About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2018
>>
[2018] ZAGPJHC 135
|
|
Firstrand Bank Limited t/a Futurefin Finance, A division of Wesbank v Class A Trading (Pty) Ltd and Another (12837/2010) [2018] ZAGPJHC 135 (26 April 2018)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 12837/2010
In
the matter between:
FIRSTRAND
BANK LIMITED
T/A
FUTUREFIN FINANCE,
A
DIVISION OF WESBANK
Plaintiff
and
CLASS
A TRADING (PTY)
LTD
First
Defendant
GEORGE
PROKOS
Second
Defendant
J
U D G M E N T
KEIGHTLEY,
J
INTRODUCTION
1.
In
this matter the plaintiff, FirstRand Bank Limited, trading as
Futurefin Finance, a division of Wesbank (“the bank”),
and the first defendant (“Class A”) entered into an
instalment sale agreement in terms of which Class A purchased a
luxury motor vehicle, which was financed by the bank. Class A
signed an “Instalment Sale (Inside Act)” document,
as
well as a document headed “Acknowledgement of Freedom of
Choice”. The latter included a portion headed “acceptance
of your terms and conditions of this agreement”. Both the
“acknowledgment” section, and the latter “acceptance”
section of the document were signed by Mr Prokas on behalf of Class
A.
2.
Mr
Prokas also executed a deed of suretyship in respect of the
instalment sale agreement, in terms of which he assumed obligations
as both surety and co-principle debtor.
3.
Under
the instalment sale agreement monthly instalments were payable over a
period of two years. Thereafter, the final instalment
was in
the nature of a “balloon payment” of R2 266 949. 00,
which was due on 11 May 2009. This substantial sum
is explained
by the fact that the vehicle was at the upper end of the spectrum of
luxury vehicles, being a Lamborghini Gallardo
E Gear. While the
monthly instalments were paid when they fell due, the final balloon
payment was never paid. In January
2010, Mr Prokas voluntarily
returned the vehicle to the bank, and Class A was liquidated shortly
thereafter.
4.
All
of these facts are common cause.
5.
The
bank now proceeds against Mr Prokas as surety and co-principal
debtor. It claims from him the outstanding balance under
the
installment sale agreement. The sum claimed represents the
amount the bank would have received had the obligations under
that
agreement been met. The bank calculates this amount as being
the amount due under the final balloon payment, less the
amount for
which the vehicle was ultimately sold at public auction (R1 450 080.
00) on 18 March 2011. On this basis the bank
claims contractual
damages in the amount of R1 889 600. 90, plus interest.
6.
In
support of the substance of its claim, the bank relies on the
instalment sale agreement and the deed of suretyship, with associated
documents.
7.
As
far as the instalment sale agreement is concerned, the bank’s
case is that two pages of what appear to be in the nature
of some
form of standard terms and conditions (“the T’s &
C’s”) formed part of the agreement, and thus
bind Mr
Prokas as co-principal debtor and surety. One of the terms
permits that bank to rely on a certificate of balance
as prima facile
evidence of the amount due to the bank. The T’s & C’s
document is not signed by Mr Prokas.
He disputes that they
formed part of the instalment sale agreement.
8.
As
far as the suretyship agreement is concerned, it is common cause that
it does not include an express certificate of balance clause.
9.
In
support of its damages claim, the bank relies on:
1.
A
certificate of balance signed by one Maureen Vorster, who is
designated as Legal Manager of the Specialised Collections
Department.
It reflects that Class A is indebted to the bank in
the amount of R1 880 266. 53.
2.
A
copy of what is described as a detailed statement of account (“the
statement of account”). It is a computerised
statement
and reflects the debits and credits associated with the account from
12 May 2007 to 1 April 2011. The debits include,
among others,
tracing fees; repossession costs; auction fees; storage fees and
arrear interest. The credits include an amount
of R1 450 080.
