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[2018] ZAGPJHC 469
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Bannister's Print (Pty) Ltd v D&A Calendars CC and Another (27238/18) [2018] ZAGPJHC 469; 2018 (6) SA 77 (GJ) (14 August 2018)
HIGH
COURT OF SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
Case
No: 27238/18
REPORTABLE
OF
INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
BANNISTER’S
PRINT (PTY)
LTD
Applicant
and
D
& A CALENDARS
CC
1
st
Respondent
DARRYL
ALBERT
BANNISTER
2
nd
Respondent
Case
summary
:
Obligations – Set-off – Claim that judgment debts
for costs extinguished by set-off against prior loan
debt and debt
arising from services rendered and materials supplied.
Requirements
for set-off to operate considered - debts must inter alia be (a) of
the same nature or kind (b) reciprocal (payable
by and to the same
persons in the same capacities) and (c) liquidated.
A
Party may rely on set-off against a judgment debt and, if necessary,
apply to stay execution on it.
The
loan debt is a claim which the debtor allegedly has against one of
the two indivisible co-creditors of the judgment debts.
The
services rendered and the materials supplied debt is a claim which
the creditor has against one or alternatively the other
or
alternatively both jointly and severally.
The
claim which the debtor might have against one of a number of
indivisible co-creditors cannot be set-off against a debt owed
to
them as a body, and the claim which one of a number of indivisible
co-debtors may have against the common creditor cannot be
set-off
against the debt which the debtors as a body owe to the creditor.
The
alleged solidary liability of co-debtors on the services rendered and
materials supplied debt could not have operated
ipso jure
as a
set-off, also because the facts do not establish that their alleged
liability to the creditor is capable of prompt and easy
proof, and it
is therefore not liquidated in the sense necessary for set-off to
operate. No set-off possible.
JUDGMENT
MEYER
J
[1]
This is an urgent application by the applicant, Bannister’s
Print (Pty) Ltd (Print), against the first respondent,
D&A
Calendars CC (Calendars), and against the second respondent, Mr
Darryl Bannister (Darryl), to stay three writs of execution
that were
issued against Print in respect of taxed bills of costs, pending the
determination of an action that had been instituted
by Print against
Calendars and Darryl in this court under case no. 13780/2011
(the action). Print is controlled by Darryl’s
father, Mr Sonny
Bannister (Sonny), and the members of Calendars are Darryl and his
wife.
[2]
On Friday, 13 July 2018, the sheriff served the three writs of
execution at Print’s business premises, and made an attachment
inter alia
of certain of Print’s printing machines and
equipment. In this regard Sonny states:
‘
The applicant conducts a
printing business. It prints materials ranging from catalogues
and diaries to bookbinding, and in
general, any printing requirement,
to and for the public. Accordingly, the machinery that it
utilises in order to engage
in this business is obviously vital to
its production, and indeed for its day to day operations. The
equipment currently
attached at the behest of the first and second
respondents consists of,
inter
alia
, a Speedmaster
Printing Machine, file cabinets and other printing accessories and
equipment. Any removal of this equipment
would have
catastrophic consequences to the applicant’s printing
business. Succinctly stated, without the printing
machine and
its accessories the applicant would be required to close its doors,
and would be unable to continue with any printing
business. The
printing business is the applicant’s sole source of income, and
means and support for my family.
I should also point out that
the applicant employs approximately twenty staff members, who are
dependent and rely solely for their
income on the applicant.’
[3]
The background facts giving rise to the issue and service of the
three writs of execution are not controversial. Sonny
and his
son, Darryl, were in business together. Their relationship
soured and they are not on good terms. During April
2011, Print
instituted the action against Calendars and Darryl. Therein,
Print advanced two claims: One against Darryl
for payment of
R286 095.47 plus interest in respect of monies lent and advanced
to him personally (the loan debt), and the
other against Calendars,
alternatively against Darryl, or further alternatively against Darryl
and Calendars jointly and severely,
for payment of the sum of R2 390
707.55 plus interest in respect of printing services rendered and
materials supplied in connection
therewith (the services rendered and
materials supplied debt). The summons commencing the action was
served on Calendars
and Darryl on 13 April 2011. They filed a
special plea of prescription, a plea and three counterclaims against
Print.
