NAMIBIA BEVERAGES and
MARTIN AMUPOLO

CILVIL PROCEDURE LAW OF CONTRACT

Civil procedure - Rules of court - particularity of allegations required - difference between simple summons and declaration

NAMIBIA BEVERAGES
Plaintiff

and

MARTIN AMUPOLO
Defendant

CORAM:     MARITZ, A.J.

Heard on:          1998-10-27 and 1998-10-28

Delivered on:       1999-08-13

JUDGEMENT

The credit agreement expressly provides that the terms thereof will apply to all dealings between the parties unless otherwise agreed to in writing (clause 1); that the defendant will pay in full for all goods purchased within 30 days of the date of the plaintiffs invoice (clause 2.1); that the prices of the goods will be those quoted at the time of the defendant's order (clause 3) and be subject to escalation.

defendant's counterclaim for payment of that amount.

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The real issue between the plaintiff and the defendant is therefore of a limited factual nature: What, if any, is the agreed credit which the plaintiff had to pass in favour of the defendant for the promotional products of the plaintiff sold by the defendant during the promotion?

As I have pointed out before, the defendant alleged that the credit entry that the plaintiff should have passed in his favour at the end of the promotion should have been equivalent to the difference between his actual retail price (N$2.50) and the retail promotion price (N$1.20) of each bottle purchased by him from the plaintiff. The plaintiff, on the other hand, alleged that such credit had to be equivalent to the difference between its recommended retail price (N$1.35) and the promotion price of each such bottle. The nett effect of the their differing claims is that, according to the plaintiff the credit it had to pass in favour of the defendant should have been 15 cent per bottle supplied to him during the promotion period, whereas, according to the defendant such credit should have been N$1.30 per bottle.

"...goods sold and delivered during 1996 by the plaintiff to the defendant at the latter's special instance and request...''.

1992 (2) SA 388 (C) at 395A), the paucity of such particulars would not necessarily meet the threshold requirements prescribed for the particulars to be alleged in a declaration.

The combined result of the casual, almost indifferent, treatment of the pleadings and the disputes in this action was that defendant did not plead to the terms of a written agreement; did not rely on the non-variation clause contained therein; did not apply for rectification of the promotion agreement; did not refer to the written agreement(s) in his claim in reconvention and was still uncertain, at the time his counsel presented final argument, whether the plaintiff was relying on a written agreement for its claim in convention and, if so, whether it was relying either on the credit agreement or on the promotion agreement or on both of them. Ultimately this displeasing state of affairs, deserving censure, has been left to the court to resolve.

The plaintiffs operations manager testified that the plaintiff occasionally approached retailers to run special promotions of its products for a limited period of time. In the course of such a promotion the plaintiffs products would be sold at a price lower than its recommended retail price. To encourage retailer participation in such promotions, the plaintiff absorbed the difference between its
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recommended retail price and the promotion price of such products. It does so by passing a credit in that amount against its ruling wholesale

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with the defendant, but also with a nujmber of other retailers in the same region. The defendant purchased soft drinks from the plaintiff in the course of the promotion and, in relation to such purchases, he was correctly invoiced and the agreed credits passed.