00 reflected as being “repossession proceeds”.
10.
The
parties agree that the statement of account is “data”
within the meaning of that term as defined in the Electronic
Communications and Transactions Act
[1]
(“ECTA”). As such, that Act applies to the
production of the statement as evidence in the trial.
11.
It
is common cause that the bank did not discover as evidence any
original documentation relating to the transactions. In
response to a request for further discovery, the bank responded that
it did not have in its possession either the original instalment
sale
agreement, or the original suretyship agreement. Furthermore,
the bank did not discover any documents supporting the
debits or
credits reflected on the statement of account as listed above.
There was no explanation provided for this state
of affairs.
12.
To
add to this, the bank did not lead the evidence of Ms Vorster, who,
as I discuss in more detail below, signed not only the certificate
of
balance, but also a certificate under section 15(4) of the ECTA.
Her failure to testify is somewhat puzzling given that,
according to
Mr Khan, the one employee called to testify by the bank, Ms Vorster
is his supervisor and has been in the bank’s
employ for a
substantial period. For reasons that will appear shortly, I
would have thought that she would have been a more
appropriate
employee than Mr Khan to shed light on the bank’s systems and
processes. Unfortunately, this was not to
be. Moreover,
the bank did not lead the evidence of anyone who was directly
involved in the finalisation of the instalment
sale agreement, or the
suretyship agreement. Mr Khan readily conceded that he had not
been in the employ of the bank at the
time the instalment sale
agreement had been entered into, or at the time that the bank
initiated proceedings against Class A and
Mr Prokas consequent on the
alleged default. Accordingly, he was unable to provide any
first-hand, personal testimony on
the relevant issues. I will
return to these aspects of the case shortly.
13.
As
is evident from the dates cited above, for unknown reasons this
dispute appears to have meandered its way to trial in lackadaisical
fashion. The action was instituted in 2010, but was only
brought to trial eight years later. One of the consequences
of
this is that by the time the matter came to trial the issues in
dispute were substantially whittled down. In fact, it
became
evident to both parties during the course of the trial and closing
argument, that the following were the essential issues
in dispute:
1.
Whether
the bank had established that the T’s & C’s (and in
particular, the certificate of balance clause) were
part of the
instalment sale agreement (“the T’s & C’s
issue”).
2.
If
the bank satisfied the court in this regard, the next issue was
whether the certificate of balance clause (which formed part
of the
T’s & C’s) could be applied to Mr Prokas, as surety,
in circumstances where the suretyship agreement itself
did not
contain such a clause (“the certificate of balance issue”).
3.
If
the bank was unable to satisfy the court as regards the T’s and
C’s issue and the certificate of balance issue, it
was then
reliant on the statement of account to prove its claim against Mr
Prokas. The issue that then arises is whether,
under the ECTA
and the general principles pertaining to hearsay evidence, the court
could accept the statement of account as evidence
establishing Class
A’s (and hence Mr Prokas as surety) indebtedness to it for the
contractual damages claimed (“the
ECTA issue”).
14.
For
the sake of clarity, I should add that if the bank satisfied the
court on the first two issues, it would be entitled to rely
on the
certificate of balance to prove Mr Prokas’s indebtedness, and
the ECTA issue would not arise. I should also
add that while in
the pleadings Mr Prokas raised a defence based on an alleged
repudiation of the instalment sale agreement on
the part of the bank,
he did not persist with this defence at trial. Nor did he
persist with the defence that the bank had
acted to the prejudice of
Mr Prokas, as surety, and hence that he was not legally liable to the
bank. In essence, then, the
question is whether the bank has
placed sufficient evidence before the court to prove its contractual
damages against Mr Prokas
in the amount of R1 889 600. 90 as claimed.
15.
The
bank called two witnesses in support of its claim: Mr Khan, to whom I
have referred, and Mr Anderson, an ex-employee of the
bank. Mr
Anderson’s evidence related to communications he had with Mr
Prokas after the balloon payment had fallen due
and was not paid.
