Naidoo v Mazi &Export Company Limited & Another (Civil Cause 706 of 1988) [1987] MWHC 12 (25 May 1987)

Banh Zs IN THE HIGH COURT OF MALAWI PRINCIPAL REGISTRY CIVIL CAUSE NO.706 OF 1985 BETWEEN: C. NAIDOO........ pen owe ceee ser eeeee eee aes ..... PLAINTIFF - and = MAZI_IMPORT & EXPORT CO. LIMITED....... occceees 1ST DEFENDANT - and - A. M. G. TCHONGWE.......0.ccccccccscceeeccctccees .2ND_ DEFENDANT Coram: § MBALAME, J. Saidi of counsel for the plaintiff Ng'ombe of counsel for the lst and 2nd defendants Mkumbira, Court Clerk Longwe, Court Reporter JUDGMENT There are two plaintiffs and two defendants in this case. The first plaintiff, C. Naidoo, is a businessman from the Republic of South Africa and the second is his own company, a company of limited liability, again, regis- tered and having its offices in that Republic. On the other side of the case is the first defendant, a limited company registered and having its offices in the Republic of Malawi and owned by the second defendant who is a Malawian. By their writ, specially endorsed, of 9th September, 1985 the plaintiffs claim from the defendants the sum of R60,336.00 plus interest at 25% per annum being the price of goods sold and delivered and other expenses incur- red by the plaintiffs on behalf of the defendants. These have been particularised but I do not seek to list them at this stage of my judgment as I will do so later on. The defendants in their defence deny ever owing the plaintiff the amount as claimed and pray that the action be dismissed with costs. Although there are four parties to the duel only two were present to battle it out in court, naturally the other two were physically excluded from court because of their status, being limited companies. They were how- ever ably represented. The first plaintiff, C. Naidoo, gave evidence. _He said he was a businessman at Chatsworth, Durban, in the Republic of South Africa. He is a director of a company called Allparts (Pty) Ltd., dealing in motor spare parts. He also deals in imports and exports and had dealings with both defendants. He went on to say that sometime in September 1983 he learned of the second defendant, through the Durban Chamber of Commerce Newsletter, as a Malawian businessman in Durban seeking to do business with South Africans. He went to meet him and his wife at Lonsdale Hotel in Durban where the second defendant showed him orders for tinned fish from the Malawi Army. He was also shown papers concerning previous dealings between the second defendant and the said Army in which payment had been made within 7 days and was informed that if he supplied the tinned fish through the second defendant's company, Mazi Import & Export Co. Ltd., payment would in each case be effected within 14 days of delivery : of the fish in Malawi. Impressed by the order and the expediency with which he would get his money, the first plaintiff through his company, Allparts, purchased the first consignment of 700 cartons of tinned fish from Raphaely & Company. He said that because the fish was bonded, having been imported to South Africa from Japan, it was arranged that Raphaely Limited should export directly to Malawi in the name of Mazi Import & Export on behalf of Allparts. He produced in evidence Exh. Pl, a Bill of Entry for export of imported goods showing that the 700 cartons of fish came from Japan and were re-exported to Mazi Import & Export in Malawi by Raphaely Limited. These facts were also reflected on Exh. P2, a declaration in regard to foreign exchange proceeds of exports. Perhaps I should also mention that on that form there is provision for the “name and address of person or firm from whom payment has been or will be received if different from consignee", and Allparts was put as such. There is then, again, on that form an F. O. B. price: R18,634.00 which he said was the cost ex-Japan. The amount Allparts was charging Mazi is reflected on Exh. P6 he said. Exh. P3 was an invoice from Raphaely to Mazi in respect of 300 cartons of tinned fish at R33.10 per carton which were paid for cash against documents. Explaining this he said in his negotiations with Raphaely it was agreed that he would pay cash for 300 cartons and was to get the other 400 on credit payable in 90 days. It was therefore necessary to split the invoices, the next one being Exh. P4 for 400 cartons at R34.60 per carton. He said the price was higher because he was buying these on credit terms. These transactions were reflected on Exh. P5, the certificate of origin. To regularise the deal Allparts Limited then, by invoice No. 3972, invoicéd Mazi Import on the same day 