Matzo Enterprises (Pvt) Ltd v St. Alberts High School

### Preamble
HH 257-2012
HC 5298/10
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MATZO ENTERPRISES (PVT) LTD

versus

ST. ALBERTS HIGH SCHOOL

HIGH COURT OF ZIMBABWE

MAVANGIRA J

HARARE, 6 and 28 July and 5 August 2011 and 20 June 2012

Civil Trial

Kamusasa for the plaintiff

Kwaramba for the defendant

MAVANGIRA J:  The plaintiff’s claim is for payment of US$7456 being the outstanding balance for payment for goods sold and delivered to the defendant at the defendant’s request and US$720 being travelling and subsistence costs incurred by the plaintiff. In its declaration the plaintiff averred that sometime in December 2009 it entered into a contract with the defendant for the supply of 797 printed sports shorts at an agreed price of US$3 per item; 722 printed “T” shirts at US$7 per item and printed “O” and “A” level report books for a total cost of US$4 700. The total cost for all items was thus US$12 145. It also averred that it was a term of the contract that full payment would be made to the plaintiff upon delivery of the said items to the defendant

The plaintiff further averred that it duly printed and supplied all the items to the defendant. Furthermore, that despite demand, the defendant has failed or neglected to pay the full amount owing to the plaintiff as it only paid US$4 698 thereby leaving an outstanding balance of US$7 456. The plaintiff also averred that it incurred a total of US$720 in transport and subsistence costs as its Managing Director had to travel to and from the defendant school on eight occasions to follow up on payment.

In its plea the defendant averred that the arrangement between the parties was in fact “a combination of sample sale and agency contract.” The prices were therefore not definite but dependent upon the quality of the item supplied tallying with the sample. It averred that it was to market and sell the items on behalf of the plaintiff. Payment would then be remitted to the plaintiff once the items were purchased. However, the plaintiff supplied items that were of a cheaper quality and that were different from the samples that were earlier provided. The intended customers refused to buy the poor quality items except for a few report books that were purchased and the monies received for these were remitted to the plaintiff.

The defendant further avers that at a subsequent PTA (Parent Teacher Association) meeting the plaintiff’s representative agreed with the chairperson that he would collect his items. The defendant denies that there was ever an agreement to make a one-off payment as alleged. The defendant denied that eight visits were made as alleged, averring that only two visits were made by the plaintiff’s representative, one being for the collection of some of the cash due to it and the second being to attend the PTA meeting. The defendant denies liability for the travel and subsistence costs firstly for want of agreement about the same and secondly for want of merit and legality.

The joint pre-trial conference minute reflects that three issues were referred for the determination of the trial court. The first is whether or not the parties entered into a contract of sale or agency. The second is whether or not the defendant breached the terms of the said contract. The third is whether or not the defendant should be ordered to pay the amounts claimed by the plaintiff together with interest and costs of suit.

One Barnabas Nyathi gave evidence for the plaintiff. He said that he is a director of the plaintiff company. He said that on 9 December 2009, the plaintiff and the defendant entered into a contract in terms of which the plaintiff was to supply 744 pairs of shorts; 780 golf T-shirts; 500 A5 size school report books for Forms 1 to 4 and 120 A4 size report books for “A” level. The agreement was that the witness would be paid by the defendant for the items on delivery of the same. Before making deliveries the witness brought samples of the items to the school. He then made the first delivery on 11 February 2010. This delivery was urgently needed as the school had to attend a sports gala in Macheke the following day. Due to shortage of fabric the plaintiff could not deliver all the items. The witness said that he did not receive payment upon delivery as had been agreed. Rather he was told to come back a week later after the opening of schools as the students had not yet paid their fees.He agreed to come back later and was to then also deliver the remainder of the ordered T-shirts. The headmaster was happy with the quality of the first delivery. The witness said that the next delivery that he made was one of 129 instead of 186 T-shirts because he was frustrated by the non payment for the first delivery. He said that the defendant then made a payment of US$741 which he reluctantly accepted. This was on 25 February 2010. The headmaster apologised for this and asked the witness to come back after a week

The witness further testified that the initial price for golf T-shirts was US$15 and for boxer shorts US$13. The defendant’s headmaster requested a reduction of the prices to US$7 and US$3 for golf T-shirts and boxer shorts respectively. The witness said that he agreed to this because the headmaster promised him that if the prices would be so reduced payment would be made immediately. He agreed to this even though it meant that he would forgo profits as he was now concerned about repaying the loan that he had taken and which was accruing interest. He said that the negotiations for the reduction of the prices were between him and the defendant’s purchases committee.

