Moulas v Aretas No. DCCIV-00-1580

MOULAS v ARETAS
[2002] SADC 7
Judge Vanstone
Civil

In this action the plaintiff’s claim is for the price of goods said by him to have been delivered to the defendant pursuant to an agreement to supply goods on credit.
At all material times the plaintiff operated a building materials supply business in Coober Pedy. During the period 1987 to 1999 the defendant was a customer of the plaintiff and was supplied with goods from time to time. It is the plaintiff’s contention that on almost every occasion this occurred, goods were supplied on credit. The plaintiff claims to have recorded each credit supply, but no note of it was provided to the defendant and nor were invoices sent to him. Leaving aside two substantial payments by the defendant made in 1989 and 1992, and several small credits to the account, entered to reflect goods returned and the like, the indebtedness steadily grew.
However, on 3 October 2000 the plaintiff’s son Dimitrios (Jim), acting with the authority of his father, wrote to the defendant enclosing invoices covering the entire period and demanding payment of the sum of $50,966. He threatened further action in the absence of at least some discussion as to payment. In due course proceedings were issued.
The defendant’s answer to the claim may be summarised by the following contentions:
a)not all the goods said to be supplied were in fact supplied, and the plaintiff’s records are defective,
b)cash payments in addition to those recorded were made by the defendant,
c)some of the goods recorded as being supplied on credit were paid for by cash on the spot,
d)claims for payment for supplies which occurred prior to six years before the letter of demand dated 3 October 2000 are statute barred.
In proof of his case the plaintiff both gave evidence and called his son who had, over many years, assisted him in the business in his school and university holidays.
The plaintiff said in evidence that he extended credit to many customers on similar terms to those given to the defendant. Many of his customers were opal miners. The finding of opal by them would often lead them to bring their accounts up to date. The extended period of time over which the defendant’s account was allowed to run without reduction was, he said, atypical and was due to the friendship between them.
The plaintiff said that when the arrangement between himself and the defendant began, the defendant told him he would pay for the items purchased but that the plaintiff would have to “wait a little” (t/s 45) for payment. Six or so months later when larger items designed for use in the defendant’s new house were taken, the plaintiff asked for some money. His records show that on 8 July 1989 he was paid $3000, which left the defendant’s indebtedness at $6,315. A further payment of $5,500 was made on 2 February 1995 after some prompting by the plaintiff. Again that was applied to the total owing. It was common ground that until 2000 no invoices were sent and no written demand for payment was issued. Plainly there was no expectation on either side that regular, in the sense of say monthly or three monthly payments in reduction of the debt should be made, and nor was any time limit fixed for extinguishment of the debt. In the circumstances the true terms of the agreement are a matter of inference.
The plaintiff’s records consisted of two separate items. He kept a running entry of every credit transaction for all customers in an exercise book referred to as the “day book”. I am satisfied that cash transactions were not entered in the day book (t/s 31,44,119). The relevant day books, being twenty-seven in number, became Exhibit P1. They covered the period 24 August 1988 to 3 July 1999. The plaintiff identified his handwriting in the vast majority of entries, although occasionally his son’s or an employee’s writing also appeared. An entry consisted of the date, name of the customer, the items purchased and the price. The plaintiff said that usually the price would be known and communicated to the customer at the time of supply, but for larger or rarer items, sometimes he would list the goods to be supplied at the time of the order and fill in the price later, without advising the customer. To a suggestion that this left him with scope for inflating his prices, he answered, in effect, that competition dictated that he give good prices.
The day book was essentially a chronological record. Occasionally when more than one transaction with a customer occurred within a few days, the new supply would be recorded immediately under the recent entry, and so out of order. Thus the record would show that all items were supplied on the same (earlier) date. This practice drew some criticism from counsel for the defendant. However, in my view it does not detract from the integrity of the records.
The plaintiff’s evidence was that from time to time an invoice would be prepared in respect of a particular customer. That might occur at the request of that customer, in which case the original would be given to him. Alternatively it might be done merely in an effort to bring an account into a state in which it was able to be readily appreciated, and then the original invoices would remain in the invoice book. The process involved going through the day book and identifying each entry relating to the customer in question, and then reproducing the entry, including the particulars of each item, into the invoice book. By use of carbon paper a duplicate in the same book was produced. When more than one page of the invoice book was involved, a balance was carried forward. This work was almost invariably done by the plaintiff’s son Dimitrios and the entries were generally neat and legible. The system was said to be that once an entry in the day book was transferred to the invoice book, it would be crossed out in the day book.
In the case of compilation of the invoices relating to the defendant, the work was done in several sittings producing batches of invoices, the last batch being raised in late 2000. When that was finished the entirety of the originals were said by Dimitrios Moulas to have been forwarded to the defendant under cover of the letter of demand dated 3 October 2000 (D1). The copy invoices were tendered in evidence (P2). Like the day books, the invoices reflected two payments made by the defendant and several items credited. The total outstanding after the last supply was recorded as $50,966.