They, inter alia, plead that the ‘only agreements
that existed, were at all times between’ Print and Calendars.
The action was enrolled for trial in this court on 5 February 2013.
A Mr Mark Lieberthal, who was employed by the attorneys
of record for
Calendars and Darryl, Ian Levitt Attorneys (the Levitt firm), dealt
with the litigation on their behalf. Lieberthal
had completed
his articles of clerkship, but had not been admitted as an attorney.
Levitt states that Lieberthal, in order
to escape the consequences of
his failing to attend to the litigation, forged an agreement of
settlement of the action. The
settlement agreement was signed
by Print and made an order of court when the action was called at
roll call in this court, on 5
February 2018.
[4]
On 3 July 2013, Calendars and Darryl launched an application in this
court under case no. 23534/2013, in which they sought an
order
declaring that the agreement of settlement had been fraudulently
created and is void ab initio (the main application).
Print
opposed the main application, essentially on the basis that, although
the agreement might have been obtained fraudulently,
Calendars and
Darryl had led it reasonably to believe that Lieberthal had authority
to conclude the agreement, and were thus estopped
from asserting its
invalidity. Print nevertheless caused a writ of execution based
on the settlement agreement and court
order to be issued, which
resulted in Calendars and Darryl launching an urgent application that
was enrolled for hearing on 1 August
2013, wherein they sought a stay
of the writ of execution pending the finalisation of their main
application. The interim
relief was granted with costs.
Once taxed, those costs were duly paid by Print.
[5]
The main application was heard by Satchwell J, during November 2013.
On 28 November 2013, she made the following order:
‘
1.1 Declaring the deed of
settlement . . . to have been fraudulently created and null and void
ab intiio.
1.2 Setting aside the court order
granted on 5
th
February 2013 in terms whereof the deed of settlement referred to in
paragraph 1.1 supra was made an order of court.
1.3 The costs of this application
shall be costs in the cause.’
Print
applied for leave to appeal the judgment and order, which application
Satchwell J refused with costs, on 24 February 2013.
The
Supreme Court of Appeal, however, on 4 July 2014, granted Print leave
to appeal to the Full Court of this division, and it
ordered that the
costs of the application for leave to appeal in the high court and
the costs of the application for leave to appeal
in the Supreme Court
of Appeal are to be costs in the appeal. The Full Court
(Masipa, Mashile and Keightly JJ) dismissed
the appeal on the basis
that the elements of estoppel had not been established. The
Supreme Court of Appeal, yet again on
12 September 2016, granted
Print special leave to appeal to the Supreme Court of Appeal and it
ordered that the costs of the application
for special leave to appeal
are to be costs in the appeal. In dismissing the appeal with
costs -
Bannister’s Print v D&A Calendars
(1078/2016)
[2018] ZASCA 17
(15 March 2018) - Lewis JA said this:
‘
[20] Where a lawyer exceeds his
or her mandate, or acts against express instructions, but nonetheless
concluded an agreement on
behalf of a client, the client may be
precluded – estopped – by the other party from denying
the lawyer’s authority.
That is because it is a proper
agreement, on which consensus between them has been reached.
[21] That is not what happened in this
strange matter. The purported agreement of settlement was a
forged document, and cannot
give rise to liability on the part of
Calendars and Darryl. It bore no resemblance to the agreement
that Darryl intended
to conclude, embodied in the document with
deleted provisions, and which he signed. This conclusion is
buttressed by the
order of the Deputy Judge President that the
agreement should not be uplifted before the original was placed in
the court file.
The original was not ever placed there because
it was hidden behind a cupboard in the Levitt offices. If Print
has suffered
any loss at the hands of Lieberthal it has other
remedies at its disposal.’
[6]
On 18 November 2016, Print instituted an action in this court under
case no. 0040901/16 against the Levitt firm.