The headmaster later advised the witness that the money for his payment was in the custody of the priest. On being approached by the witness the priest declined to release the money claiming that the whole arrangement had been made behind his back. On the following day, 13 May 2010, the headmaster paid him US$379. The headmaster asked him to come back later for the payment of the balance. Subsequent to the payment of 13 May the defendant made two more payments, one for US$2 400 and another for US$1 500. The witness said that he asked the headmaster if remembered what he had previously said about payment. In reply the headmaster told the witness to bear in mind that some of the pupils at the school were children of CIO operatives MPs and that he should therefore stop pestering the defendant about his payment. The witness said that he then decided not to continue making follow ups on payment but to take the legal route and institute proceedings because he saw the headmaster’s response as a form of intimidation. Hence his claim before this Court for the unpaid balance of US$7 456 and US$720 for travelling and subsistence costs.

No other witness testified on behalf of the plaintiff.

Levi Goredema testified for the defendant. He was the headmaster of St. Alberts High School during the period from 2006 up to October 2010. He testified to the following effect. Sometime at the end of 2009, Barnabas Nyathi, the plaintiff’s witness came to visit a relative at the school. The day after his arrival he came to the witness’ office with samples of some cloth that he said he would import from South Africa for the manufacture of T-shirts. He explained to Nyathi that a company called Royal Manufacturers had been supplying the school with T-shirts and report books which they would bring to the school and the school would sell the sporting and athletics uniforms on behalf of the said company. The school would not make any profit from this arrangement the only benefit to it being that they would have one shade from one supplier. He said that in terms of the agreement that was reached between the plaintiff and the defendant their relationship was supposed to be that of agent and principal with the defendant selling the sportswear to the students on behalf of the plaintiff and that he made it very clear to Mr Nyathi that the defendant would only act as an agent between the plaintiff and the students. He further advised Mr.Nyathi that the defendant does not buy sportswear as it is the responsibility of the parents to do so; the defendant only purchasing uniforms for soccer, netball and other sporting teams at the school

At Nyathi’s request the witness wrote out exhibits 1 and 2 which are orders for 780 golf T-shirts and 744 boxer shorts on the one hand and for 500 ZJC and “O” level report books and 120 “A” level report books on the other. This was on 9 February 2009. When Mr Nyathi asked how many students would need the sportswear the witness took an enrolment paper from the notice board in his office and wrote down on bond paper the numbers of male and female students in each Form from Form 1 to Form 6. He date stamped the bond paper. He only completed these particular exhibits after Mr Nyathi had indicated that the bond paper did not appear official enough for him to convince his colleagues that they should make the supplies. He said that exhibits 1 and 2 were only meant to authenticate the agreement that they had reached as he at that time had no other paper with letterheads. The order forms were only meant to give the number of uniforms that should be supplied.  This witness said that the crux of the dispute now before this court is centred on the poor quality of the plaintiff’s products. At one stage he advised Mr Nyathi to come and collect his goods as they were not being bought. Mr Nyathi’s response was that the sportswear be issued to the students for them to pay later but the witness refused the suggested arrangement and advised him that the pupil’s parents were well aware of their rights.

Mr Nyathi made a delivery after a very long time in February 2010. The delivery was made a day before the school went to the Catholic Schools Sports Association  Athletics competitions at Mt. St. Mary’s in Wedza. The quality of the delivered sportswear was different from the sample material that had been shown by Mr Nyathi. However, as some students had made prior payments for the items and as they had no other uniforms to wear they had no option but to take them. When the students washed the sportswear the following weekend the letters on the backs of the T-shirts  bloated. As a result many parents contacted the Provincial and District Education Offices in Bindura and Centenary respectively complaining that their children were being made to buy very poor material at exorbitant prices. This led to Mr Nyathi coming back to the school to renegotiate the price for the sportswear. The witness was summoned to the District Education officer as it was suspected that he had entered into a deal with a relative.

