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[2012] ZAGPPHC 371
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Barden Tyre Services NW (Pty) Ltd v Banson Trucking (Pty) Limited and Another (9169/2010) [2012] ZAGPPHC 371 (6 February 2012)
IN
THE NORTH GAUTENG HIGH COURT, PRETORIA
REPUBLIC
OF SOUTH AFRICA
CASE
NO: 9169/2010
DATE:
6 FEBRUARY 2012
In
the matter between:
BARDEN
TYRE SERVICES NW (PTY)
LIMITED
...............................................................
Plaintiff
And
BANSON
TRUCKING (PTY)
LIMITED
.....................................................................
First
Defendant
CHRISTINA
PETRONELLA ELSA
VAN
DER
WESTHUIZEN
.........................................................................................
Second
Defendant
JUDGMENT
Tuchten
J:
1
The plaintiff is a member of a group of companies which sells,
amongst other automotive components, new and retreaded tyres. The
first defendant has two businesses, Banson Trucking and Tiro. The
activities of both the first defendant’s businesses involve
transporting goods by trucks and the defendant bought on a
substantial scale from the plaintiff for both its businesses to keep
its trucks and those of its subcontractors on the road, so much so
that the plaintiff provided a fitter to be in attendance at
the
defendant's premises to fit tyres onto the first defendant’s
vehicles. The second defendant is the director of the first
defendant
and is employed by it. The second defendant attends to the first
defendant’s administration.
2
The first defendant is a family run business. It is run by Mr
and Mrs van der Westhuizen and their sons Basil and Jason van der
Westhuizen. For convenience and with no disrespect intended, I shall
refer to the two younger Van der Westhuizens as Basil and Jason
respectively.
3
The contractual foundation of the commercial relationship
between the plaintiff and the first defendant is an agreement
described
in its body as a credit application. On 25 October 2006,
the second applicant signed the credit application, which was
accepted
by the plaintiff. In terms of the application itself, the
plaintiff extended credit to the first defendant with a credit limit
of R20 000 per month and on terms described by the plaintiff as a
seven day account. By 2009, the year relevant to this action,
the
credit terms had been extended to thirty days.
4
The agreement which came into existence when the cred it
application was accepted obliged the first defendant to pay attorney
and
client costs if the plaintiff took any legal action against it
and pay interest equivalent to Standard Bank's prime rate plus 3%
on
any amounts outstanding for longer than 60 days.
5
In a suretyship attached to the credit application form, the
second defendant stood surety for the debts of the first defendant to
the plaintiff.
6
The first defendant operated two accounts with the plaintiff,
one for the Banson Trucking business and he other for the Tiro
business.
7
By summons taken out on 15 February 2010, the plaintiff sued
the defendants for the amount of R95 930,31, said to be outstanding
in relation to three invoices dated 23 July, 5 August and 29
September 2009 respectively plus some interest, less an amount of
R10
926,33.
8
In a separate action, the plaintiff has also sued the
defendants or the first defendant or a company said to be associated
with
the first defendant for an undisclosed amount said to reflect
the balance owing for the Tiro business. The pleadings in this
separate
action, brought in this court under case no 9168/2010, were
not put before me but the evidence disclosed that the claim for the
amount said to be owing for the Tiro business is due to be heard in
this court later in February 2012.
9
It was common cause that the goods reflected in the three
invoices were duly delivered. It was also admitted that the first
defendant
gave the plaintiff two cheques for R50 000 each toward its
indebtedness, the first drawn by the plaintiff and dated 7 August
2009
and the second drawn by a close corporation called JQ Civils and
Transport CC dated 30 September 2009. JQ Civils was apparently
at the
time controlled by Jason.
10
The issue which crystallised in relation to the plaintiff’s
claim in the present action was whether the two cheques had been
allocated by express agreement between Basil for the first defendant
and Herman Bezuidenhout for the plaintiff towards these three
specific invoices or whether no allocation had been made in relation
to the payments, in which case they would by operation of
law have
been allocated towards the oldest debts owed by the first defendant
to the plaintiff.
11
This case was considerably troubled because the actual dispute
between the parties was nowhere reflected on the pleadings. The
confusion
was compounded by the conduct of the defendants, or rather
their legal representatives, who seized upon the fact that the
plaintiff
had during its existence had different company numbers and
the fact that the case as originally pleaded by the plaintiff
attributed
to the plaintiff an outdated company number.
