DPI Plastics (Pty) Limited Trading as Incledon v Route 7 Trading 181 CC and Another (CC23195/2013) [2017] ZAGPPHC 638 (3 October 2017)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA,

GAUTENG DIVISION, PRETORIA

CASE NO: CC 23195/2013

Not reportable

Not of interest to other judges

Revised.

In the matter between:

DPI PLASTICS (PTY) LIMITED TRADING AS

INCLEDON Plaintiff

and

ROUTE 7 TRADING 181 CC First Defendant

MATHEBULA SOLOMON DUNGAMAZI Second Defendant

JUDGMENT

MAKHOBA, AJ:

[1] The Plaintiff is DPI Plastics (Pty) Ltd t/a lncledon, a company, duly registered according to the Company laws of South Africa and carrying on business at corner Barlow and Cavaleross roads, Germiston. The Plaintiff's business is the sale of water reticulation, drainage pipes, langers, valves and coupling fittings.

[2] The first Defendant was awarded a contract by Zululand District Municipality to do work for them. In order to do the work, first

Defendant bought goods from the Plaintiff.

[3] Plaintiff and First Defendant entered into a credit agreement, first Defendant was represented by the second Defendant. The contract was signed on the 3th July 2010 at or near Nelspruit. In terms of this agreement, the Plaintiff granted credit facilities to the first Defendant.

[4] Goods were delivered to the first Defendant however first Defendant returned some of the goods to the Plaintiff and refused to pay for them. Plaintiff refused to take the goods back and demanded payment from the first and second Defendants.

[5] The second Defendant is the director of the first Defendant and he signed as surety and co-principal debtor for the first Defendant. The second Defendant was not involved in the day-to-day running of the business. The business is managed by one Elvis Fakude.

[6] In this matter the following is common cause: that the goods were ordered by the first Defendant from the Plaintiff. Plaintiff

delivered goods to the first Defendant. Subsequently some of the goods ordered were taken back to the Plaintiff by the first Defendant

and these were not paid for by the first Defendant.

[7] It is also common cause that on the 3rd October 2013 a meeting was held between the first Defendant, second Defendant and the Plaintiff. In this meeting it was agreed that first Defendant would pay an amount of R500 000.00 to the Plaintiff as an interim payment. This amount was duly paid for by the first Defendant.

[8] In addition, it is common cause that the second Defendant signed the contract as surety and co-principal debtor for the first Defendant.

[9] In dispute between the parties is whether the first and second Defendant are indebted to the Plaintiff in the sum of R971 763.24,

which amount is for goods ordered by first Defendant and delivered by the Plaintiff to the first Defendant.

[10] Plaintiff called only two witnesses, namely Warren Daniels and Austin Savage. Daniels testified that he is a Civil Sales Manager of the Plaintiff in Kwa-Zulu Natal. During January 2011, he took over the supervision of the account of the first Defendant with the Plaintiff. He dealt mainly with Elvis Fakude. From January 2011, the first Defendant placed orders with the Plaintiff. All orders placed by the first Defendant, first Defendant gave size description and quantity of the goods ordered.

[11] The Plaintiff's total claim against the first and second Defendants related to five invoices in the total of R979 002.98 for goods sold and delivered during the period April 2012 and June 2012.

[12] The witness testified further that the goods in dispute between the parties are an order of 40 bar valves which order was placed to Plaintiff by the Defendants. The 40 bar valves are specially manufactured and imported and cannot be sold to any other customer.

In other words, these are not off-the-shelf goods.

[13] Mr Daniels testified further that during July 2012, Elvis Fakude arrived at the premises of the Plaintiff and returned the 40 bar valves. Elvis requested to be credited for the returned goods, but he (Mr Daniels) refused to do so. Nevertheless, the goods were off-loaded by Elvis. These goods were quarantined and stored in the warehouse.

[14] On the 12th September 2012 a meeting was convened between the representatives of the Plaintiff and the first Defendant and the meeting was chaired by Austin Savage of the Building Credit Management CC. For the Plaintiff, the meeting was attended by the witness himself, Dhereka Yagoo (Plaintiff's Credit Controller), Krish Naidoo (Plaintiff's Senior Estimator) and Elvis Fakude representing the first Defendant. At this meeting, Elvis was shown the outstanding balance due and payable by the first Defendant being R1479 002.98. The first Defendant was credited R7 239.14 for the "T16 gaskets". For the outstanding amount, Plaintiff demanded payment.

[15] A second meeting was held on the 3rd October 2012. In attendance, it was the same people for the Plaintiff. For the first and second Defendant, both Elvis and the second Defendant attended. The meeting was chaired by Austin Savage. In this meeting it was agreed by the parties that the first Defendant was to make an interim payment of R500 000.00, which was indeed paid on the 26th October 2012. The balance in the amount of R 979 002.98 was to be paid later and the dispute about the returned goods was not resolved.

[16] During cross-examination, it was put to Mr Daniels that the first Defendant placed a correct order to a certain Mr Marshall. The Plaintiff delivered incorrect goods and the delays in delivering the goods caused the first Defendant to incur extra costs.

[17] The second witness to be called by the Plaintiff is Aust in Savage. He testified that he is the accounts manager for Building Credit Management CC. BCM provides consulting services for various clients in the building, civil and engineering industries . They assist clients in the credit management and debt collection. The witness testified further about the meetings as testified by Mr Daniels as well as the payment of R500 000.00, which was made only to show intent to pay until other issues were resolved. The first Defendant wanted to be credited for the goods returned, however the Plaintiff refused to credit the goods that were returned. The minutes of the meetings were sent to the first and second Defendants, who did not raise any queries.