Based on the
alleged fraudulent misrepresentation perpetrated by Lieberthal, Print
claims damages against the Levitt firm in the
respective amounts of
R208 095.47 and R2 390 707.55 plus interest as well as the costs
of the action against Calendars and
Darryl and the costs of the
appeals in the Full Court and in the Supreme Court of Appeal, inter
alia averring that:
‘
16.1 D&A Calendars CC
became dormant and has remained dormant; and
16.2 Darryl Albert Bannister
liquidated the assets that he was then possessed of in the Republic
of South Africa and in or about
October 2016 immigrated to the United
Kingdom where he has neither means nor assets to liquidate his
indebtedness to the Plaintiff.
Accordingly, the Plaintiff would be
unable to recover the capital, interest and costs owing to it by the
Defendant’s clients
in terms of the summons action.’
[7]
The costs incurred by Calendars and Darryl in the application for
leave to appeal before Satchwell J, the two applications for
leave to
appeal in the Supreme Court of Appeal, the appeal before the Full
Court and the appeal before the Supreme Court of Appeal,
were taxed.
Print did not oppose the taxation of any of the bills of costs.
The total amount of taxed costs owing to
Calendars and Darryl by
Print is the sum of R423 688.92 plus interest thereon at the
rate of 10% per annum. The three
writs of execution in respect
of the taxed bills of costs were issued and, as I have mentioned,
served on Print on 13 July 2018.
The returns of service all
record that payment had been demanded from Sonny and that he ‘was
unable to pay the judgment debt
and costs in full or in part on
behalf of the debtor’. Print now seeks the stay of these writs
pending the determination
of the action.
[8]
Print’s argument in support of the stay of the writs of
execution does not appear to be that ‘real and substantial
justice’ requires a stay, otherwise injustice would be caused.
(See
Graham v Graham
1950 (1) SA 655
(T);
Le Roux v
Yskor Landgoed (Edms) Bpk en andere
1984 (4) SA 252
(T).) The
facts of this case do not establish grounds of justice and fairness
upon which this court could have exercised its wide
discretion to
stay the execution of the costs orders in favour of Calendars and
Darryl. Print is responsible for its own
misfortune.
There is no explanation put before me as to why Print has not
satisfied the writs of execution by payment.
Instead, Print
argues that its indebtedness towards Calendars and Darryl (its
liability to pay the taxed bills of costs (the judgment
debts)) was
extinguished by set-off against the debts – the loan debt and
the services rendered and materials supplied debt
- that are due and
payable to it by Calendars and Darryl, and in respect of which debts
it had instituted the action against them.
Calendars and
Darryl, on the other hand, argue that the requirements for set-off to
operate have not been met. Furthermore,
they argue, that the
action pending the determination of which Print seeks the stay of the
writs of execution, had been abandoned
by Print in instituting action
against the Levitt firm in which action the same claims are being
pursued as those previously pursued
in the action against them.
[9]
François du Bois et al
Wille’s Principles of South
African Law
(9
th
Ed) at 832, states:
‘
Set-off, or compensatio, is the
extinction pro tanto of debts owed reciprocally to each other by two
persons. If the debts
are equal both are discharged; if unequal
the smaller is discharged, the larger remaining in force for the
balance or excess only.
Set-off is equivalent to payment, and
it consequently operates ipso facto and ipso jure, or automatically,
as a discharge total
or partial, of the debts in question, the moment
four conditions or sets of facts occur. Set-off must be pleaded
by the party
that wishes to take advantage of it, so that the court
may give effect to it; but it is not necessary that this party,
before
her debt is due, inform the other party that she will claim
set-off.
The four conditions for set-off to
operate are that both debts must be: (i) of the same nature,
(ii) liquidated; (iii) fully
due, and (iv) payable by and to the same
persons in the same capacities.’