12
In their plea as originally framed, the defendants pleaded
that while they admitted that the plaintiff was a duly incorporated
company,
they asserted, eccentrically, that the plaintiff “lacked
the necessary locus standi’’. No further indication was
given in the plea for why this assertion was made. It was ultimately
made clear to the plaintiff that the real issue which the
defendants
were trying to raise was not whether the plaintiff had locus standi,
but whether the plaintiff had been deregistered.
In paragraph 2 of a
minute of a pretrial conference held on 20 January 2012, the
defendants stated that it was still their case
that the plaintiff “is
not incorporated in terms of the Company Laws”.
13
At the start of the trial before me on 31 January 2012, the
plaintiff moved, in terms of a written application, for what it had
every right to assume was merely a formal amendment to change the
company number attributed in the pleadings to the plaintiff. But
the
amendment was strenuously opposed by the defendants on grounds at
first quite incoherent. The defendants argued, as what defendants'
counsel termed a point in limine, that the plaintiffs action should
be struck from the roll with attorney and client costs. After
considerable questioning by me, it emerged that the defendant
asserted that its case was that there were two companies called by
the same name that the plaintiff bears; that the company with which
the first defendant had contracted had been deregistered and
that the
other company, which if the amendment were granted (so ran the
contention) would become the plaintiff, had had no business
dealings
with the defendants.
14
I then allowed the amendments, refused the relief sought in
the point in limine, reserved costs and invited the defendants to
address
me on how much time they required to plead consequentially to
the plaintiff’s amended claim. Consistent, I regret to say,
with a strategy to delay the hearing of this case on its merits known
colloquially as ducking and diving, in which, deplorably,
the
defendants persisted throughout the trial, the defendants’
counsel asked that the case be postponed sine die for them
to amend
their plea. I refused this request and directed that the matter stand
to the following morning for this purpose. The defendants
duly
produced an amended plea and the plaintiff a replication and the
trial proceeded.
15
The plaintiff's auditor, Mr Boake testified on this issue. He
explained that the plaintiff had been registered in Bophuthatswana
and thereafter registered in the Republic as an external company. It
changed its name to its present one. The auditors found out
that a
process of deregistration had been initiated against the plaintiff
but not completed. The auditors took steps and the deregistration
process was stopped. So the plaintiff was never deregistered. When
Bophuthatswana was re incorporated into the Republic, the plaintiff
ceased to be an external company and was allocated a new number by
the registering authority. There was no second company with
the name
of the plaintiff and never had been. This evidence was not disputed
but Mr Boake was subjected to a lengthy, tedious and
ultimately
irrelevant cross-examination. In all at least a day and a half of
court time was wasted by this unnecessary excursion.
The defendants
did not forthrightly acknowledge that the point was abandoned until
they used the fact that the point was without
substance as the
starting point for another interlocutory application, with which I
shall deal later.
16
I reject the defendants’ submissions that it was
reasonable for them to have raised the point at all. The foundation
of the
point was flimsy in the extreme: some cryptic utterances in
documents generated by Cipro and accessible through the Internet. No
effort at all was made by enquiry, subpoena, rule 35 notices or the
like to see whether there was any substance in the unlikely
propositions advanced by counsel for the defendants. Even though the
amendment was sought at a very late stage and thus constitutes
a
substantial indulgence sought by the plaintiff, I intend to mark my
disapproval of the conduct of the defendants in this regard
by
awarding the costs of the amendment and the costs wasted by the
amendment to the plaintiff to be taxed as between attorney and
client. I said during the trial to the defendant’s counsel that
high court litigation should not be conducted this way. I
see no
reason to reconsider this view.
17
The other interlocutory application was one brought by the
defendants on notice of motion on the third day of the trial, after
much
evidence had been led, for consolidation of the two actions. The
basis for this application was that the defendants accepted that
there was no second company and that the evidence to be given at the
two trials would thus overlap. The reason given by the defendants’
attorney in his affidavit delivered in support of the application for
the delay in bringing the application was that the defendants'
counsel is inexperienced. I refused the application and said I would
give reasons later.
18
If the application for consolidation had been made at the
commencement of the hearing before me, f might have granted it. There
is possibly an overlap in evidence in the two actions. But the
application for consolidation was made after the defendants’
point in limine had been rejected, evidence had been led and the
issue had become a narrow one. I was not satisfied that the
application
for consolidation was made bona fide. It seems to me to
have been yet another attempt to delay an adjudication of the merits
of
the plaintiff’s claim as presented to me for determination.