The relevance of his evidence was in respect of the two defenses that
Mr Prokas did not pursue. It
bore no material relevance to
issue ultimately in dispute between the parties. Mr Prokas
closed his case without leading
any evidence.
The
T’s & C’s issue
16.
As
I have already indicated, the T’s & C’s document was
not signed by Mr Prokas on behalf of Class A, or by anyone
else for
that matter. The document is completely unsigned. It was
inserted as an attachment to the particulars of claim
as part of a
four page bundle of documents identified in the particulars as the
written instalment sale agreement. The first
of these four
pages is the document I referred to earlier as the “Instalment
Sale (Inside Act)” document. The
fourth page is the
document I referred to earlier as the “Acknowledgement of
Freedom of Choice” document. Both
of these documents are
branded with the FutureFin Finance label. The first page
document reflects an agreement between the
bank and Class A. On
the top right is what appears to be an official description
indicating that it is an “Instalment
Sale Agreement
(Inside Act) (“ISA1”) WHITE”, and it goes on to
state that it is an agreement:
“
By
which the Seller (the bank) sells to the Buyer (Class A) the goods
described below ...
on
the terms and conditions set out in this agreement
.
”
(Emphasis added)
17.
The
document goes on to list items such as amounts debited as “structure
fee”, “licence fee”; the agreed
selling price, the
amount of the initial payment, the principal debt, the amount due as
finance charges, and the total amount payable.
In addition, the
document sets out the applicable fixed interest rate (12.5%), prime
interest rate (12.8%) and contract interest
rate (12.8%). The
document sets out the applicable payment structure of the instalments
due (commencement date, amount of
first instalment, when due, number
of remaining instalments, amounts due and when, and the final
instalment amount and when it
would fall due). Finally, there
is a section headed “Acknowledgements”, requiring
signature on behalf of Class
A, stating that the buyer “hereby
irrevocably authorise(s) debits to (its) bank account with all the
amounts that might at
any future time become due in respect of my
obligation under this agreement”, and an undertaking to advise
the bank of any
change in contact information. Mr Prokas signed
this document.
18.
The
document on the fourth page of the attachment to the particulars of
claim is, as I have indicated, headed “Acknowledgement
of
Freedom of Choice”. It states as follows:
“
You
have applied for finance from Wesbank who may require certain
security from you to protect is interest either in the form of
a
cession of a life policy or the making available of a short-term
policy or both. Should this be the case, you may choose
whether
to cede an existing policy having an appropriate value or to enter
into a new one. If you wish to enter into a new
policy or make
an existing policy available you have the freedom of choice as to
(among others, the insurer, whether the policy
would exceed the value
of the debt) ... Wesbank request that you acknowledge, by signing
below, that before the policy is used
as security for your debt or
obligations to Wesbank: (i) you have been given written notification
of your entitlement to freedom
of choice (see above); (ii) you have
exercised it; and (iii) you were not coerced or induced in any way in
the exercising of your
choice.
”
Thereafter,
Mr Prokas signed under the heading “Acknowledgement”.
At the bottom of the Acknowledgement of Freedom
of Choice document is
a block headed “Acceptance of your terms and conditions of this
agreement”. Mr Prokas signed
above the statement: “
Please
sign here to acknowledge that you, the Buyer, have received the Terms
and Conditions
”. (Emphasis added)
19.
The
T’s & C’s are inserted between the first and
the fourth pages of what is described in the particulars
as being the
instalment sale agreement relied on by the bank. The bank’s
case is that the T’s & C’s
attached were those agreed
to by Mr Prokas at the time that he entered into the agreement on
behalf of Class A. In disputing
that the T’s & C’s
attached to the particulars of claim formed part of the agreement
between Class A and the bank,
Mr Prokas points out (through his
counsel, Mr Heher) that:
1.