The witness said that Mr Nyathi later brought in another consignment whose quality was good and it sold very well. Mr Nyathi came to the school on three occasions to collect money. On the first two occasions he came alone. On each occasion he would take a receipt book and together with the bursar they would check on those who had paid and he would collect the money. When he came on the third occasion he was with two other gentlemen from his company.The sportswear was no longer selling as the students had by then stopped buying the sportswear.  They collected the little money that was there. He said that on each occasion Mr Nyathi took stock of material that had been sold. Afterwards the bursar made a report to him about utterances made by Mr Nyathi to her.

One Chipo Mwasanga also testified on behalf of the defendant. She said that she was employed by the defendant as a school secretary but was later elevated to the post of school bursar. She said that she came to know about the plaintiff when Mr Nyathi came to the school to collect payment for sportswear that his company had supplied to the school. She also said that she is the author of exhibits 3 and 5, these being documents that they used to take stock of what would have been bought by the students and to calculate the amount of money thereby due to the plaintiff, which sum she would then hand over to Mr Nyathi. On each document she would record the receipt number for the last transaction relating to sale of sportswear which would also be the last receipt number for monies handed over to Mr Nyathi. This would enable them, on Mr Nyathi’s next visit, to check from the next receipt number and calculate how much money would be due for payment to the plaintiff for sportswear since sold to the students.

It was the witness’ evidence that on the third and last occasion when Mr Nyathi came to collect money in the company of two other gentlemen, he initially left the two gentlemen outside her office. He then entered the office and whispered to her that she should not disclose to his colleagues that he had earlier collected some payments. She went and told the headmaster, Mr Goredema, what Mr Nyathi had said to her. She then went through the book that she had used to collect money from the students after which she gave the book to the three gentlemen. They also went through the book in the manner that she used to do with Mr Nyathi. After they all agreed as to the amount due to the plaintiff she handed the amount over to them. It was a small amount as the students were resisting buying sportswear from the last batch that was supplied by Mr Nyathi which was of a different quality to that supplied before. Furthermore, the headmaster had been called to the District Education Office in relation to the quality of the sportswear which was said to be unsuitable for sport. Only the report books were of good quality and most of the money was from the sales of these. That was the last time that she saw the plaintiff.

The witness said that the only benefit that the defendant got from the arrangement was that the sportswear would be of the same shade as it would be from the same supplier. She also said that the first batch of sportswear that was supplied was of a different quality from the sample but the students who had paid in advance had no choice but to take them as they also had to attend a Catholic School Tournament the following day. She said that the second batch that was supplied was of a good quality. The last batch was of a poor quality and there was serious resistance from the students. The witness further confirmed that before the plaintiff was engaged by the defendant there was an agreement between the defendant and a company called Royal Manufacturers. The said company would bring sportswear to the school and the school would sell it on behalf of the company. The said company would be paid the amount that would have been collected from the students.

It was also the witness’ evidence that during the period that the defendant was now dealing with the plaintiff, she would use the receipt books for St. Albert’s High School. Sometimes students would pay school fees together with money for sportswear. On the far right hand side where the total is written she would then break the amounts down showing the respective amounts for T-shirts, boxer shorts, report book and tuition fee. She said that the defendant is still in possession of some T-shirts, boxer shorts and a few report books. She does not know the quantities nor what is to happen to these items.

John Nhengu was the next witness. He said that he is a member of the defendant’s purchasing committee. The defendant supplied sportswear to the school and as the purchasing committee they were asked by the headmaster to negotiate for the reduction of the price thereof as the sportswear supplied was of low quality. He said that exhibit 4 is the document on which is recorded the agreement reached between the procurement committee and the plaintiff’s representative in the revision of prices downwards. It was drafted by the headmaster after they had reported back to him on the agreement reached. He said that the committee was acting on behalf of the students and that prior to the exercise for the reduction of the prices he had not been involved with the plaintiff in any way. He had neither been involved in the negotiations that led to the conclusion of the initial contract. He was thus unable to comment on exhibits 1 and 2. However, he was one of the signatories to exhibit 4. He was asked whether as the purchasing committee they would generally make purchases using orders like exhibits 1 and 2. His answer was that they did not use the order books to purchase goods for the school. Rather, they would consider quotations from different companies and the headmaster would issue the order after the committee’s recommendations. In casu he only got involved personally on the day of the negotiations with the plaintiff which resulted in the agreement recorded in exhibit 4. He was not aware if the committee may have been engaged or involved in the dealings with the plaintiff at an earlier stage as he was not present.

