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[2012] ZAFSHC 140
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Voltex (Pty) Ltd t/a Litecor Bloemfontein v Du Randt NO and Others (3408/2010) [2012] ZAFSHC 140 (10 August 2012)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No.: 3408/2010
In the matter between:
VOLTEX (PTY) LTD
t/a LITECOR BLOEMFONTEIN
…..................
Plaintiff
and
R DU RANDT N.O.
(in his capacity as
Trustee of the
STORAGE CONCEPTS
TRUST, IT 393/2003)
…................
First
Defendant
W J DU RANDT N.O.
(in his capacity as
Trustee of the
STORAGE CONCEPTS
TRUST, IT 393/2003)
…..........
Second
Defendant
CALVIN DU RANDT
….......................................................
Third
Defendant
_______________________________________________________
HEARD ON:
24 & 25 JULY 2012
_______________________________________________________
JUDGMENT:
LEKALE, J
_______________________________________________________
DELIVERED ON:
10 AUGUST 2012
_______________________________________________________
INTRODUCTION AND
BACKGROUND
[1] This is a claim for
payment of R53 549,92 for goods allegedly sold and delivered to
defendants in their representative capacities
as trustees by the
plaintiff.
[2] The plaintiff is a
registered private company which sells and distributes electrical
products.
[3] The first and second
defendants are cited in their respective capacities as the trustees
of the Storage Concepts Trust with
registration number IT 393/2003
(the Trust).
[4] The third defendant
is cited both in his capacity as a trustee of the Trust and personal
capacity as surety and co-principal
debtor
in solidum
with the
Trust.
[5] During October 2007
the plaintiff and the Trust concluded a Credit Facilities Agreement
in terms of which they,
inter alia
, agreed that:
5.1 the plaintiff grants
the Trust a credit limit of R100 000,00;
5.2 the purchase price
shall be payable by the Trust within 30 days of the date of statement
unless agreed otherwise;
5.3 a certificate of
balance signed by the plaintiff’s secretary/manager or any
director/member reflecting the amount owing
by the Trust and the fact
that that amount is due, owing and unpaid shall be
prima facie
proof of the effects therein stated for the purpose of,
inter
alia
, any action and that it shall rest, entirely, with the Trust
to prove that such amount is not owing, due and/or unpaid;
5.4 the third defendant
bound himself as surety for and co-principal debtor
in solidum
with the Trust in favour of the plaintiff for payment of any amounts
owing to the plaintiff by the Trust;
5.5 the Trust agreed to
pay all legal costs incurred by plaintiff in any action against the
Trust in any competent court inclusive
of costs on an attorney and
own client scale.
[6] On the 1
st
September 2009 Lifes’ Comfort Solutions (LCS), a Lesotho based
client of the Trust, placed an urgent order for a large consignment
of lights and accompanying electrical installation with the
plaintiff.
[7] LCS, however, did not
have a credit facility with the plaintiff to facilitate the speedy
processing of that order. It, therefore,
approached the Trust for
assistance and the latter allowed it to utilise its account with the
plaintiff for that purpose and, further,
proceeded to apply for an
increase in its credit limit with the plaintiff to accommodate the
order in question.
[8] The plaintiff,
eventually, effected deliveries in Lesotho at LCS’s premises
and submitted invoices to the Trust for payment.
[9] The invoices
submitted, however, did not reflect the Trust’s VAT number and
some stock had to be returned because it was
not utilised.
[10] The plaintiff,
eventually, collected the surplus stock from LCS in Lesotho and
agreed to credit the Trust accordingly and to
return some of the
stock to the supplier (Radiant) subject to the latter’s return
rules.
[11] Radiant agreed to
accept returns with a 15% handling fee except for some specified
items of stock.
[12] Plaintiff furnished
the Trust with a sales analysis report reflecting,
inter alia
,
invoice numbers and the stock to be returned to it and to Radiant.
[13] On the 28
th
February 2010 the plaintiff reflected the balance owing on the
Trust’s account as being R332 382,42.
[14] On the 31
st
March 2010 the plaintiff recorded a receipt of R212 411,08 and R12
572,49 from the Trust and reflected a balance of R107 398,85
on the
opening balance of R332 382,42.
[15] On the 27
th
May 2010 the plaintiff signed off eight credit notes in favour of the
Trust leaving the balance of R53 549,92 for which it, eventually,
issued summons against the defendants.
