY:
C.
REINDERS, J
DELIVERED
ON:
23
JUNE 2016
[1]
It is common cause that an agreement for the sale of livestock and
moveable assets was conclued on 16 May 2012 between the plaintiff,
represented by Mr YM Jadwat, and the defendant, represented by Mr DS
van Niekerk.
[2]
On 30 May 2014 summons was issued by the plaintiff for payment in the
amount of R 1 108 858,00 together with interest
at the rate
of 15,5% per annum with effect from demand, alternatively date of
service of summons, to date of final payment.
[3]
The defendant raised two special pleas, namely that the incorrect
written agreement was attached to the summons, and secondly
that no
allegation was made to establish jurisdiction. In its plea to the
plaintiff’s summons the defendant annexed the correct
written
agreement (hereafter “the agreement”) concluded between
the parties and furthermore relied on the agreement
in its
counterclaim to establish its cause of action. Neither of the special
pleas were persisted with, however I will revert later
to the
incorrect written agreement attached.
[4]
It was not denied by the defendant in its plea that the purchase
price for the livestock and moveable assets amounted to R
1 849 200.00 plus 14% Value-Added Tax (“VAT”)
in the amount of R 258 888.00, totalling R 2 108 888.00
(the “purchase price” as referred to in clause 4 of the
agreement). It is common cause that the total purchase
consideration was payable in instalments as follows: R 500 000.00
on 7 May 2012; R 500 000.00 on 1 June 2012; R 500 000.00
on
1 December 2012 and R608 888.00 on 1 February 2013. That only an
amount of R 1 030 000.00 were paid by the defendant,
is
common cause.
[5]
The plaintiff averred in its summons that it complied with its
obligations in terms of the agreement and that the defendant
breached
the agreement by failing to pay the remainder of the total price
consideration in the amount of R 1 108 858.00
to the
plaintiff. The defendant denied that the plaintiff complied with its
obligations and pleaded that it was entitled to a reduction
in the
purchase price in the amount of R 246 040.00 as a number of
livestock and moveable assets were removed from the plaintiff’s
farm since the last date of inspection. The defendant also averred
that the plaintiff was not registered for Value-added Tax (VAT),
alternatively did not provide it with a VAT invoice and consequently
may not claim the amount of R 258 888.00. In its counterclaim
the defendant claims a reduction in the purchase price in the
aforementioned amount (Claim A, hereafter “counterclaim A”),
as well as an amount of R 48 000.00 being the reasonable and
necessary cost to re-register certain moveable assets in its
name
(Claim B, hereafter “counterclaim B”).
[5]
The plaintiff called Mr Mohammed Abba, the son-in-law of Mr Jadwat
who had since passed on. Although he himself did not conclude
the
agreement, he was closely involved and a witness thereto. A couple of
months prior the conclusion of the sale agreement his
father-in-law
fell ill and the family decided that they should get involved in the
selling of the livestock and moveable
assets of the plaintiff.
As he was familiar with Mr Van Niekerk who was interested in
purchasing the livestock and moveable assets,
he introduced the
latter to Mr Jadwat. The amounts as contracted in the agreement for
the goods sold, were determined upon valuation
by Mr Van Niekerk.
[6]
Although refering to an email in which Mr Van Niekerk indicated the
discrepancies in the livestock which added up to a total
of R
246 040.00, Mr Abba admitted that to his knowledge no amendments
to the agreement were ever reduced to writing.
In terms of clause 7
of the agreement it is stated that, if any of the listed items
mentioned in the annexures to the contract
has been removed from the
farm since the last inspection by the purchaser, the annexure on
which the goods appear and the purchase
price will be amended
accordingly on the day when the goods are removed from the property.
The last inspection of the goods by
Mr Van Niekerk occurred when he
removed the goods. On the invoice from the plaintiff with a
description of all the livestock and
moveable assets (being farming
implements) purchased by the defendant, no VAT registration number of
the defendant is indicated,
it does not state that it is a tax
invoice and he bore no knowledge of the basis on which VAT was paid
by the plaintiff. To his
knowledge no VAT number was provided by Mr
Van Niekerk to the plaintiff either. The VAT registration number of
the plaintiff however
appears from the SARS document, the so-called
VAT103-form, indicating that the plaintiff was indeed registered for
VAT. Adv Jagga
on behalf of the defendant conceded that Mr Abba was
an honest witness who made concessions where he had to. The defendant
closed
its case without calling any witnesses.
[6]
It is common cause between the parties that the purchase price that
the defendant was indebted to the plaintiff amounted to
R
2 108 888.00 (inclusive of R 258 888.00 VAT); that the
defendant paid an amount of R 1 030 000.00
and that there
should be a a reduction in the purchase price due to short delivery
of livestock in the amount of R 246 040.00.
Adv Jagga pressed
hard upon me to find that the plaintiff is premature in that it did
not fulfil its obligations in terms of the
agreement (vide clause 7).
