Qahoosein and Another v Bharshila Liquor store CC (A431/2011) [2013] ZAGPPHC 499 (4 December 2013)

IN THE NORTH GAUTENG HIGH COURT,

PRETORIA (REPUBLIC OF SOUTH AFRICAN

CASE NO: A431/2011

DATE: 04 DECEMBER 2013

In the matter between:

MOHAMED QAHOOSEIN...................................................1ST Appellant

(First Defendant in the Court a quo)

HARIF HOOSEIN DAWOOD................................................2nd Appellant

(Second Defendant in the Court a quo)

AND

BHARSHILA LIQUOR STORE CC........................................RESPONDENT

JUDGMENT

MASANGO AJ

This is an appeal against the judgement of my brother Matojane J. The judgment was in favour of the respondent (the plaintiff in the court a quo) and against the first and the second appellants(the defendants in the court a quo)This matter arose from the cause of action of goods sold and delivered to the appellants by the respondent. The respondent claims that as a result of the agreement he entered into with both the appellants he supplied cigarettes to the first appellant and the second appellant and as a results he suffered a loss of R1 304 292.95 which was due to non-payment by both the appellants of the cigarettes sold and delivered to them. The second appellant denied the existence of that agreement, the first appellant did not testify in the court a quo, and there was no submission made for and on behalf of the first appellant in this appeal.

The pleadings are part of the record and I will only deal with some of the particulars of claims which I think are relevant for the purpose of this judgment.

Paragraph 4 of the particulars of claims reads:

4.1 On or about the beginning of 2006 the defendants represented by the first defendant personaiiy approached the plaintiff to purchase vast quantities of cigarettes from the plaintiff

4.2 The plaintiff agreed to supply cigarettes to the defendants by utilising his access to Expo Liquor Wholesalers subject to obtaining the explicit agreement of the second defendant

4.3 Shortly thereafter during or about January 2006 and at Pretoria the second defendant confirmed the agreement between the plaintiff and the defendant by indicating his assent and affirming the terms in paragraph 5 below

Paragraph 5

5.1 it was an explicit alternatively implied alternatively tacit term of the agreement reached between the parties at Pretoria that ail orders would be paid within seven days of delivery and

5.2 The plaintiff to supply the defendants with cigarettes at the defendant's request.

5.3 The price payable would be charged by Expo Liquor Wholesaler plus fifty cent per carton.

Paragraph 9

The defendants are jointly and severally indebted for payment in the sum of R1 311902.50(one million three hundred and eleven thousand nine hundred and two rands and fifty cents) in respect of the goods sold and delivered by the plaintiff to the defendants at the latter's special instance and request

Paragraph 10

Notwithstanding a demand' alternatively demand is hereby given the defendants refused and or neglected to make payment in the amount ofRl 311 902.50 or any payment at all.

The first defendant admits that on the 2nd October 2006 and 6 October 2006 in terms of the agreement with the plaintiff, collected cigarettes from Expo Liquor Wholesalers as alleged in the particulars of claim.

The second defendant denies that he entered into any agreement with the plaintiff of the sale of cigarettes from the plaintiff or from Expo Liquor Wholesaler, denied that he accepted delivery or collected cigarettes from the plaintiff.

The court a quo found that the second appellant gave the respondent an undertaking that he will pay for the goods sold and delivered to the 1st appellant and has assumed the liability of a co-principal debtor for payment of the indebtedness of the first appellant to the respondent. The appellant have since appealed against the judgement of the court a quo.

Bharsila Liquor Store CC (the respondent) is represented by Mr Koevetjie and he is the 100%owner of the enterprise. The first appellant is the son to the second appellant. The second appellant is the 100% owner of Desmond Hoosier Cafe and he had previous business dealings with the respondent and such business dealing persisted even after the respondent experienced the problems which gave rise to the matter before court.

The first appellant did not have business of his own nor have any assets registered in his name. He was staying with his father (the second appellant) at his father's house even after he was married.

The pertinent facts of this matter are that at the beginning of 2006 the respondent was approached by the first appellant about the business of selling cigarettes. He wanted him to get cigarettes for him at a low price. According to the respondent he did that and he got cigarettes at a low price for him and he would sell to him at a mark-up of fifty cent per carton.

Before he could finalise the deal with the first appellant he phoned his father the second appellant and told him the proposal of his son and ask if he could continue to sell him the cigarettes, the second appellant said "yes". The cigarettes were sold to the first appellant. They were delivered to him and at

some stage he would come and collect direct from where the respondent was buying at Expo Liquor Wholesalers.

Deliveries were taking place and payments were made by the first appellant to the respondent and at some stage payments were made to the bond account of the mother of the respondent. Evidence was that the appellants could not buy direct from Expo Liquor Wholesalers as it was the policy of Expo Liquor Wholesalers to sell only to liquor licence holders and the respondent was the liquor licence holder.

The problem started when the respondent did not receive payment of the invoice marked annexure A and annexure B and the respondent would phone the first respondent to demand the payment but he did not answer nor return his calls . He said that his phone was always off until he phoned the second appellant, the second appellant told him that if seemed there was a problem and will come back to him but did not do so.

He testify that he phoned the second appellant several time asking him where the first appellant was and told him why he was looking for him.He said the second appellant continue to come to his business for other things and he continued to ask him about the settlement in the cigarettes account and also asked him about the first appellant.

The evidence of the second appellant was to the effect that he knew about the dealings between the first appellant and the respondent but he was not a party to that arrangement. He said he did not have any agreement whatsoever with the respondent. He did not make any undertaking to pay for and on behalf of the first appellant the debts owed to the respondent. The first appellant did not testify in court.