[16] The defendants
resist the claim on the grounds that the Trust remitted an amount of
R212 411,08 on the 31
st
March 2010 in full and final
settlement of the amount due and payable to the exclusion of the VAT
amount and the purchase prices
of all the stock returned as advised
by the plaintiff.
ISSUES IN DISPUTE
[17] In the pre-trial
minute the parties, effectively, limited the issue to be determined
to the question whether or not the Trust
is indebted to the plaintiff
in the amount of R53 549,92 in respect of goods sold and delivered by
the plaintiff at the Trust’s
special instance and request.
[18] In argument the
defendants contend that available evidence does not sustain the
assertions made in the summons in that no contractual
relationship
has been established between the Trust and the plaintiff.
PLAINTIFF’S
CASE
[19]
Chantell Human
testified to,
inter alia
, the effect that she received the
order from LCS but could not process the same because the latter did
not have an account with
the plaintiff. She gave LCS three payment
options including the possibility of using the account of an existing
client of the plaintiff.
She, eventually, received an electronic mail
from LCS to the effect that the third defendant had agreed that the
Trust’s
account may be used for the relevant order. The third
defendant, on his part, confirmed the authorisation and placed the
order
telephonically. The Trust, eventually, applied for an increase
in its credit limit with the plaintiff in order to accommodate the
relevant order. She did not handle accounts and the lady responsible
for the same initially omitted to reflect the Trust’s
VAT
registration number on the tax invoices issued. She went to Lesotho
to collect surplus stock and identified what was to be
credited to
the Trust’s account. The Trust never queried the deliveries
which were made in Lesotho and the third defendant
only raised the
issue concerning the absence of the Trust’s VAT number on tax
invoices. The Trust account had a debit balance
when the order was
placed.
[20]
Petrus Johannes
Potgieter
testified to the effect that he is the plaintiff’s
Regional Manager. He, further, confirmed that the certificate of
balance
contained in exhibit “D” as document number 16
was prepared by the plaintiff’s Legal General Manager. Exhibit
“E” is the original certificate of balance. He does not
know the relevant account as he was not at the Bloemfontein
branch at
the relevant time.
DEFENDANTS’
VERSION
[21]
Calvin du Randt
testified to,
inter alia
, the effect that the Trust was
handling the project in question in Lesotho. The Trust gave
permission to LCS to use its account
for the project in question. The
buyer was LCS while the Trust’s role was limited to being a
middle man. The stock was delivered
in Lesotho and directly to LCS by
the plaintiff. After the plaintiff had indicated the items to be
taken back as set out in pages
50 to and including 52 of exhibit “C”,
he secured the assistance of his auditor to determine the amount
owing and payable
to the plaintiff. In so doing he deducted the value
of the items identified as being returnable as well as the VAT
amount. The
Trust could not pay the VAT amount because it would not
have been able to claim input tax due to the absence of its VAT
registration
number on the invoices. He came to the total of R212
411,08 which the Trust paid as per page 54 of exhibit “C”.
According
to him the value of returnable goods was R86 238,22. The
Trust did not place an order with the plaintiff nor did it receive
any
stock from the plaintiff.
CONTENTIONS BY THE
PARTIES
[22] In argument Ms De
Kock, for the plaintiff, submits,
inter alia
, that the
certificate of balance, as agreed between the Trust and the
plaintiff, constitutes
prima facie
evidence which required the
Trust to answer upon the mere production of the certificate. It is
not sufficient, in law, for the
defendant to cast suspicion on the
correctness of the facts established by the said certificate. In her
view, the defendants’
attack upon the certificate must be based
on some substantial foundation. The contractual relationship exists
only between the
plaintiff and the defendant and not between the
plaintiff and LCS.
[23] Mr Benade, for the
defendants, submits that there exists no contractual relationship
between the plaintiff and the Trust because
no delegation took place
as the contract between the Trust and LCS was a mandate to pay.
According to him in any event the amount
due and payable was paid in
full by the Trust.
APPLICABLE LAW
[24] The parties are
ad
idem
that a certificate of balance constitutes
prima facie
evidence of the balance owing. Such evidence can still be disturbed
by adducing evidence to the contrary. If at the end of the
case, the
prima facie
evidence of the certificate is unaffected by other
evidence, such evidence becomes conclusive proof of the balance
owing. (See
SENEKAL v TRUST BANK OF AFRICA LTD
1978 (3)
SA 375
(A) and
SOLOMON NO AND OTHERS v SPUR COOL CORPORATION
(PTY) LTD AND OTHERS
2002 (5) SA 214
(CPD) at 273 G –
H.)