The defendant, on the other hand, testified that he was unaware of the plaintiffs recommended retail price of N$l,30 per bottle applicable prior to the promotion; was in any event not bound to such recommended price and sold soft drinks at N$2,50 per bottle to consumers. Such a high mark-up was not only generally applied by other retailers in his vicinity but was necessary to run his business on a profitable basis. When he was initially approached to participate in the promotion (during which he had to sell those products for N$l,20 per bottle) he declined, because participation would have meant slashing his profit from N$1.45 to 30 cent per bottle sold. The plaintiffs regional manager came to see him about his refusal and, according to him and the manager of his business, explained to him that he would not suffer any losses because the plaintiff would pay him the difference between his normal retail price (of N$2,50 per bottle) and the promotion price thereof (of N$l,20) at the end of the promotion period. Having received those assurances and expecting a higher turnover during the promotion period, he orally agreed to participate in the promotion although his profit per bottle sold would have been slightly reduced from N$1.45 to N$1.30 during that period. Had he known that he would only receive a credit of 15 cents per bottle instead of N$ 1,30, he would not been amenable to participate.
I have carefully listened to the evidence presented by the plaintiffs operations manager. He was at the time the regional manager of the plaintiff. He was confident and well informed about the plaintiffs policies as regards the promotion and marketing of its products. He had a clear recollection of the events leading up to the dispute and without hesitation conceded matters not falling within his personal knowledge even though those concessions might have been adverse to the plaintiffs case. He impressed me as an honest witness. I have no doubt that he would not have offered the defendant an agreement whereby the plaintiff had to give him N$l,30 credit on each bottle of soft drinks sold. Such an arrangement would not only have been in conflict with the plaintiffs promotion and marketing policies and unfair to other retailers participating in the same promotion, but would also have resulted in the plaintiff actually having had to pay the defendant to sell its products without the plaintiff receiving anything in return for such sales. Why? Because the wholesale price at which the plaintiff sold its products to the defendant was at the time approximately N$l,05 per bottle. If, as the defendant claims, the plaintiff had to pass a credit in favour of the defendant in an amount of N$l,30 per bottle, the nett result thereof would have been that the plaintiff would have had to actually pay the defendant 25 cents per bottle sold! The sum thereof is precisely what the defendant is claiming.
Whereas it may not be uncommon for suppliers or manufacturers to agree to the free distribution of their products for a very limited time and in limited quantities at certain designated outlets, the notion that the plaintiff actually had to pay the defendant to sell its products over an extended period of time in unlimited quantities, is so improbable that it can be discounted. The evidence adduced on behalf of the plaintiff is furthermore corroborated by the substantial number of invoices handed in as exhibits from which it is apparent that the credits passed in favour of the defendant during the promotion period accorded with the plaintiffs version of what the terms of the promotion agreement had been.

When asked why he failed to pay his accounts timeously in terms of the credit agreement, he testified that he did not make any profit on sales during the promotion period. The uncontested evidence is that he continued to make at least 15 cent gross profit on every bottle sold (in addition the further credit of 15 cent per bottle passed on his account by the plaintiff). The gross income generated by the sales was therefor more than sufficient to pay the invoiced amounts.

The strongest argument, advanced by the defendant in support of his contention that the probabilities were favouring him, relates to the reduction of profit he would have had to accept had he participated in the promotion on the terms relied on by the plaintiff. Why, Mr Mouton argued on behalf of the defendant, would the defendant, who normally makes a profit of N$1.45 per bottle sold, agree to an arrangement in terms whereof he would receive only 30 cents per bottle? Had it not been for the fact that the plaintiff discovered, when visiting the defendant's premises during the promotion, that he was still selling the soft drinks at his normal retail price of N$2.50 during the promotion (thereby making a profit of not N$1.45 but N$1.60 per bottle!), the argument might have been more persuasive.

I am satisfied that the plaintiff has proven its claim on a balance of probabilities and that the defendant has failed to discharge the burden of proof he had to discharge in respect of the counterclaim. In view of the remarks I have made above about the unsatisfactory nature of the pleadings, I intent to make a special order as to costs.

In the result I make the following order:
1.	The defendant is ordered to pay to the plaintiff the sum of N$7 289.55 plus interest thereon calculated at a rate of 20% from 15August 1996 until the date of payment thereof;
2.	the defendant is further ordered to pay the plaintiffs costs of this suit, excluding any costs relating to the drafting of or attendance on any of the pleadings filed in convention;
3.	the defendant's claim in reconvention is dismissed with costs.

ON BEHALF OF THE PLAINTIFF: Instructed by:

ON BEHALF OF THE DEFENDANT: Instructed by:
ADV G DICKS Behrens & Pfeiffer

ADV C J MOUTON P F Koep & Co.