While
the first and final pages of what the bank contended formed part of
the bundle of documents constituting the instalment sale
agreement
were clearly FutureFin branded documents, this was not the case with
the T’s & C’s document. It
was simply headed
“Wesbank Instalment Sale Agreement (Inside ACT) ((ISA1)”.
2.
As
I have already indicated, the T’s & C’s bear no
signature or initial by Mr Prokas, or by anyone on behalf of
the
bank.
3.
While
the first and fourth pages of the attachment bear a fax transmission
imprint dated 18 May 2007, indicating that they were
pages 5 & 12
respectively of the transmission, there is no fax transmission
imprint at all on the two T’s & C’s
pages.
4.
Significantly,
there is no indication from the first page of the agreement that any
terms and conditions, other than those set out
in that document
itself, are incorporated by reference therein. Consequently, it
falls to the bank to establish that the
T’s & C’s
attached are actually those assented to by Mr Prokas on behalf of
Class A.
20.
Counsel
for Mr Prokas submitted that the above facts are sufficient to place
doubt on the bank’s version that the T’s
& C’s
annexed to the particulars of claim were indeed those to which Mr
Prokas was privy, and to which he agreed to bind
Class A. It is
trite that a plaintiff bears the onus of establishing what it
pleads. If one considers the documents
prima facie, it seems to
me that there is doubt as to whether the T’s & C’s
attached to the particulars of claim
were indeed those applicable to
the agreement between Class A and the bank. This is a matter
that could quite easily have
been clarified by the bank through
leading appropriate evidence to explain what processes the bank
follows if it intends incorporating
standard terms and conditions
into an instalment sale agreement of this type: does it require the
client to initial the terms and
conditions? if not, how is the client
bound? how are the terms and conditions brought to the attention of
client etc?
21.
Unfortunately,
the only evidence the bank led in this regard was that of a current
employee, Mr Khan, who is a Defended Actions
Controller in the
specialised collections department. He testified that he has
been so employed for four years. He
accepted that he had no
personal knowledge of the transactions relevant to the dispute
between the bank and Mr Prokas. He
explained that when matters
are handed over by the bank for legal action, an employee in his
position will be tasked to liaise
with the attorney once a client
defends the matter. At that stage, the employee (in this case
Mr Khan) is handed the client
file. It would only be from that
point that he could bear any first-hand knowledge of the matter.
He explained that
other employees would have dealt with the file
prior to his employment, which only commenced in 2014.
22.
When
counsel for Mr Prokas put to Mr Khan that from the features of the
T’s & C’s listed earlier, it appeared that
they had
been inserted after the instalment sale was concluded, Mr Khan
accepted that it did not appear that they were part of
the documents
faxed to Class A. He explained that he had found the T’s
& C’s in Class A’s file when
it was given to him and
he had simply relied on the fact that they were bundled together in
the file. It seems that Mr Khan
drew from this the conclusion
that the T’s & C’s were those originally
forming part of the agreement.
He again conceded that he could
not shed any personal light on the matter, as he had not been
employed at the bank at the time.
23.
Mr
Khan was asked by counsel for the bank to comment on the word “White”
that appears at the foot of the first T’s
& C’s
page. He explained that this designation indicated that the T’s
& C’s were associated with
a FutureFin agreement.
Although the system had since been discontinued, the bank had used
different colours to designate
what category of vehicle (and hence
which finance arm of the bank) was involved as seller. The
designation of “White”
indicated that it was a luxury
vehicle transaction, and at that time, these were concluded by
FutureFin. There is some support
for Mr Khan’s
explanation in that the words “(“ISA1”) WHITE”
are written on the first page of the
agreement. However, Mr
Khan again correctly conceded that he had no personal knowledge of
the system that he had referred
to and told the court that it
had been explained to him by someone at the bank. Mr Heher
correctly pointed out that
Mr Khan’s evidence was no more than
hearsay on this score.