[25] Delegation, as a
form of novation, consists of an agreement among all the parties
concerned in terms of which a third party
is introduced as a debtor
in substitution for the original debtor who is discharged. It
requires, for its conclusion, that the
“creditor, the original
debtor and the debtor proposed in his place... to be parties”.
(See
VAN ACHTERBERG v WALTERS
1950 (3) SA 734
(T) at
745 D – E.)
[26] A mandate to pay
arises when the debtor requests a third party to pay his creditor
with the result that the debtor remains
liable and there exists no
contractual relationship between the creditor and the third party.
(See Christie’s:
THE LAW OF CONTRACT IN SOUTH AFRICA
,
6
th
Edition, Lexis Nexis, p 480.)
[27] A contract of sale
arises when the parties agree on the thing to be sold (
merx
)
and the price (
pretium
) to be paid therefor. (See
DHARUMPAL
TRANSPORT (PTY) LTD v DHARUMPAL
1956 (1) SA 700
(A) at 707
C.)
[28] No deduction of
input tax can be allowed in respect of a taxable supply unless a
valid tax invoice issued in relation to that
supply is held by the
vendor seeking to make such a deduction at the time when a return in
respect of that supply is furnished.
(See section 16(2) of Value
Added Tax Act 89 of 1991 (VAT Act).)
[29] A valid full tax
invoice reflects,
inter alia
, the particulars of the recipient
of a taxable supply as well as his VAT registration number if he is a
registered vendor. (See
section 20(4) of VAT Act.)
[30] An abridged tax
invoice may not contain the particulars of the recipient of the
taxable supply and can only be issued if the
consideration paid for
the supply is less than R3 000,00. (See section 20(5) of VAT Act.)
FINDINGS AND
APPLICATION OF THE LAW
[31] It is clear from
applicable law that delegation, as a form of novation, is essentially
transfer of a pre-existing debt to a
third party as a new debtor. It
follows, therefore, that in the present case there should have
existed a sale agreement, giving
rise to a debt, between the
plaintiff and LCS for a delegation saddling the Trust with a
contractual liability to ensue.
[32] Ms De Kock argues
against the existence of such a sale agreement. Mr Benade, on his
part, maintains that such an agreement
existed, but holds that a
mandate to pay and not a delegation ensued thereafter between LCS and
the Trust.
[33] I am persuaded by
available evidence that a sale agreement was concluded between the
plaintiff and LCS when the latter, represented
by its Chief Executive
Officer (CEO), secured a quotation from the plaintiff and placed an
order, which was accepted, in terms
thereof. The parties agreed on
the
merx
and the price. The only outstanding issue was how the
price was to be paid. That issue is not an essential element of a
sale agreement.
The fact that LCS was given three options as to the
method of payment is inconsequential on the validity of the sale
contract.
[34] I am, further,
satisfied that a delegation eventuated when the Trust, through the
third defendant, agreed to both LCS’s
CEO and the plaintiff
that the order placed by LCS may be processed on its account. In this
regard it should be noted that the
distinguishing feature of a
mandate to pay is that the contractual relationship is between the
debtor and a third party and no
privity of contract arises between
the creditor and the third party. The third party pays for the
account of and on behalf of the
debtor whereas, in the present
matter, the debits were for the account of the Trust.
[35] The next question is
whether or not the defendants’ attack upon the certificate has
affected the certificate such that
the
prima facie
evidence
afforded by it has been displaced to the extent that it cannot be
said to have become sufficient proof of the extent of
the liability
of the Trust.
[36] The defendants’
case, through the mouth of the third defendant as a witness, is that
the balance which was lawfully owing
was paid insofar as it was not
obliged, in law and fairness, to pay VAT amounts on the basis of
invalid tax invoices and that certain
items were identified as
returnable.
[37] I must hasten to
mention, en passant, that it did not behove the Trust to calculate
the balance owing on the basis of unconfirmed
facts. As correctly
submitted for the plaintiff, the notes on p 50 of exhibit “C”
were to,
inter alia
, the effect that items were to be returned
and Radiant still had to advise on the matter. The correct and
reliable information
on the amounts payable would only have been
ascertained after,
inter alia
, Radiant, as the supplier, had
accepted the returns and charged its handling fees where applicable.