[10]
The three debts are all of the same nature or kind, money. It
is also trite that any kind of debt, including a judgment
debt, may
be extinguished by way of set-off. A Party may thus rely on
set-off against a judgment debt and, if necessary,
apply to stay
execution on it. In
Mosenthal Bros. v Coghlan and Coghlan
(1888) 5 HCG 87 at 90, Laurence JP said the following:
‘
Now with regard to those
proceedings, I feel bound to express my opinion that the advice which
the respondents gave their client
to take out this writ, instead of
allowing the amount of the taxed bill to be set-off against the
larger debt evidenced by liquid
documents, which, as is not denied,
was due to the applicants, was wrong and erroneous advice. That, in
circumstances like the
present, the judgment debt is extinguished by
compensation as well as by direct payment is perfectly clear from the
authorities
which have been cited, the passage in
Voet
and the judgment of the supreme court in the case of
Van
Niekerk’s Trustees vs. Tiran
[1 Juta, 358] ’.
I
n
Mahomed
v Ebraheim
1911
CPD 29
at 32, Buchanan J said:
‘
But what is a judgment?
It is a declaration that so much money is due, and generally an order
is given for the party in default
to pay the amount to be due.
The payment may be made in various ways, as, for instance, in this
case, any allowable set-off
can be made against the amount of the
judgment.’
Also
in
Rainsford v African Banking Corporation
1912 CPD 1106
at
1115, Maasdorp JP said:
‘
Upon the authorities it also
appears that . . . set-off can take place even after judgment,
when an attempt is made to enforce
a writ of execution. That is
the stage at which the proceedings have arrived now. There is a
claim on the writ for
£165, and an admitted counterclaim for
£480.’
(Also
see
The Government v Regna–Adwel Business Machines Africa
(Pty) Ltd
1970 (2) SA 428
(T) at 433F.)
[11]
However, the obstacle to Print’s claim to set-off is the
requirement that for set-off to occur there must be reciprocity
of
debts (both debts must be ‘payable by and to the same persons
in the same capacities’). In
Trustees
of Douglas & Co.’s Insolvent Estate v Natal Bank
(1883)
4 NLR 74
at 77, Connor CJ said:
‘
The general rule as to
compensatio
is
that the debt sought to be compensated must be due to the person to
whom the other debt is due (
Dig.
16.2.1, 16 pr.,
18(1),22,14;
Cod.
4.31.9;
Grot.
3.40.6;
Voet,
16.2.7;
Noodt.
Op.
2.282,
v
Revertamus
;
Mackeld,
§ 49.7;
Poth.
Oblig.
§ 631,632, and
Pand.
16.2 (15,18)).’
(Also
see
Trustees of Long, Eben & Co. v Holmes
(1853-1856) 2
Searle 307
;
Machen’s Trustee v Henrey
(1884-1885)
4 EDC 22
;
Brider v Wills
(1885-1886) 4 SC 282.)
And in
Estate Brown v Brown
1923 EDL 291
at 296, Graham JP
said this:
‘”
The debt must be due to
the very person who opposes it in compensation”
(Pothier,
Oblig
.,
vol. 1., part. 3, sec. 494), or, as stated by Green, p154, vol. III
[Green’s
Encyclopaedia
of the Scotch Law
], “each
of the parties mutually indebted must be a creditor of the same jural
character as that in which B is the debtor.
There can be no
concursus
as regards either party, where, for example, he is creditor in a
fiduciary or other special character, and debtor in his private
capacity, for here he is in truth two different persons and concourse
means the union in one person of the opposite interests involved
in
an obligation.”’
[12]
The loan debt is a debt which, according to Print’s particulars
of claim, is only due and owing by Darryl in his personal
capacity.
However, the taxed costs is a claim which Calendars and Darryl as
indivisible co-creditors have against Print.
They were
co-respondents in each application for leave to appeal and in each
appeal, and represented by the same firm of attorneys
and counsel.
Each appeal was dismissed with costs and the liability for the costs
of the applications for leave to appeal
followed the fate of the
respective appeals. A single bill of costs was drafted and
taxed in each instance; for the application
for leave to appeal
before Satchwell J, for the appeal to the Full Court; for each
application for leave to appeal in the
Supreme Court of Appeal, and
for the appeal to the Supreme Court of Appeal. Calendars and
Darryl have a ‘simple joint
entitlement’ to an
‘indivisible performance’ performance by Print.