24.
The
overriding difficulty for the bank is that it failed to call anyone
who could give first-hand evidence to link the T’s
& C’s
attached to the particulars of claim with the instalment sale
agreement. In other words, there is no evidence
by the bank
that the “Acknowledgement” signed by Mr Prokas on the
last page of the agreement related to the T’s
& C’s
attached to the particulars of claim. While it might be
supposed that the bank would require clients like
Class A to bind
themselves to terms and conditions like those in the T’s &
C’s, supposition is not sufficient to
meet the onus borne by
the bank when, as here, there are a number of factors placing that
link in doubt.
25.
For
these reasons, I find that the bank has failed to establish that the
T’s & C’s it relies upon were binding on
Class A.
As such, the bank cannot, for this reason alone, rely on the
certificate of balance clause contained in the T’s
& C’s.
It is required to prove its damages by way of other evidence.
THE
CERTIFICATE OF BALANCE ISSUE
26.
Even
if I had concluded differently as regards the T’s & C’s
issue, there is a further reason why the bank cannot
rely on the
certificate of balance clause against Mr Prokas (as opposed to Class
A). I have already indicated what the ambit
of the issue here
involves: the suretyship agreement signed by Mr Prokas did not
contain a certificate of balance clause, nor did
it incorporate into
the agreement the T’s & C’s relied on by the bank.
The question that arises is whether,
in these circumstances, the
certificate of balance may be entered as prima facie evidence to
establish thebank’s claim for
contractual damages against Mr
Prokas?
27.
There
is existing binding authority from this Division indicating that the
answer to this question is no. In
Thrupp
Investment Holdings (Pty) Ltd v Goldrick
[2]
a full court held as follows in this regard:
“
As
regards the effect of the absence of a certificate-of-balance clause
in the suretyship, counsel for the appellant submitted that
a proper
interpretation of the certificate-of-indebtedness clause contained in
the lease agreement leads one to conclude that the
production of such
a certificate in fact established the liability of the lessee for the
amount certified, which in turn was sufficient
to constitute prima
facie proof of the liability of the sureties. The argument in my view
is flawed in its premise. A certificate
clause, it has been held in a
number of cases, is designed to, facilitate proof of the amount of
liability (see Nedbank Ltd v Abstein
Distributors (Pty) Ltd and
Others
1989 (3) SA 750
(T); Bank of Lisbon International Ltd v
Venter en 'n Ander
1990 (4) SA 463
(A) at 478E).
The
certificate therefore is merely an evidentiary tool provided for in
an agreement by one contracting party to the other to facilitate
proof of the amount of indebtedness. It does not in itself establish
liability.
In casu the clause was only valid as between the lessor and the
lessee and therefore could not be invoked against the sureties.
The
fact that the suretyship was referred to in, and in addition to that,
also annexed to, the lease agreement is of no moment.
The
suretyship although collateral to the lease agreement, remains a
separate and independent agreement and the certificate-of-balance
clause therefore, as correctly held by the judge a quo, did not by
reference become incorporated into the suretyship.
”
[3]
(emphasis added)
28.
I
might add that in
Thrupp
,
as here, the surety had also assumed obligations as co-principal
debtor. The bank sought to distinguish the
Thrupp
case from the present one. Counsel submitted that the
distinction lay in the fact that in Thrupp the suretyship was
referred
to in the lease agreement and also annexed to the lease
agreement. In the present case, on the other hand, the
suretyship
agreement made specific reference to the instalment sale
agreement, which was not the case in
Thrupp
.
Mr Prokas, as surety, had acknowledged in the suretyship agreement
that he “had sight of the Agreement to which (the
suretyship)
refers prior to signature.” This, counsel for the bank
submitted, was sufficient to establish that there
was at least an
implied incorporation by reference of the T’s & C’s
into the suretyship agreement.
29.