27th September, 1983 for the 700 cartons at R70.00 per carton which came to R49,000.00. This is the amount being claimed in respect of fish sold to the first defendant. Allparts also claims interest at 25% thereon. The witness was subjected to a very vigorous cross-examination by Mr. Ng'tombe but he stood to his story and I had the impression that he was a calm and truthful witness. Asked why the first defendant should buy the fish from Allparts Limited at R70.00 per carton instead of buying the same at R34.60 from Raphaely Limited, the witness explained that the defendant had neither money to buy the fish cash nor did it have credit facilities with Raphaely Limited, while the second plaintiff had both. The first defendant's story regarding this deal was narrated by the second defendant. He told this court that the first defendant had no fish dealings with the second plaintiff as the deal was strictly between the first defendant and Raphaely Limited. This, he said, was evidenced by the various documents - exhibits Pl to P4. Regarding the entry on Exh. P2 in respect of the firm from which payment had been or would be received if different from consignee, the witness said that Allparts was only put there by way of guarantee in case the first defendant failed to pay Raphaely Limited. Having paid Raphaely Limited in full the second plaintiff's obligation was no longer there, he concluded. This is a civil case and in considering the evidence before me I am, throughout, mindful of the requisite standard of proof in such cases. Each party only has to prove their case on the balance of probabilities in order to succeed. I now have to make my findings on the evidence before me. It was PWl's evidence that although the documents relating to the sale of the fish are in the name of Raphaely Limited and Mazi Import & Export Limited, the actual deal was between Allparts and Mazi for reasons already stated above. He further exhibited Exh. P21, a letter from Radfur International CC dated 4th February 1986 which company was known as Raphaely International Holdings (Pty) Ltd., the company I have referred to as Raphaely Limited in this judgment, which certifies that that company did sell 700 cartons of tinned fish to Allparts Limited for resale to Mazi Import & Export Co. Ltd., while still trading under the former name. In my judgment exhibit P2 is also crucial in that it shows that the second plaintiff was to pay if Mazi did not. Mazi says it paid for the goods. Regrettably no other receipts have been exhibited to prove this. Mazi relies on Exhs.1, 2, 3, 4 and 5 only. Further, if it can be argued that payment was effected from Malawi then surely there should have been some foreign exchange supporting documents to support that contention. These are nowhere to be seen. There is then Exh. P18, a telex AP aa es from the second defendant to the first plaintiff dated 27th July, 1984 and paragraph 1 of which reads as follows:- "All the matters now are through and are just waiting for a letter from Reserve Bank to the National Bank so that money can be sent to R. S. A." The plaintiff says this telex was as a result of the many telephone calls he made to the defendant requesting him to send him the R49,000.00, while the defendant says the money referred to there was his share capital in Chrale International (Proprietary) Ltd. With respect the share capital in that company was only R1.00. How could he be seeking Reserve Bank approval to transfer R1.00? I hold that he meant the R49,000.00. In my judgment the second plaintiff's story is not only more probable but is also supported by the various exhibits. I therefore find as a fact that Allparts Limited bought the fish in question from Raphaely Limited and resold it to Mazi Import & Export Co. Ltd. at R70.00 per carton and that the latter company has not as yet paid the second plaintiff the sum of R49,000.00 being the purchase price. I consequently enter judgment for the second plaintiff against the first defendant in that amount. I now turn to the claim in respect of TV set/video recorder. The second plaintiff is claiming a sum of K2,500.00 on this head. It was first plaintiff's evidence that sometime in February 1984 while the second defendant was again in Durban he was asked to purchase a video cassette for him. He contacted Suratel Electronics Industries (Pty) Ltd. who supplied the set to second defendant directly. He said this he acknowledged by telephone to him and that he eventually got a delivery note from the selling company, Exh. P8, in the sum of R2,500.00. He then raised invoice No.13284 dated 13.2.84, Exh. D1, in