The application for consolidation (with the concomitant application
for a postponement of this trial) would not have been made if the
defendants’ lawyers thought their prospects of success
before
me were any good. To what extent the application was the product of
inexperience on the part of the defendant’s counsel,
I need not
decide. The defendants’ attorney was in court throughout the
trial. He does not say that he is inexperienced.
Objectively,
independent of the motives or capacity for professional judgment of
the defendants’ lawyers, the application
for consolidation was
an abuse. I award the plaintiff the costs of the application for
consolidation, to be taxed on the scale
as between attorney and
client.
19
The way is now clear to deal with the issue of payment, the
sole issue remaining between the parties in relation to the present
claim.
20
I have mentioned that the alleged allocation agreements are
nowhere alleged in the defendants’ papers. The affidavit
resisting
an application for summary judgment brought by the
plaintiff was made by Mrs van der Westhuizen on her own behalf and on
behalf
of the first defendant. In this affidavit, she raises numerous
defences, including that goods were not delivered, that the first
defendant was invoiced for the services of the fitter, who was
according to Mrs van der Westhuizen supposed to render services
without direct cost to the first defendant, that services charged for
were not rendered at all, that the first defendant’s
subcontractors and the defendant were charged for the same work and
that repairs were done without authorisation.
21
Mrs van der Westhuizen goes on to list in her affidavit the
payments made by the first defendant in 2009 and concludes as
follows:
In
view of the abovementioned investigation concerning the fallacious
and incorrect invoices, the [First] Defendant has a counterclaim
for
at least R150 000.00.
22
Early in the trial, the plaintiff tendered a bundle which
included a reconciliation of the two accounts in its books for which
the
first defendant was liable, ie that of Banson Trucking and that
of Tiro. The defendants objected to the document because it had
not
been discovered. The document was generated by the plaintiffs
accounting system and was printed for the first time on 27 January
2012. The defendants’ position was that the document should be
ruled inadmissible. I ruled against the objection and invited
the
defendants to take time to study the document. My invitation was
refused. The defendants’ position is that they are prejudiced
by the admission of this document because it deals with matters
relevant to the trial due to take place later in February and they
were taken unaware for the purposes of this trial. This cannot be
true. Mrs van der Westhuizen's affidavit shows that she had done
an
investigation which included both the Banson Trucking and the Tiro
accounts. If she had only done an investigation of the Banson
account, she could not have concluded that the plaintiff owed the
first defendant at least R150 000 because the defendants' version
given under oath before me was that the Banson account had been
conducted largely on a cash against delivery basis. The defendants’
case in the summary judgment affidavit was that invoices which the
first defendant has not paid need not, on the grounds set out
by Mrs
van der Westhuizen in her affidavit, be paid at all. Those disputed
invoices related, according to the defendants, exclusively,
to the
Tiro business. At my invitation, the defendants prepared and
introduced into evidence their own reconciliation of the two
accounts. The evidence of Thomas Rundle as to what the plaintiff's
books said was not challenged in cross- examination. Not one
of the
entries relied upon by the plaintiff was identified by the
defendants’ counsel as incorrect. I invited the defendant’
counsel to apply to re-open the defendants’ case to deal with
any evidence that had not been put to the defendants’
witnesses
in cross-examination. The defendants’ counsel declined the
invitation. I reject the evidence tendered by the defendants
that the
defendants were unable because of lack of time to prepare unable to
meet the plaintiff’s case that a substantial
amount was owed on
the Banson Trucking and Tiro accounts, against which, save for the
amount of R10 926,33, the two payments of
R50 000 each were
allocated.
23
As to the alleged counterclaim for at least R150 000, there
was of course no counterclaim brought in the present action and it
was
admitted on behalf of the defendants that no counterclaim had
been raised in the second action either, due to come on later in
February 2012. Rather impudently, however, it was asserted on behalf
of the defendants that the first defendant reserved its rights
to
bring such a counterclaim in the future.
24
The evidence that there were agreements regarding the
allocation of the two payments of R50 000 each was given on behalf of
the
defendants by Basil van der Westhuizen. He was not a good
witness. He was particularly evasive as to the financial position of
the defendant at the relevant time and the question whether there
were amounts owed to the defendant in addition to the three invoices
relied upon by the plaintiff. I n my view he was evasive because he
knew that an admission of the true position would weaken the
defendants’ case. He succeeded in evading all questions on this
important point by testifying that his mother, Mrs van der
Westhuizen, was the right person to ask about these matters. But Mrs
van der Westhuizen testified that she knew nothing about the
first
defendant’s financial position and said that these questions
should be put to Basil. Mrs van der Westhuizen even denied
that the
first defendant was in financial difficulties at the relevant time.