In
my view, this is a stretch too far. The suretyship agreement
says no more than that Mr Prokas had “had sight of”
the
instalment sale agreement. If the intention of the parties was
that Mr Prokas would further be bound by the T’s
& C’s
attached to the agreement, I would have expected different language
to have been used. Having had sight of
a document does not even
require that the party concerned has read it, or understands it, let
alone that he or she has implicitly
agreed to be found by all terms
and conditions attached to it. There was also no evidence by
the bank, as I have previously
indicated, as to what, exactly, was
placed before Mr Prokas when he signed the instalment sale agreement
on behalf of Class A,
and the suretyship agreement in is personal
capacity. In particular, there is no evidence that Mr Prokas
“had sight
of” the T’s & C’s relied on by
the bank.
30.
The
bank does not suggest that the
Thrupp
decision is wrong. As a single judge, I am bound by it, and
must apply the principle laid down there. In the circumstances,
I cannot find in favour of the bank on the certificate of balance
issue either.
31.
This
means that, for this reason too, the bank cannot rely on the
certificate of balance to establish the amount claimed from Mr
Prokas. It must produce other evidence to prove its damages.
THE
ECTA ISSUE
32.
The
only other evidence provided by the bank to prove its damages is the
statement of account which, both parties agree, falls within
the
ambit of the ECTA.
33.
Section
15 in toto provides as follows:
“
15.
Admissibility
and evidential weight of data messages
(1)
In any legal proceedings, the rules of evidence must not be applied
so as to deny the admissibility
of a data message, in evidence-
(a)
on the mere grounds that it is constituted by a data message; or
(b)
if it is the best evidence that the person adducing it could
reasonably be expected
to obtain, on the grounds that it is not in
its original form.
(2)
Information in the form of a data message must be given due
evidential weight.
(3)
In assessing the evidential weight of a data message, regard must be
had to-
(a)
the reliability of the manner in which the data message was
generated, stored
or communicated;
(b)
the reliability of the manner in which the integrity of the data
message was
maintained;
(c)
the manner in which its originator was identified; and
(d)
any other relevant factor.
(4)
A
data message made by a person in the ordinary course of business
,
or a copy or printout of or an extract from such data message
certified
to be correct by an officer in the service of such person, is on its
mere production in any civil
,
criminal, administrative or disciplinary proceedings under any law,
the rules of a self regulatory organisation or any other law
or the
common law,
admissible
in evidence against any person and rebuttable proof of the facts
contained in such record, copy, printout or extract
.
”
(emphasis
added)
34.
The
bank produced a certificate in terms of section 15(4) of that Act.
It was signed by the same Ms Vorster referred to earlier,
in her
capacity as Legal Manager: Specialised Collections. She
certified that the statement of account was produced in the
ordinary
course of business of the bank, and was correct. The bank
relies on this certificate to establish its damages, pointing
out
that Mr Prokas has produced no evidence to rebut the amounts
reflected as debits and credits in the statement of account.
35.
There
has been quite extensive discussion in academia and the courts on the
meaning and application of section 15(4) and of its
relationship with
the hearsay rule, as developed under the Law of Evidence Amendment
Act (“LEAA”).
[4]
.
A full court of this Division
[5]
summarised the differing views of Schwikkard and Van der Merwe,
[6]
on the one hand, and Zeffert et al,
[7]
on the other.
36.
The
former took the view that the effect of section 15(4) was to
subjugate the hearsay rule insofar as the admissibility of computer
printouts is concerned. In other words, even if it constituted
hearsay evidence, courts had no discretion but to admit it
and then,
in accordance with section 15(3), to weigh its probatory value.
Zeffert et al, took a different view. They
posited as
follows:
“
Consider,
for instance, the situation where a party tenders in evidence, via
the computer, information that has been processed and
generated by
that computer (where, that is, the computer has not been used merely
to store information). If it is accepted
- as we submit it must
be - that this evidence is on the face of it - before, that is, we
consider the effect of the new Act -
hearsay, can section 15 be used
to admit it? It can, it seems, if the only impediment to its
reception is the fact that it
is constituted by a data message.