[7]
Adv Jagga furthermore submitted that the plaintiff bears the onus to
show it did comply with the provisions of VAT legislation
by
providing a proper tax invoice; that there was no evidence that the
defendant was ever asked to provide a VAT number and consequently
there is no obligation on the defendant to pay the VAT amount. I do
not find any merit in this submission. In
Metcash
Trading Ltd v Commissioner, South African Revenue Service, and
Another
2001 (1) SA 1109
(CC)
it was confirmed by mouth of Kriegler, J in par [17] that
vendors are in a sense involuntary tax-collectors. Furthermore,
sec
20(4) of the
Value-Added
Tax Act 89 of 1991
(the “Act”)sets out the particulars that should be
contained in a tax invoice, but in terms of sec 20(7) of the Act
the
Commissioner can direct that certain particulars not be contained in
the tax invoice or even that a tax invoice is not required
at all.
This is indicative of the fact that even if the plaintiff did not
comply with the provisions of sec 20(4), it does not
entitle the
defendant to withhold payment of the agreed upon VAT amount of R
258 888.00. Even if I am wrong in the above
conclusions,
the principle of
pacta
sunt servanda
is applicable. The amounts payable is to be ascertained from the
contract itself.
[8]
The defendant’s allegation that an amount of R 246 040.00
should be subtracted, is not only uncontroverted but has
become
common cause in the evidence of Mr Abba. It is the only deduction
that can be made from the original purchase price. In
testimony was
referred to an email by Mr Van Niekerk dated 24 March 2014 to one Dr
Bobat (page 21 of the exhibit bundle).
The essence of the email
at the time was to inform Dr Bobat of the difference in the livestock
adding up to an amount of R 246
040.00. It also referred to the
re-registration fees of R 48 000.00 that Mr Van Niekerk had
paid. On a reading of the email
the only conclusion that can be made
is that the rest of the livestock and moveables were indeed delivered
and that Mr Van Niekerk
at the time wrote the letter to explain that
he disputed with reference to the livestock, payment of R 246 040.00.
Put differently,
save for the stated amount he admitted liability for
payment of the remainder of the amount. In passing by it may be
mentioned
that Mr Abba testified that the original values were in
fact calculated by Mr Van Niekerk himself. I am on a preponderance of
probabilities
satisfied that the amount to be deducted is to be
reduced in accordance with defendant’s counterclaim A.
[9]
The purchase price in terms of the agreement amounts to R
1 849 200.00 (excluding VAT). After deducting the common
cause short delivery of livestock in the amount of R 246 040.00,
an amount of R 1 603 160.00 is owing. VAT calculated
at 14%
amounts to R 224 442.40, thus totalling R 1 827 602.40. The
admitted payment in the amount of R 1 030 000.00
stands to
be deducted, leaving an amount of R 797 602.40 still due and
payable. It follows that there should be judgment in
favour of the
plaintiff for payment of R 797 602.40.
[10]
The defendant claimed in its counterclaim B payment of R 48 000.00
for the licensing fees. No evidence was adduced in
this regard
(defendant bearing the onus) and the said claim stands to be
dismissed. Clause 3.5 of the written agreement in any
event
stipulates as follows:
“
Registration
The Seller shall sign such forms and deliver to the Purchaser such
documents as may be necessary
to
enable the Purchaser
to
register the Vehicles that forms part of the moveable assets in his
name
”.
(my emphasis)
[11]
Summons was issued in May 2014. Annexed thereto was an agreement of
sale that has nothing to do with the dispute herein. Defendant
in its
counterclaim annexed the common cause agreement between the parties.
It is difficult to fathom why plaintiff did not amend
and rectify its
summons before the trial or at all. It proceeded on the incorrect
pleadings. In its counterclaim the defendant
claimed inter alia a
reduction in the purchase price due to the short delivery of certain
livestock. This was done as far back
as July 2014. In essence the
claim by defendant for reduction of the purchase price is successful
and Mr Abba readily conceded
that, from the outset, plaintiff
realised that defendant was entitled to a price reduction. The plea
filed by plaintiff to defendant’s
counterclaim wherein it
sought that defendant’s counterclaim be dismissed was
opportunistic. Counterclaim A is not dismissed.
On the contrary, it
is same that leads to judgment for payment to plaintiff. Counterclaim
B of the defendant is however dismissed.
To show my displeasure I
intend to have each party pay its own costs.
[12]
In the result the following orders are granted:
1.
Judgment
for plaintiff in the amount of R 797 602.40 together with
interest a
tempore
morae
calculated from 12 June 2014 until date of payment.
2.
Each
party to pay its own costs.
_______________
C. REINDERS, J
On
behalf of Plaintiff:
Adv. M. Desai
Instructed by:
Matsepes
Incorporated
BLOEMFONTEIN
On
behalf of Defendant:
Adv. N. Jagga
Instructed by:
Lovius
Block
BLOEMFONTEIN