They are not solidary co-creditors.
They are together entitled
to the whole performance; one on its or his own is not entitled to
demand that Print performs to it
or to him. (See LAWSA Vol 5 Part 1
2
nd
Ed paras 421-424.) In LAWSA Vol 19 2
nd
Ed
para 244, it is stated:
‘
As far as indivisible
co-creditors and co-debtors are concerned, the claim which the debtor
might have against one of a number of
indivisible co-creditors cannot
be set off against a debt owed to them as a body, and the claim which
one of a number of indivisible
co-debtors may have against the common
creditor cannot be set off against the debt which the debtors as a
body owe to the creditor.’
(Footnotes
omitted)
[13]
It is not even prima facie established in the case of the services
rendered and materials supplied debt whether that debt and
the
judgment debt are owing between the same parties in the same
capacities. In its particulars of claim Print claims payment
of
that debt plus interest from Calendars, alternatively from Darryl and
further alternatively from Calendars and Darryl jointly
and
severely. Furthermore, I am on the scant facts before me unable
to find that the services rendered and materials supplied
debt is
liquidated in the sense that it is capable of speedy and easy proof.
It is trite that a debt is liquidated for the
purpose of set-off
when, as stated in
Wille’s Principles of South African Law
at 833-
‘
. . . its exact money value is
certain or when the amount is admitted by the debtor, or even if the
claim be disputed by the debtor,
it is of such a nature that the
accuracy of the amount can be clearly and promptly established by
proof in court; eg an amount
due under a judgment, or a taxed
bill of costs, or a liquid document signed by the debtor, or a claim
for goods sold and delivered,
or for salary, or for commission for an
agreed amount, or upon an agreed basis.
No set-off takes place where one, if
not both, of the debts is unliquidated, eg a claim for damages, or
for legal costs where the
bill has not been taxed (unless a specific
sum had been agreed upon by the parties), or a claim on an account
which necessitates
a long discussion and debate, or a prolonged
investigation into disputed questions of fact.’
(Footnotes
omitted.)
[14]
In
Fatti’s Engineering Co (Pty) Ltd v Vendick Spares (Pty)
Ltd
1962 (1) SA 736
at 738, Boshoff J said the following:
‘
Our Courts have frequently been
called upon to consider whether a claim was liquidated or not for the
operation of set-off.
Mutual liquidity of debts is an essential
pre-requisite for set-off. A debt must be liquid in the sense
that it is based
on a liquid document or is admitted or its money
value has been ascertained, or in the sense that is capable of prompt
ascertainment.
The decision as to whether a debt is capable of
speedy ascertainment is a matter left to the discretion of the
individual Judge
in each particular case:
Whelan
v Oosthuizen
1937 TPD 304
at p 311;
Lester
Investments (Pty) Ltd v Narshi
1951
(2) SA 464
(C) at p 470, and the authorities referred to therein
.
‘
And
in
Bardopoulos and Macrides v Miltiadous
1947 (4) SA 860
(W)
at 866, Clayden J said the following about the requirement that the
debt must be capable of prompt ascertainment:
‘
Now although set-off can
operate even though some proof is necessary of the debt pleaded in
compensation the debt must be capable
of “speedy and easy
proof” – see
Whelan
v. Oosthuizen
(1937, T.P.D.
304).
’
(Also
see
Standard Bank of South Africa Ltd v Renico Construction (Pty)
Ltd
paras 8-18.)
[15]
Here, Print relies on an oral agreement that was allegedly concluded
during the year 2000 between it and Darryl, both in his
personal
capacity and in his representative capacity on behalf of Calendars,
in terms whereof Print would render printing services
and supply
materials in connection therewith. It was agreed, it is
averred, that the account of Calendars and Darryl with
Print would be
reconciled against monies due to Darryl by Print. It is further
averred that, pursuant to the agreement, Print
rendered services and
supplied materials therewith. (To whom the services were
rendered and the materials supplied,
however, is not averred.)
