Paid for a discontinued item

I recently saw a lounge suite at UFO Springfield park. I enquired about it and ordered a white lounge suite. They said they phoned their warehouse and they had the last one and once I paid for it, it will be kept for me. I then made payment of R40 000 and they said I must inform them of when I would like it delivered. Two weeks later I asked them to deliver and I'm only informed now that it was a damaged suite which cannot be sold and the style has been discontinued. They do have the same style in a full leather for an additional cost. Am I wrong to believe that they should check their stock before accepting payment or they should of checked that the stock is in order after receiving payment. Only when I asked for delivery am I told i will now get a refund and i have lost out on other offers because I was led to believe I have my lounge suite already.