The issue raised in this appeal is whether the court a quo erred in finding that the second appellant assumed the liability of a co-principal debtor for payment of the indebtedness of the first appellant to the respondent. The court aquo when addressing this issue was guided by the demeanour of the second appellant when he answered questions during cross examination.

What also influenced the decision of the court a quo was the contradictions in the evidence of the second appellant the fact that at first he denied that the first appellant received the cigarettes and later admitted that he received the disputed cigarettes and also about his previous conduct in similar cases such as the matter of the New Heights (Pty) Ltd v Hanif Hoosein where he was sued for goods sold and delivered to him he paid R150000.00 in settlement of the claim but falsely testified that he never saw the goods. I don't think that the contradictions in his testimony and his previous dealings can be used as a proof of the existence of a contract or agreement of a co-principal debtor between the respondent and the second appellant for the debt of the first appellant.

In his evidence the respondent said that the first appellant approached him for cigarettes on a lesser price and he thereafter phoned the second appellant about his son's proposal and asked him whether he could supply him with cigarettes and he said " yes ". At no stage was the second appellant involved with the collection of cigarettes nor was there any cigarettes delivered to him.

It was also the evidence of the respondent that he entered into agreement with both the appellants that he would supply them with a large quantity of cigarettes. During cross examination he said he did not get payment from the first appellant and he tried to phone him but his phone was off. He said he tried him several time in his cell phone but he could not get him and he did not return his calls. He then phoned the second appellant. When asked whether he phoned the second appellant twice he said in his answer " it was not on two occasion but I continue phoning him asking him where the first defendant was and I also told him why I was looking for him, that it was in respect of the payment". It was only during re -examination that the respondent said that the second appellant promised to pay him the money owed to him.

In my view if there was any form of agreement between the respondent and the second appellant it was not necessary for the respondent to keep on phoning the first appellant who was neither answering his calls nor returning his calls, and whose cell phone was constantly off. The second appellant was always available and he use to visit the respondent business for other business deals and he was also answering the calls of the respondent. The second appellant as a co-principal debtor he would have been told to pay the debts .It is also strange why he phoned the second appellant and told him that he was looking for the first respondent and he told him the reason why he was looking for him if he was the other party to the agreement and he was ever available.

Though there is an apparent contradiction in the evidence of the second appellant but that does not prove the existence of a contract between the second appellant and the respondent. It cannot be said that there was a meeting of minds between the respondent and the second appellant on any agreement or contract when he phoned the second appellant about his discussion with the first appellant. Their conduct towards each other after that call did not indicate that they had concluded that alleged agreement. The Appeal Court in SAR&H V National Bank of SA Ltd 1924 AD 704 Wessel JA held at 715 "The law does not concern itself with the working of the minds of parties to the contract, but with the external manifestation of their minds. Even therefore if from a philosophical standpoint the minds of the parties do not meet, yet, if by their acts their minds seem to have met, the law will, where fraud is not alleged, look to their act and assumed that their mind did meet and that they contracted in accordance with what the parties purport to accept as a record of their agreement."

This is the only practical way in which the Courts of law can determine the terms of the contract. The conduct of the respondent as mentioned above did not suggest that there was an agreement between the parties.

In paragraph 4.3 of the respondent pleadings it is stated that the second defendant orally confirmed the agreement between the plaintiff and the defendants. In paragraph 5.1 of the pleadings it is said it was an explicit alternatively, implied alternatively tacit term of the agreement. The dictionary meaning of the term explicit means expressly stated leaving nothing merely implied; stated in details .There is no evidence which suggested any express or detailed terms of the agreement. To say " yes " cannot be said to be a statement stated in expressed terms or a statement detailing any terms of a contract.

In Lambons (Edms) Bpk v BMW (Suid-Afrika) (Edms) Bpk 1997(4) SA 141 (SCA) the appellant represented by B had indicated to the respondent represented by W, that it wished to become a dealer in BMW vehicle in Bloemfontein. W had met B inspected the premises of the appellant and indicated that the respondent would be interested in appointing the appellant as a dealer and suggested some alterations to the premises of the appellant which would be desirable in the event the appellant become such dealer. B and W spoke broadly about the proposed relationship but they did not discuss the terms of any contract in detail. W telephoned B and repeated that the respondent was interested in appointing the appellant as a dealer and later congratulated him for his appointment as such.

No written contract was concluded and the appellant in a claim for damages for repudiation of contract alleged that a contract was concluded telephonically when W informed B that the appellant had been appointed as a dealer and B had accepted that offer. The court a quo granted absolution from the instance finding that no contract has been proved to exist as there was no agreement on the essential terms. In an appeal the court upheld the finding of the court a quo and held that even though the parties intended to conclude the contract it was not clear that the contract had been entered into since there had been no discussion of certain essential provision. The court found that it was unlikely that the respondent would have intended to enter into a contract by means of a short telephone conversation. B's evidence regarding his intention had also to be considered in the light of all his evidence which indicated that he had not intended to conclude a final binding contract during the telephone conversation.

In this appeal before us there is no evidence which described the detailed terms of the agreement between the second appellant and the respondent except the allegation that he said "Yes". I therefore differ with the finding of the court a quo that the second appellant gave the respondent an undertaking that he will pay for the goods sold and delivered to the first appellant and has assumed the liability of a co-principal debtor.

In the result I therefore propose the following order:

1. The appeal by the second appellant is upheld with costs and Order of Court a quo is substituted with the following: Plaintiff's claim against second defendant is dismissed with costs.

2. The appeal by the first appellant is dismissed with costs.

JUDGE NS MASANGO

ACTING JUDGE OF THE HIGH COURT

I AGREE

JUDGE N F KGOMO

JUDGE OF THE HIGH COURT

JUDGE H J FABRICIUS