the sum of R800.00. He said he put that amount on the invoice to assist the defendant pay less duty in Malawi. Giving evidence on this claim the second defendant denied ever seeing exhibit P8 or buying the said set at R2,500.00. He said he bought one from Allparts Limited at R800.00 and paid cash for it. It may very well be that the cost of the TV/video recorder might have been R2,500.00 but there is no reason why it could not be R800.00. It is not the sufficiency of the consideration that this must look for; it is the presence of one. Further, I observe that Exh. P8 is in the name of "Mr. Alex" c/o Royal Hotel. It is not in the name of either defendants. Again, much as may be expected that the parties deliberately undervalued the price to deceive the customs authorities in this country I must nevertheless be guided by the evidence before me. Sf aa ws I find as a fact that the price of the set was R800.90 and that the first defendant has since not paid the second plaintiff for the set. I, in the end result, enter judgment for the second plaintiff. It is further the second plaintiff's claim that an amount of R1,246.00 was expended on behalf of second defendant for his and his wife's air ticket fares to Malawi ‘in October 1983. It was the evidence of the first plaintiff that the defendant and his wife went to Durban on an excursion ticket and since they overstayed and could not return to Malawi within the prescribed period their tickets ceased to be excursion and they, therefore, had to pay more money to travel. It turned out, in the course of the trial, that the additional sum was R328.00 and this is the sum now being claimed. To support this the witness exhibited Exh. P7, an invoice, from Thomas Cook Rennies Travel (Pty) Limited to Allparts (Pty) Limited showing two additional amounts of R164.00 making it a total sum of R328.00. Further a statement dated 31/10/83, again from the same travel agents to Allparts, clearly shows that the sum was in respect of Mr. and Mrs. Tchongwe, i.e. the second defendant and his wife. The second defendant in his evidence simply said he knew nothing about this as he had his own ticket back to Malawi. With respect, he gave me the impression of a man who was left totally defenceless. On the facts before me I am satisfied that Allparts actually expended the sum of R328.00 to augument the price of the air tickets at the request of the second defendant and that the second defendant has since failed to repay that amount. I therefore enter judgment for the second plaintiff. The next leg of the claim is for a sum of R5,000.00 being cash advanced by the first plaintiff to the second defendant. It was the first plaintiff's evidence that during the times the second defendant was in Durban he was always short of cash. They had meanwhile created a very good and close relationship between themselves to the extent that the second defendant lived in the first plaintiff's house. There was mutual trust between them, he said. He said that whenever the defendant wanted money they could go to the plaintiff's service station where they drew money for the defendant to use and which was returnable to the plaintiff. He said this amount in all came to about R5,000.00 and nothing was reduced to writing. Again the defendant's version is a straight denial of the claim. I must say that this claim has given me anxious moments and this has been principally due to lack of docu- mentary evidence. As the plaintiff said the amounts were advanced on open trust and he hoped that his friend would equally repay him. TI am satisfied that some money was advanced by the first plaintiff to the second defendant Gf wees but that the certain amount cannot be determined. I cannot come up with an arbitrary figure nor can I award the claim -of R5,000.00 as the plaintiff is not certain as to the exact figure. There is then the claim of R160.00 in respect of a portrait of Mr. & Mrs. Tchongwe from Crown Studios. Exhibit P16 is a clear cash receipt dated 12/10/83. It is in the name of Mr. Tchongwe and it is thereon indicated "paid in full R160.00 by cheque by Allparts (Pty) Limited". Regarding this the second defendant said he knew nothing about any portrait for him and his wife. On the evidence before me I disbelieve him. I find as a fact that the portrait was taken and that Allparts paid for it by a cheque in the amount of R160.00 and that the second defendant has since failed to pay back this amount. I enter judgment for the second plaintiff in that aiount. There is then a claim of R200.00 with which the first plaintiff says he opened a bank account for the second