Would it be admissible, then, if it were
not
so constituted? To answer this question, one has to ask what it
would
be if it were not constituted by a data message. If it were to
be regarded as direct oral evidence furnished by a person
upon whose
credibility the probative value of the evidence depends, it would
clearly be hearsay and would be admissible.
But if it were to
be regarded as evidence tendered by a witness other than the person
upon whose credibility the probative value
of the evidence depends,
it would still be hearsay and would, to be admissible, have to
satisfy the requirements of section 3 of
the (LEAA) or some other
exception to the hearsay rule ... .
”
[8]
(emphasis in the original)
37.
It
seems from the full court made clear in LA Consortium, that the court
was persuaded by the view of Zeffert et al, rather than
by the views
of Schwikkard and Van der Merwe. The full court emphasised that
the effect of the ECTA is:
“
not
... that hearsay is admissible just because it is contained in a data
message. The principle of ‘functional equivalence’
does not free data messages from the normal strictures of the law of
evidence, but only from those referred to in s 15(1).
It
follows that despite the very wide words of s 15(4), any hearsay
contained in a data message must pass the criterial set out
in s3 of
the (LEAA).
”
[9]
38.
In
other words, the real question is what is the nature of the data
evidence in question in each case. If it is generated
by a
computer, and hence falls into the first category identified by
Zeffert et al, then the evidence is akin to evidence given
by the
computer itself. It is not dependent for its probative value on
the credibility of any other witness. In fact,
only the
computer could give direct evidence of the information generated and
it does so in the form of the data provided.
Thus, while the
data is hearsay (in that a witness cannot be called to give direct
evidence ), the effect of ECTA is that it cannot
be excluded solely
because it is in the form of data. However, if the data is
merely stored on the computer (as per the second
category identified
by Zeffert et al), then it falls into a different category of
hearsay. To be admissible, that data would
have to meet the
requirements also of the LEAA, although there may be some overlap
between the factors prescribed in section 3
of that Act and section
15(3) of the ECTA.
39.
Mr
Pretorius for the bank accepted the distinction between data
generated
by
a computer, and data that is merely
stored
on
a computer for purposes of the ECTA. He submitted that the
statement of account fell into the former category. As such,
he
submitted that the statement of account was not dependent for its
probative value on the credibility of any other person, and
it was
rendered admissible under section 15 by virtue of the section 15(4)
certificate. On this submission, it is not necessary
to
consider whether the evidence is admissible in terms of section 3 of
the LEAA.
40.
Mr
Pretorius based his submission on the evidence of Mr Khan.
Under cross examination Mr Khan conceded that much of his evidence
was based on the statement of account. He conceded further that
he did not have personal knowledge of the information entered
in the
statement of account, or of what the origin was of that information.
Thus, for example, he did not know how the interest
was calculated.
He stated that: “the system does it”. Mr Pretorius
submitted that this constituted unchallenged
evidence by the
bank that the statement of account constituted data that was
generated by, rather than constituting information
stored on, the
computer.
41.
This
simply cannot be in a case like the present. Because of his
lack of personal knowledge, Mr Khan clearly could not give
first hand
evidence of how the computerisation of the statements of account
system worked. I mean no criticism of Mr Khan
by this
observation. He simply was not employed in a capacity where he
would have been privy to that information. It
follows that his
statement (repeated more than once) that the statement of account was
“done by the system” is hearsay,
and in any event simply
has no probative value. Mr Khan’s evidence does not
establish that the statement of account
constitutes
computer-generated (as opposed to computer-stored) data.
42.