In my view the production of the day books in this trial, and their condition, is a matter of some importance. Their features were explained in evidence by both the plaintiff and his son. Their provenance is largely self evident. I accept the evidence of both the plaintiff and his son as to the way in which the day books were kept, that entries were made contemporaneously, that payments were recorded, and that entries were crossed out only when transferred to one of the invoice books. In my view the day books contain a reliable record of the transactions between the plaintiff and the defendant. None of the defendant’s evidence causes me to doubt the integrity and accuracy of the day books. The invoices, as I have observed, are really a secondary record of the same entries in the day book, although extracted and compiled in relation to one customer at a time. With one exception to which I shall return, I found nothing to indicate that the entries were other than correctly transposed and the odd revision of the original price recorded does not undermine that conclusion.
No doubt there were many other methods which might have been employed by the plaintiff to record the credit advanced to his customers. It would be easy to suggest too that the regular sending of invoices would have served to minimise disputes over what goods had been supplied and at what price. Customers might have been more inclined to keep an eye on their total indebtedness if it was drawn to their attention regularly. But none of these matters seem to me to be to the point. There is nothing inherently suspect or inadequate about the plaintiff’s records. While they might contain the odd error, I find that they are reliable and accurate within reasonable bounds.
The plaintiff did not claim to recall all the many transactions set out in the day books. It would have been surprising if he had. But he did give evidence (t/s 48) of an incident occurring when he personally delivered some timber trusses to the defendant, which the defendant had told him were for use in a new house that the defendant was building for his family in Coober Pedy, adjacent to his old one. The plaintiff claimed to have there witnessed an argument between the defendant and another supplier (whom I shall call “A”) over an amount of $400 which A claimed was owing. Ultimately the defendant paid the full amount in front of the plaintiff. That led the plaintiff to ask for some money towards his own account. Within the next day or so the defendant paid him $5,500. The goods delivered on that day were priced at $4,700 plus $1000 for freight. In cross-examination by counsel for the defendant, the payment of $5,500 either on that day or the next was not challenged (t/s 153). But it was suggested that the payment was pursuant to an agreement struck in advance that payment of $5,500 would follow delivery, rather than being precipitated by the plaintiff’s observation of the argument between the defendant and A. Indeed it was put that that argument was not over the size of A’s account but over A’s alleged failure to provide an account. Further, and importantly, it was not suggested to the plaintiff - although the defendant later gave this evidence - that any other large payment was made at about this time. The defendant’s evidence was that he paid in cash for the timber trusses and their freight ahead of their delivery, and that the $5,500 payment was simply to go towards his debt.
In my view this incident and the inconsistency in the defendant’s case as put are telling in terms of the respective credibility of the plaintiff and the defendant. In my mind, the plaintiff’s account of the interaction between the defendant and A had the ring of truth, as did his explanation of the course he took as a result. I found the defendant’s account of the incident to be unpersuasive. That the defendant’s evidence failed to reflect the instructions earlier put to the plaintiff as to payment made at or near the time of delivery of the trusses is a matter which can tell against the defendant’s credit: R v Robinson (1977) Qd.Rep 387; R v Sadaraka (1981) 4 A Crim R 221.
This was not the only occasion when there was inadequacy in the putting of instructions as to alleged payments. After the defendant’s counsel had opened upon his case he sought, and was granted, leave to further cross-examine the plaintiff as to an alleged payment of $6,500 to $7,000 by the defendant towards his indebtedness, which payment was said to have been made in cash in about May 1998, just before the defendant went to Greece for a period. The plaintiff denied any such payment.
I find that had these payments been made, then the plaintiff would have entered them into the day book, just as he entered the July 1989 payment of $3000 and the February 1992 payment of $5,500 and the several small credits. If the defendant genuinely believed that he made such payments then I doubt that his assertion to that effect would have been published to the plaintiff no earlier than after the plaintiff’s case closed. Nor do I consider that the lapse of time since the events can account for these particular contradictions between the respective cases.
Both the plaintiff and the defendant have heavy Greek accents which made it at times difficult to follow their evidence. In addition, their use of English was not as precise as one expects when English is the first language. At times both appeared to have difficulty giving responsive answers to questions, even under examination-in-chief. Despite this, by the end of his evidence, I was satisfied that the plaintiff was an honest witness and that his evidence, particularly on the more important issues, was accurate. In addition, I found the evidence of his son Dimitrios to be impressive. While his evidence went principally to the compilation of the day books and invoices, it touched on various other topics as well, including an alleged exchange between himself and the defendant at Croydon in 1997. As with all of the evidence of Dimitrios Moulas, I accept his evidence in preference to that of the defendant. Indeed in terms of accuracy, I prefer it to even that of the plaintiff.
I have set out already some of the elements of the defendant’s case. The defendant kept no record of the transactions in question but since he claimed that all the materials he purchased were used either at his house premises at Coober Pedy (which included the “new” house and a flat) or at a campsite with some improvements at Lambina via Coober Pedy, he said he was able to determine when and to what extent he purchased materials from the plaintiff. He claimed that some of the materials in his house were purchased from the plaintiff’s competitor, a Mr Antoniou.