defendant with the Standard Bank of South Africa in Chartsworth, Durban. He has tendered exhibit P17 which is a bank statement and some used cheques signed by the defendant. The defendant contends that this was his own personal account having been opened by him although he used the plaintiff's address. What the plaintiff said ‘May very well be true. However, there is nothing to show , that it was actually him who opened the account with an initial deposit. This claim cannot therefore succeed. Regarding the amount of R50.00 allegedly in respect of business cards which the first plaintiff had printed at Novelty Print for the second defendant, he told this court that he could not prove this other than by his word of mouth. He had no receipt. Again, I see no merit in this claim and I disallow it. There is then a further claim of R500.00 in respect of monies expended by the first plaintiff in the formation of a company called Chrale International (Pty) Limited, whose directors were the first plaintiff and the second defendant. Each one of them held one share and they were the sole directors. The defendant does not deny the exis- tence of the company. As a matter of fact the share certi- ficate is Exh. P13 and the minutes of the first meeting of the shareholders is Exh. P12. I find as a fact that the two parties formed the company Chrale International (Proprietary) Limited. The first three letters of "CHRALE" are abbreviations of Chris Naidoo's first name while the second three are those of Alexander Tchongwe. The defendant was supposed to pay for part of the share capital and naturally the expenses incurred in the formation of the company. Since the parties held equal shares it is only fair to infer that they intended to share the pre- incorporation expenses equally as well. I therefore find, Uf sia ee on the evidence before me, that they intended to contribute R250.00 each towards these expenses. The plaintiff's claim on this head therefore succeeds to that extent. Having held that the two parties formed a limited company, Chrale International (Pty) Limited, I now have to consider the claims in respect of shoes bought in the name of that company and the hotel bills incurred by the first plaintiff during his stay at Mount Soche Hotel here in Malawi. With respect, these cannot be claimed against any of the defendants as the company Chrale International (Pty) Limited is and has a totally different personality. These claims are disallowed. I finally turn to the question of interest. The plain- tiff claims interest from the defendants at 25%; an alarming percentage I must observe. The pleading is general and is as follows: "The plaintiff therefore claims the said sum of R60,336.00 plus interest at 25% per annum plus costs of this action". This type of pleading is, in my judgment, not precise. Pleadings must be specific. It is not right for the courts and indeed not open to these courts to infer or construe pleadings for parties to an action. In the case of A. G. Kassam t/a Globe Wholesalers vs. Lusitania Ltd., Civil Cause No.55 of 1984 (unreported), I had occasion to review the law regarding the claiming of interest on overdue debts. It is probably of no harm to repeat it here. In that case I said that at common law as it stands in this country, interest on ordinary debts was not payable unless by agreement or mercantile usage. Indeed damages in the nature of interest are not given for non-payment of such debts. See London, Chatham & Dover Ry Co. vs. South Eastern Ry. Co.(1893) AC 249 at p.439 & 441. In the absence of an express stipulation, interest is not claimable on a demand for goods sold, although the price was to have been paid on a fixed date. Gordon vs. Swan (1810) 12 East 419. In the instant case the pleadings do not show whether it was expressly agreed by the parties. that interest would be charged on overdue accounts nor do they show that there is a particular mercantile usage being applied. The first plaintiff said this was verbally agreed upon with the second defendant and that such was in any event the practice in the Republic of South Africa. With respect, this alleged verbal agreement was not put to the second defendant. If it were to be what the witness said I should have expected it to be reflected on his invoice to the first defendant. Again there is no proof before me that in R. S. A. there is always interest charged on all overdue accounts. The claim for interest consequently fails. B/..-- Pronounced in open court this 25th day of May, at Blantyre. R. P. Mbalame JUDGE Adjourned to Chambers to be addressed on costs. R. P. Mbalame JUDGE 1987