Nhengu stated that during the negotiations that led to the agreement recorded in exhibit 4 they clearly explained to Mr Nyathi that the school would be selling the sportswear to the students, on behalf of the plaintiff as the school’s policy was that students buy sportswear using their own money. He conceded that exhibit 4 did not reflect the agreed terms of payment nor did it state that the school would be selling to the students on behalf of the plaintiff. He said that the unrecorded terms or agreement on this aspect was however confirmed by the fact that to his understanding, thereafter Mr Nyathi came to the school regularly. He would then do a stock take on the plaintiff’s products together with the bursar; they would ascertain what had been sold and the money ascertained to be due would then be paid to Mr Nyathi. The defendant’s case was closed after this witness’ evidence.

All the witnesses, whether for the plaintiff or for the defendant were unshaken under cross examination. Each maintained their stance or version of events. No adverse findings relating to the credibility of each of them could be made on the basis of their demeanour before the court. It is on the probabilities that this matter, it would appear, may be determined.  In Nicols v Pearl General Ins Co & Anor 1994 (1) ZLR 193 at 195 C-G BARTLETT J stated:

“I would refer to the approach laid down in National Employers’ General Insurance (Pvt) Ltd v Jagers 1984 (4) SA 437 at 440 – 441 where EKSTEEN AJP, stated:

‘It seems to me, with some respect, that in any civil case, as in any criminal case, the onus can ordinarily only be discharged by adducing credible evidence to support the case of the party on whom the onus rests. In a civil case the onus is obviously not as heavy as it is in a criminal case, but, nevertheless, where the onus rests on the plaintiff as in the present case, and there are two mutually destructive stories, he can only succeed if he satisfies the Court on a preponderance of probabilities that his version is true and accurate and therefore acceptable, and that the other version advanced by the defendant is therefore false or mistaken and falls to be rejected. In deciding whether that evidence is true or not the Court will weigh up and test the plaintiff’s allegations against the general probabilities. The estimate of the credibility of a witness will therefore be inextricably bound up with a consideration of the probabilities of the case and, if the balance of the probabilities favours the plaintiff, then the Court will accept his version as being probably true. If however the probabilities are evenly balanced in the sense that they do not favour the plaintiff’s case any more than they do the defendant’s, the plaintiff can only succeed  if the Court nevertheless believes him and is satisfied that his evidence is true and that the defendant’s version is false.”

The resolution of this dispute, as I see it, revolves around one undisputed fact which is substantiated by exhibits 3 and 5. While the two versions may be viewed as mutually exclusive of each other, there is the undisputed fact that the plaintiff’s representative, Mr. Nyathi, would conduct a stock taking exercise together with the bursar in order to ascertain how many items had been sold and therefore how much was due for payment to the plaintiff at any of the times when he came to the school to collect payment. On both exhibits the last receipt number was recorded such that the next time that Mr Nyathi came, they would start from the next or following receipt number as they conducted a further stock taking exercise for the very same purpose. In my view, it would not be necessary to conduct such an exercise in the case of a sale agreement and one where there was to be a once off payment. On the other hand it makes clear sense for such an exercise to be done in the case of a principal and agent relationship.

In addition to the above, Mr Nyathi’s whispered communication to the bursar not to inform his companions that he had collected monies in the past, which communication the bursar immediately reported to the headmaster and which this court has found no reason to disbelieve, is an indicator that in my view, tilts the balance against the acceptance of the plaintiff’s version. This kind of conduct tends to lend credence to the defendants’ legal practitioner’s submission that Mr Nyathi could have misrepresented the nature of the agreement to his colleagues thus leading to the plaintiff instituting this action.

There is another aspect that tends to lend credence to the defendant’s version while discrediting that of the plaintiff. The headmaster’s explanation as to why exhibits 1 and 2 are on paper bearing the school’s letterhead was that this paper was used because Mr. Nyathi had asked for an official looking document and not the plain bond paper that the headmaster had initially written on. Mr Nyathi’s denial of this assertion is negated by the fact that he thereafter accepted the findings of the stock taking exercises as well as the payments made to him to be recorded on plain bond paper in exhibits 3 and 5.

For the above reasons it is my view that the plaintiff has failed to establish its case and that its claim must therefore be dismissed. Costs will follow the cause. In the result the plaintiff’s claim is dismissed with costs.

Kamusasa & Musendo, plaintiff’s legal practitioners

Kajokoto & Company, defendants’ legal practitioners