In
addition, it is quite clear as a matter of common sense that the
statement of account simply could not have been generated by
a
computer in totality. I earlier referred to the kinds of items
that were entered as debits, and the credit entered after
the vehicle
was repossessed. It is incontrovertible that these figures were
dependent on someone inputting data onto the
system. The origin
of that data would have been documentation (for example, the invoices
from the auctioneers) provided to
whoever had the responsibility of
managing the accounts system and of entering the correct amounts.
Unfortunately, the court
has before it no evidence from anyone who
managed the system, and no documentary evidence to substantiate the
amounts so entered.
Ms Vorster, who signed the section 15(4)
certificate did not testify before court to indicate what her role
was regarding managing
the accounts system, if any. The
certificate gives no indication that she had any role to play in this
regard, or on what
basis she is in a position to state that the
statement of account is correct. Moreover, the bank tendered no
explanation
whatsoever as to why this kind of evidence was not
forthcoming.
43.
I
accordingly find that the bank has failed to establish that the
statement of account constitutes computer-generated data
as
contended, and that it is for this reason admissible as rebuttable
evidence of its contractual damages in terms of section 15(1)
read
with section 15(4) of the ECTA.
44.
The
bank, belatedly and in very lukewarm fashion, following an engagement
with the court, submitted in the alternative that I should
rule the
statement of account as admissible hearsay evidence under section 3
of the LEAA. Of course, in view of my finding
that the bank
cannot succeed in its main submission that the statement of account
is admissible in that it constitutes computer-generated
data, the
LEAA would in any event be applicable. I would be required to
consider both the ECTA, together with the LEAA in
order to determine
the admissibility of the statement of account. The bank was
correct not to press its reliance on section
3 of the LEAA with any
enthusiasm: it simply failed to lead any evidence to meet the
requirements laid down in that section.
Accordingly, this does
not provide a viable stop-gap measure for the bank.
45.
For
these reasons, I find that there is no admissible evidence to support
the bank’s claim for contractual damages.
It follows that
its claim must fail.
46.
I
wish to point out that this finding is very specific to the facts
before me. The ECTA is a useful tool in this data age.
As
Zeffert et al point out, its purpose is probably to free as much
computer-generated evidence from the hearsay trap as can be
justified
without doing violence to the important values of the exclusionary
rule pertaining to hearsay evidence.
[10]
However, as this case demonstrates, it is not a cure-all, nor is it a
short-cut. A plaintiff relying on the ECTA must
provide
sufficient evidence to put the court in a proper position to enable
it to determine the true nature of the data at issue,
and how the
data system operates. Without evidence of this nature, the
court is hamstrung in making a proper assessment of
the integrity of
the system, and hence of the reliability of the data information
sought to be admitted. These are crucial
considerations for
purposes of determining whether the data is admissible, whether under
the provisions of the ECTA alone, or in
terms of the ECTA in
conjunction with section 3 of the LEAA, as the case may be.
CONCLUSION
AND ORDER
47.
For
the reasons more full set out above, I make the following order:
The
plaintiff’s claim is dismissed with costs.
_______________________________________
R
M KEIGHTLEY
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Date
Heard
: 16 March 2018
Date
of Judgment
: 26 April 2018
Counsel
for the applicant
: WG Pretorius
Instructed
by
: Rossouws, Lesie Incorporated
Counsel
for respondent
: JM Heher
Instructed
by
: Raymond Druker Attorneys
[1]
Act 25 of 2002
[2]
2008 (2) SA 253 (W)
[3]
At para 6
[4]
Act 45 of 1988
[5]
In
LA Consortium &
Vending CC t/a LA Enterprises v MTN Service Provider (Pty) Ltd
2011 (4) SA 577 (GSJ)
[6]
Principles of Evidence (2002) at 385
[7]
The South African Law of Evidence (2003) at 394
[8]
Cited in
LA
Consortium
at 591E-592B
[9]
At para 19, 592E-593A
[10]
Cited in
LA
Consortium
at 591E