In this regard she was untruthful, in my view. The
evidence of Basil
van der Westhuizen, Herman Bezuidenhout and Thomas Rundle prove that
it was. Mrs van der Westhuizen was an exceptionally
bad witness. Her
efforts to evade providing relevant information went so far that when
she was asked to provide, on the following
day, information which she
said she had at home, she shaid that she would be unable to do so
because her car was in for repairs
and would thus be unable to come
to court. But the following day, she was in the well of the court,
listening to the evidence.
25
Basil explained the first payment of R50 000 as follows: He
was unaware of the amount of the credit the first defendant was to be
given for certain old tyre casings, a question with which I shall
deal below. He received the tyres on invoice no 76419 dated 23
July
2009 for R39 216 at the same time as the tyres on invoice no 76653
dated
5
August
2009 for R11 136,66. The total of the two purchases, before the
credit reflected in the former invoice, was R50 352,66. He
and
Bezuidenhout had a good relationship and did not worry themselves if
there was a small over- or underpayment.
26
The third invoice, no 77558 dated 29 September 2009 for R55
342,17 he explains in relation to the second payment of R50 000 in a
similar way.
27
Herman Bezuidenhout gave evidence. He denied that there had
been any express allocation agreements at the time the relevant
orders,
which led to the three invoices in question, were placed. He
said that at the relevant time in 2009, because the first defendant
was in arrears with its payments, he insisted on a payment on account
before any further goods were supplied to the first defendant,
in
order, as he put it, to keep the first defendant's account open. If
Basil so specified, Bezuidenhout said, the payments would
be
allocated to invoices identified by him. But, he said, no such
specification was made, so that the default position applied,
ie that
payments would be allocated to the oldest debts.
28
Bezuidenhout agreed with Basil that he and Basil had a good
relationship. Bezuidenhout was taken by the first defendant into its
confidence as regards the first defendant’s financial
difficulties. He tried as far as he could, because of what he called
the investment the plaintiff had made in the first defendant (by
which he meant the investment a supplier makes in a customer,
particularly one which owes the supplier money), to accommodate the
first defendant and help it through its troubles.
29
I find Bezuidenhout to be an honest witness. He tried to tell
the truth. However, his evidence was far from perfect. He was
hesitant
and in some respects confused about the arrangements he had
made with Basil.
30
A subsidiary dispute arose in relation to a credit amount of
R10 926,33 reflected on the first of the three invoices in question.
Basil said that the credit was for old tyre casings supplied to the
plaintiff by the first defendant. He said that at the time
he caused
the payment of the first R50 000 to be made, he was unaware of the
amount which the plaintiff would pay the first defendant
for these
casings (by way of a credit to its Banson Trucking account) and thus
did not deduct it from the R50 000.
31
Bezuidenhout, on the other hand said that the credit amount of
R10 926, 33 was a payment by the first defendant. He explained that
credits as such were accompanied by a journal narrative so that the
amount could not have been a credit against casings supplied.
In any
event, Bezuidenhout said, the casings supplied by the first defendant
had ultimately been returned to the first defendant
in the form of
retreaded tyres so no credit was due to the first defendant in that
respect. I find Bezuidenhout’s evidence
on this question
convincing. He is corroborated by the evidence of Thomas Rundle who
explained what the plaintiff’s books
of account said relevant
to this action.
32
Thomas Rundle testified that according to the plaintiff’s
books, the balances owing to the plaintiff immediately before the
first payment of R50 000 on 11 August 2009 were R90 243,04 on the
Banson Trucking account and R267 953,03 on the Tiro account.
As I
have said, the defendants made no attempt to contradict this
evidence. Their explanation for their failure to do so, I have
found,
is untruthful.
I
therefore conclude that the evidence of Thomas Rundle in this regard
is substantially correct.
33
In my view the probabilities favour the plaintiff. I say so
for the following reasons:
33.1
If the payments had indeed been allocated by the first
defendant to the specific invoices, the exact amounts would have been
paid.