[38] The parties are,
effectively, in agreement that the plaintiff’s case with regard
to how the balance claimed is made up
is as reflected on p 1 of
exhibit “E”. A scrutiny of the invoices listed therein
reveals that only two of the invoices
involved were identified as
returnable to Radiant. The rest of the invoices were, thus, indicated
as being payable by the Trust
without reservation.
[39] The defendants’
case is effectively that the invoices in question have been paid. In
this regard Mr Benade, effectively,
submits that the relevant
invoices were included in the total amount from which the VAT amounts
and the value of the returns were
deducted when the Trust came up
with the amount which it paid.
[40] In this regard the
parties are in dispute over whether or not the Trust was entitled to
make the said deductions before credit
notes had been passed by the
plaintiff in its favour.
[41] As Ms De Kock
correctly contends for the plaintiff, credit notes were only issued
on the 3
rd
May 2010 after the Trust had paid the R212
411,08 on the 31
st
March 2010. Chantell Human’s
evidence and entries in the relevant customer sales analysis clearly
indicate that the returns
were yet to be made and the supplier’s
advice was yet to be secured. In my view, the certificate of balance
herein also serves
as an advice on the amount owing after the credit
notes had been passed.
[42] Radiant, the
supplier, agreed to accept returned stock for credit with a 15%
handling fee excluding some faulty BG 16. The
only BG 16 apparent on
p 51 of exhibit “C” relates to invoice number 9975389 for
R17 387,70. This invoice is part of
the invoices in respect of which
summons was issued. The Trust’s case, as per third defendant’s
testimony, is effectively
that that invoice was not paid insofar as
he testified that he deducted the value of all stock indicated by
Chantell Human as returnable.
The fundamental difference between the
calculations of the parties herein appear to stem from the total
balance from which payment
of R212 411,08 was deducted when it was
made on the 31
st
March 2010. Where the plaintiff works
from R332 382,42 the Trust’s point of departure appears to be
R298 649,30. It is not
clear how the Trust came to that balance
because page 50 of exhibit “C” reflects R298 884,60.
[43] Invoice number
9976294, which is also included in the list of invoices which form
the basis of the amount being claimed by
the plaintiff, was also
indicated as being returnable subject to Radiant’s advice. On
the 3
rd
May 2010 the plaintiff passed eight credit notes
against some 20 invoices in respect of items which were indicated as
being returnable.
[44] It is, therefore,
probable, in my view, that the certificate of balance is correct in
respect of the invoices payable. The
defendants’ evidence does
not affect the certificate of balance in that respect.
[45] The next enquiry is
whether or not the Trust is obliged to pay VAT on the relevant
invoices. Ms De Kock correctly concedes
that invoices which do not
contain the Trust’s VAT registration number are, in law,
invalid. She, however, correctly submits
that such particulars may
not be furnished in respect of a cash consideration which is less
than R3 000,00. In this regard she
concludes that R6 286,89 may be
deducted in respect of the VAT charged on the relevant invoices. It
is, however, possible that
the total balance from which the plaintiff
worked when the Trust effected payment, includes other considerations
in respect of
which full tax invoices should have been issued. The
evidentiary burden was on the defendants to identify such
considerations in
the Trust’s attack against the certificate of
balance. Such considerations were not disclosed to the court.
COSTS
[46] The parties are
effectively in agreement that it would be fair to award costs on a
Magistrate’s Court scale regard being
had to the capital amount
being claimed.
[47] Ms De Kock, further,
reminds the court that in terms of the agreement between the parties
the Trust accepted responsibility
for all costs incurred by the
plaintiff in any action against it, inclusive of attorney and own
client costs.
[48] I am satisfied that
the plaintiff has achieved substantial success in its claim and is,
as such, entitled to its costs in accordance
with the agreement
between the parties.
ORDER
[49] In the result the
following order is made against the Trust, as represented by the
three defendants, and the third defendant
in his personal capacity
jointly and severally, the one paying, the other to be absolved:
49.1 Payment of R47
263,03;
49.2 Payment of interest
on the above amount at the rate of 15,5% from the 1
st
July
2010 to date of final payment;
49.3 Attorney and own
client costs on the basis of Magistrate’s Court scale.
______________
L. J. LEKALE, J
On behalf of plaintiff:
Adv D de Kock
Instructed by:
Matsepes Inc
Aliwal Street
BLOEMFONTEIN
On behalf of defendants:
Adv H J Benade
Instructed by:
Naudes
BLOEMFONTEIN
/sp