The balance outstanding on the account, so it is averred, is the sum
of R2 390 707.55,
which amount plus interest are claimed
from Calendars, alternatively from Darryl, and further alternatively
from Calendars and
from Darryl jointly and severally. In their
plea, Calendars and Darryl inter alia deny that Darryl also entered
into the
agreement in his personal capacity. They plead that
the agreement was concluded between Print and Calendars. Print,
according to them, was obliged in terms of the agreement to supply to
Calendars delivery notes, invoices, credit notes and to perform
a
reconciliation of the monies owed to and owed by Calendars, which it
has failed to do. They deny any indebtedness owing
to Print.
[16]
In its counterclaims, Calendars relies on two further agreements that
were allegedly concluded between it and Print. In terms
thereof,
Calendars avers, it would sell calendars for and on behalf of Print
and refer customers to Print, in exchange for which
it would be paid
commissions. Print, it avers, was contractually obliged to
regularly, and not less than monthly, render
to it a full account of
the transactions, but it has failed to do so. Calendars
accordingly claims the rendition of an account,
supported by
vouchers, stretching over several years, a debatement thereof, and
payment to it of whatever amount appears due to
it upon debate.
Calendars further counterclaims for the return of artwork to it or
payment of the value thereof in the sum
of R450 000, as well as
the repayment to it of municipal charges in the sum of R62 000,
which Print allegedly had overcharged
it during a time when it
occupied premises owned by Print. Suffice it to say that
Calendars’ counterclaims are also
hotly disputed by Print in
terms of its pleas to the counterclaims.
[17]
Print needs to establish, not only the solidary liability of
Calendars and Darryl under the agreement on which it relies, but
also
the disputed terms of the agreement and which of the services and
materials were indeed rendered and supplied for which Calendars
and
Darryl incurred such liability. This is also not a case where
the amount is determined if liability, though disputed,
can be
established. Print’s claim may well also necessitate a
long discussion and debate. (See
Bhima
v Proes Street Properties (Pty) Ltd
1956
(1) SA 458
(T).) Those issues, in my view, cannot be considered
as susceptible of being easily determined’. It requires
an investigation that is more than a mechanical exercise (see
Lester
Investments (Pty) Ltd v Narshi
1951
(2) SA 464
(C) at 470F-472A;
Renico
Construction
(supra)
at 95J-96A.) It is not clear on the papers presently before me,
not even
prima
facie
,
that some amount is indeed due by Calendars and Darryl jointly and
severally, let alone that such amount is likely to be equal
or
exceeds the amount of the judgment debts. (See
Toucher
v Stinnes (S.A.) Ltd
1934
CPD 184.)
I am of the view, on the papers presently before me,
that the alleged solidary liability of Calendars and Darryl on the
services
rendered and materials supplied debt could not have operated
ipso
jure
as
a set-off, also because the facts presented in this application do
not establish
prima
facie
that their alleged liability to Print is capable of prompt and easy
proof, and it is therefore not liquidated in the sense necessary
for
set-off to operate.
[18]
In my view, therefore, Print has not succeeded in showing that it
should be allowed to establish at the trial of the action,
that the
loan debt and or the services rendered and materials supplied debt
have operated
ipso jure
as a set-off against the judgment
debts. My findings thus far is dispositive of the relief
claimed in this application and
render it unnecessary to consider
whether or not the other requirements of set-off have been
established and whether, as contended
for by Calendars and Darryl,
the action pending the determination of which Print seeks the stay of
the writs of execution, has
been abandoned by it.
[19]
In the result the following order is made:
The
application is dismissed with costs, including those of two counsel.
______________________________
P.A.
MEYER
JUDGE OF THE HIGH
COURT
Date
of hearing: 31 July 2018
Date
of Judgment: 14 August 2018
Counsel
for Applicant:
Adv
M Basslian SC (assisted by Adv M Segal)
Instructed
by: Schoonees, Belling & Georgiev Attorneys, Maraisburg,
Johannesburg
Counsel
for Respondents: Adv GI Hoffman SC (assisted by Adv JL
Kaplan)
Instructed by: Ian Levitt Attorneys, Sandton