33.2
In the case of the second payment of R50 000 there was on the
defendants’ version an underpayment of R5 342,17. If the
agreement
had been that the first defendant would pay for the goods
sold under that invoice against delivery, which in these
circumstances
would be equivalent to an agreement that the amount
paid would be allocated against the invoice in question, then
Bezuidenhout
would have refused to hand over the goods until the
amount agreed had been paid or at least raised the matter, which on
any version
Bezuidenhout did not do.
33.3
If the allocation agreements in fact were concluded, there
would have been reference to them in the defendants' summary judgment
affidavit and in the pleadings. The absence of any such reference
suggests that the defendants’ evidence regarding the allocation
agreements is a recent fabrication.
33.4
If the allocation agreements in fact were concluded,
Bezuidenhout would probably have implemented them. The plaintiff had
nothing
to gain by not doing so.
33.5
I give some weight in assessing the probabilities to the
defendants’ attempts to have the case postponed rather than
meet
the plaintiff’s case on its merits. If the defendants had
believed their case to be just, they would have been unlikely to
try
to have the case postponed.
34
When dealing, as I do in this case, with two irreconcilable
versions, I must apply the test in
Stellenbosch
Farmers’ Winery Group Ltd and Another v Martell et Cie and
Others
2003 1 SA11 SCA para 5. Having done so, I conclude that
the defendants have failed to discharge the onus of proving that they
have
paid the amounts reflected in the three invoices in question.
The plaintiff is therefore entitled to judgment as prayed against
the
first defendant. No special defences having been raised by the second
defendant, the plaintiff is entitled to judgment as prayed
against
her as well.
35
This brings me to costs. The capital amount claimed was within
the jurisdiction of the magistrate’s court. This case was
poorly
presented on both sides. Inadequate preparation resulted in a
plethora of bundles, at least two of which were inadequately
paginated.
The duplication of bundles led to much time wasting as
counsel, the court and the witness struggled to find the right
bundle. The
true nature of the issues only became apparent to counsel
after much debate between bench and bar. There was much
cross-examination,
especially on behalf of the defendants, that
proved to be entirely pointless. On numerous occasions I had to
intervene to curtail
this pointless cross-examination. The case as
formulated and presented does not justify high court costs. I intend
to grant the
plaintiff as the successful party costs on the
appropriate magistrate’s court scale.
36
As regards the scale on which the costs are to be taxed: as
against the first defendant, the plaintiff is entitled to costs on
the
attorney and client scale because that is what the parties
agreed.
37
As against the second defendant, I intend to grant costs on
the attorney and client scale as a mark of my disapproval of the way
in which her case was conducted. In this regard I take into account:
37.1
that the second defendant raised in the summary judgment
affidavit numerous defences which had no merit and were not proceeded
with;
37.2
the failure to raise in the summary judgment affidavit or in
the pleadings the defence actually advanced, ie that there had been
allocation agreements;
37.3
the dishonest manner in which the second defendant sought to
evade dealing with the plaintiff’s case that older unpaid debts
existed;
37.4
the dishonest assertion that the first defendant had a
counterclaim against the plaintiff of at least R150 000;
37.5
the attempts on the part of the second defendant to have the
case postponed rather than deal with the plaintiff’s claim on
its merits.
38
In the result, I make the following order:
1
Judgment is granted in favour of the plaintiff and against the
defendants for:
1.1
payment of the sum of R95 530,31;
1.2
interest on the sum of R95 530,31 at the prime rate of
Standard Bank plus 3% per annum, from 17 November 2009 to date of
payment;
1.3
costs of the action, including those relating to the
application for summary judgment, taxed on the appropriate
magistrate’s
court scale as between attorney and client;
1.4
Costs of the application for amendment pursuant to the notice
of application for amendment and the point in limine argued at the
commencement of the trial on 31 January 2012 and the costs wasted
thereby including the costs occasioned by the fact that the action
stood down until the following day, taxed on the appropriate
magistrate’s court scale as between attorney and client;
1.5
Costs of the application for consolidation brought pursuant to
the notice of motion dated 2 February 2012, taxed on the appropriate
magistrate's court scale as between attorney and client;
1.6
All costs occasioned when the trial of this action stood down,
save only those caused when the trial stood down during the evidence
of Mr Barden senior, taxed on the appropriate magistrate’s
court scale as between attorney and client.
2
All the above orders are granted against the defendants
jointly and severally, the one paying, the other to be absolved.
NB
Tuchten Judge of the High Court
6
February 2012