[18] Mr Savage testified further that Elvis reneged from the agreements reached during their meetings to pay. He (Elvis) alleged that as a result of late deliveries, he had to pay for labour whilst waiting for materials to arrive on site.

[19] Austin Savage sent numerous emails to Elvis Fakude in relation to the "standing time costs", "late receipt of materials" and "materials that were over or incorrectly supplied", however, Elvis did not reply to these emails. The information regarding the standing time claim was never supplied and a meeting to resolve the outstanding issues never took place.

[20] Plaintiff closed its case.

[21] Defendants also called two witnesses. Elvis Fakude testified that he was the one who dealt with the Plaintiff in the receipt and delivery of goods ordered from the Plaintiff. At first he dealt with Frank Turner who was employed by the Plaintiff and he first met him on the 9th April 2011.

[22] He testified that on the 19th April 2011 he met Frank Turner and placed an order for goods. These goods were delivered however they were incorrect goods. Frank sent a truck to fetch them, these were the 16 bar valves. On the 3rd October 2012 a meeting was held between Plaintiff, first Defendant, second Defendant and himself. In this meeting, first and second Defendant expressed willingness to pay. The following issues were raised with the Plaintiff in that meeting: incorrect goods delivered, oversupply of goods and delay in delivery of the goods. Elvis testified that Defendants have been waiting for these issues to be resolved and are surprised that the Plaintiff decided to sue.

[23] Cross-examined by Counsellor the Plaintiff, Elvis conceded that the R500 000.00 was not for final settlement and that the outstanding

issues were not resolved yet. Elvis further testified during cross-examination that he can't remember receiving emails and phone

calls made to him by Austin Savage.

[24] The second witness called was Mathebula Solomon Dungamazi. Mr Mathebula testified that he was the director of the first Defendant

and was not involved in the day­ to-day running of the first Defendant and Elvis is the one who is running the business. On the 3rd October 2012 he attended the meeting with the Plaintiff where it was agreed by the first Defendant and himself to pay the RSOO 000.00 as an interim payment. There are still outstanding issues to be resolved between the parties. Mr Mathebula confirmed that he signed the contract as surety and co-principal debtor for the first Defendant.

[25] Defendants closed their case. Both parties submitted their heads of argument.

[26] Amler's Precedents of Pleadings 4th edition page 277 defines a contract of sale as follows , "A party relying on a contract of sale must allege and prove a contract with the following essential elements:

(a) An agreement to purchase and sale;

(b) An agreement in respect of the thing purchased;

(c) And agreement in respect of price."

Christie's Law of Contract in South Africa, 7th edition page 587 paragraph two says, "A plaintiff who sues for payment must allege and prove performance of obligations entitling the plaintiff to payment, and no matter how positively the defendant alleges that the plaintiff has not performed but is in breach, the onus remains on the plaintiff to prove it has performed". See Cedarmont Store v Webster & Co 1922 TPD 106 and Edward A Shaw & Co (Pty) Ltd v Electronic Diamond Processing (Pty) Ltd 1971 (1) 581 (CC)

[27] Thus therefore Plaintiff in this case has the onus on a balance of probabilities, to prove it has performed according to the contract between it and the Defendants.

[28] The two witnesses for the Plaintiff gave their evidence in a clear and direct manner. Their evidence is straightforward and they both made a favourable impression to the court. Their evidence was not put in dispute by Counsel for the Defendant. The court is satisfied that the two witnesses for the Plaintiff were truthful.

[29] For the Defendants, the court does not believe Elvis Fakude when he says he cannot remember receiving emails from Mr Savage. It is clear to this court that he was trying to distance himself from knowledge of such emails. Each time a request for payment was made by the Plaintiff, Elvis will shift the goal posts and give various reasons for not paying.

[30] It is also clear from the papers and evidence before court that some of the issues raised by the Defendants were not pleaded by both Defendants.

[31] In their final submission to the court, the Defendants argue that the Plaintiff could not and should not have instituted the action. In as much as this might be a claim that action is premature, the Court finds that payment was due and payable. This submission cannot be a reason to refuse to pay. Plaintiff is entitled to institute action at any time.

[32] From the evidence before me, it is clear that the Plaintiff through Mr Savage made several attempts to resolve the issues with the Defendants, but to no avail. The goods returned by the Defendants were specifically made for the first Defendant. Plaintiff cannot therefore be expected to sell them from the shelf.

[33] The evidence before me shows that what the Plaintiff delivered to the first Defendants is what was ordered by the first Defendant, since these valves were specially made items with unique specification suited for the specific order. On the other hand, Defendants did not produce any evidence to show how the Plaintiff failed in its duty to deliver the correct items.

[34] The issue of "standing time on site" was not substantiated by the Defendants and there is no evidence before court to show this. Moreover, this was not pleaded by the Defendants.

[35] The court finds that the Plaintiff succeeded in proving on a balance of probabilities that it did perform as per contract and that it is entitled to payment by the Defendants.

[36] The following order is made:

36.1. Judgment in favour of the Plaintiff

36.2. Payment of the sum R971 763.24

36.3. Interest on the sum of R971 763.24 at the rate of 15.5% per annum from 13 May 2013 to the date of payment

36.4. Costs of suit on an attorney and client scale.

____________________

D MAKHOBA ACTING JUDGE OF THE HIGH COURT OF SOUTH AFRICA

CASE NO: 23195/2013

HEARD ON: 02 AUGUST 2017

FOR THE PLAINTIFF: ADV. M. DE BAER

INSTRUCTED BY: VAN VEIJREN INC.

FOR THE DEFENDANT: ADV. M.MLISANA

INSTRUCTED BY: MACBETH ATTORNEYS INC.

DATE OF JUDGMENT: 03 OCTOBER 2017