I found the defendant’s evidence to be generally unsatisfactory. Although he did not challenge the vast majority of the entries in the day books, he disputed a number of them, saying he had no use for some of the goods or that he obtained supplies of the items in question from elsewhere. He claimed to have struck a deal and paid cash for some of the items or groups of items, yet there can be no doubt that his indebtedness to the plaintiff increased over time. If he was paying cash amounts to the plaintiff from time to time it is more probable that the amount paid would be applied to the debt, as opposed to the latest purchase, as indeed the plaintiff said occurred in 1989 and 1992.
The defendant gave particular evidence in relation to the purchase of carpet referred to at page 12 of the invoices, P2. The entry shows that on 4 January 1992, twenty metres of carpet was purchased for the sum of $1200. The defendant’s evidence was that on this occasion he accompanied his daughter-in-law to the plaintiff’s premises and she purchased carpet for an agreed price of $1000, which she paid in cash on the spot. The defendant said that just prior to going to the plaintiff’s premises he and his daughter-in-law had attended at a carpet shop - the only one in Coober Pedy - but had found that it was not open for business at that time.
The defendant called his daughter-in-law, Eleni Aretis, who generally supported him as to such an occasion. She put the occasion at a time not long before the birth of her daughter in March 1992. Ms Aretis said that prior to going to the plaintiff’s premises she and her father-in-law had attended at the premises of Mr Antoniou. There was no suggestion that his shop was a dedicated carpet supplier, indeed the evidence was to the contrary. Ms Aretis also described another occasion when she claimed to have purchased gyprock from the plaintiff for cash, again in company with her father-in-law. She said she had no immediate use for it, but she and her husband were planning to build in due course on a block of land they had. She said that had not yet occurred. I found her evidence of the gyprock purchase to be wholly improbable, and that finding reinforced my lack of satisfaction as to the carpet purchase. In the result neither the defendant’s evidence nor that of his witness caused me to doubt the integrity of the plaintiff’s records as they relate to the carpet or the gyprock purchases or generally.
A curious feature of the defendant’s evidence was that in relation to invoices numbered 31, 32 and 33, which are part of P2, the defendant acknowledged in evidence his liability. On any view he must therefore pay for the listed goods. Their prices total something over $6000. It was not suggested that any attempt to pay that amount has been made. No explanation was offered. In my mind that shows that the defendant’s attitude to payment of his liabilities is the same, regardless of whether or not he disputes them.
I mentioned earlier that the plaintiff’s calculations of the debt via the invoice books seem to me to be accurate with one exception. In day book number 19 at page 54 appears an entry related to the defendant dated 9 February 1994. Goods purchased on that occasion amounted to $1,150. Against the entry has been written the word “Paid”. The plaintiff gave evidence (t/s 58) that the word appeared to be in his son’s handwriting. The evidence of Dimitrios Moulas did not touch this topic. The plaintiff acknowledged that the writing of that word against that entry could indicate that the amount involved had indeed been paid. Having found that the day books are reliable records, I am not inclined to disregard that endorsement, which was not reproduced in the relevant invoice. Accordingly I propose to deduct the amount of $1150 from the claimed sum.
It remains to determine what was the nature of the contractual relationship between the plaintiff and the defendant: whether there was one contract pursuant to which credit continued to be extended for goods as opposed to a fresh contract of sale for each delivery, what were the applicable terms and when the cause of action accrued.
It seems to be common ground that the arrangement between the parties amounted to a contract (or contracts) by word of mouth and that the terms included that property should pass on delivery. Plainly it was not envisaged on either side that payment should accompany delivery (see s28 Sales of Goods Act 1895). The purchaser was obliged to pay for the goods “in accordance with the terms of sale”: s27 Sales of Good Act 1895. While it was agreed that payment was to be deferred, there is no evidence that there was any particular time limit placed on the credit allowed. Where goods are sold on credit and the period of credit is for a fixed term, no action will lie for the price until that period has expired: Ashforth v Redford (1873) L.R. 9 C.P. 20. Where no period of credit is fixed, some other event must bring the period of credit to an end and result in the accrual of the cause of action. The fact that the arrangement under consideration, including the provision of further supplies continued for many years without an invoice being sent or requested implies that the terms of credit were that no amount would fall due until invoices were delivered, or alternatively, were requested. Clearly though, the agreement did not exclude the making of payments by the defendant during its currency. The fact that such payments as were made during the period of the arrangement were applied to the total outstanding, as opposed to any particular delivery, tends to reinforce that this was one contract for the supply of credit for multiple purchases.
Nothing much turns in this case on whether the event triggering the cause of action should be properly seen as a request for invoices or the delivery of them. The defendant gave evidence that he requested them in 1997, but that was disputed. I prefer the evidence of the plaintiff that they were sent, unsolicited, with the letter of demand of 3 October 2000. Upon that analysis, the cause of action accrued in October 2000 and s35 Limitations of Actions Act 1936 has no application.
Accordingly I find that the amount claimed, less the small adjustment I have made, is owing to the plaintiff.
There will be judgment for the plaintiff in the sum of $49,816. I shall hear the parties as to interest and costs.

[2002] SADC 7

14 February 2002