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[2024] ZAFSHC 93
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Cooper N.O and Another v Matjhabeng Local Municipality and Another (4733/2023) [2024] ZAFSHC 93 (22 March 2024)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
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IN THE HIGH COURT
OF SOUTH AFRICA,
FREE STATE
DIVISION, BLOEMFONTEIN
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
CaseNumber:
4733/2023
In
the matter between:
CHAVONNES
BADENHORST ST CLAIR
COOPER
N.O.
FIRST
APPLICANT
REFILWE
TLHABANYANE N.O.
SECOND
APPLICANT
(In
their capacities as co-liquidators of
Oxy
Trading 279 (Pty) Ltd [in liquidation]-
Master’s
reference B35/2022)
and
MATJHABENG
LOCAL MUNICIPALITY
FIRST
RESPONDENT
JAN
GYSBERT MARITZ
SECOND
RESPONDENT
CORAM
:
BUYS, AJ
HEARD
ON
:
15
FEBRUARY 2024
DELIVERED
ON
:
22 MARCH
2024
[1]
This is the court’s judgment
in the opposed application in terms of which the applicant seeks the
following relief:
“
1.
Judgement against the First Respondent for:
1.1.
Payment of R5 000 000.00 (five million rand);
1.2.
Interest on R5 000 000.00 calculated at the statutory
interest rate per annum from
23 March 2022, alternatively a tempore
mora, until date of payment;
1.3.
Cost of the application (sic)
2.
Further and/or alternative relief.”
[2]
The relief sought by the applicant premised from a Final Settlement
Agreement (“
the settlement agreement
”) concluded
on 6 July 2021 between the applicant, represented by Mr DL Motaung in
his capacity as executor in the estate
of the late FM Dingani, and
the first respondent, represented by Mrs Z Tindleni, in her capacity
as Municipal Manager of the first
respondent.
[3]
Before I deal with the settlement agreement, the litigious history
leading up to the settlement
agreement is summarised
infra
.
[4]
On 20 March 2020, before the liquidation of Oxy Trading 279 (Pty) Ltd
(“
Oxy Trading
”), Oxy Trading instituted
provisional sentence summons proceedings against the first respondent
for payment of the amount
of R21 018 279.20, interest on
the said amount and costs of suit.
[5]
Provisional sentence was granted in favour of Oxy Trading on 17
November 2020 for the relief sought
supra
, and as a result of
the provisional sentence, OXY Trading caused a writ of execution to
be issued to attach the first respondent’s
bank account. This
prompted an urgent application by the first respondent to interdict
Oxy Trading to proceed with the execution
of the writ and furthermore
to set aside the attachment of its bank account.
[6]
Before the urgent application was adjudicated, the applicant and the
first respondent concluded
the settlement agreement. For purposes of
this application, the following material terms and conditions were
agreed to:
“
5
It is further recorded
that the parties appointed experts i.e. accounts, mediators and
security consultants to assist in the conclusion
of this settlement
agreement.
6.
The parties therefore
agree in full and final settlement of the dispute on the following:
6.1
the Defendant shall pay to the Plaintiff R15 000 000.00
(Fifteen Million Rand)
as final payment on or before 16 July 2021;
6.2
the Plaintiff shall cease the prosecution of its claim in the High
Court within 14 days
of the payment referred to in paragraph 6.1
being made;
6.3
the Plaintiff shall instruct the Sheriff to release all property of
the Defendant attached
by writ of execution under the abovementioned
case number upon payment being made by the Defendant;
6.4
the Plaintiff shall be responsible for the payment of the experts
referred to paragraph
5 and the costs of the Defendant as referred to
in paragraph 1(c) of the provisional sentence order.
7.
The parties agree to that
the payment referred to in paragraph 6.1 shall be paid into the trust
account of the Defendant’s
attorney to hold as security for the
fulfilment of Plaintiffs (sic) obligations under this agreement and
to facilitate payment
as referred to in paragraph 6.4.
8.
On completion of its
obligation under this agreement, the Plaintiff shall dispatch to the
Defendant’s attorney of record a
letter confirming compliance
with this agreement and shall provide them with the details of the
trust account of the Executor into
which the balance payment shall be
made.
9.
The Defendant shall
within 7(seven) days after receipt of confirmation from the Plaintiff
provide a full balance statement and make
payment into the account
provided to by the Plaintiff.”
[7]
The payment of the costs order contained in paragraph 1(c) of the
provisional sentence as referred
to in clause 6.4
supra
reads:
“
Costs
occasioned by the postponement of the matter on 22 October 2020 is
awarded to the defendant;”
[8]
It is undisputed that Oxy Trading complied with its obligations in
terms of the settlement agreement.
[9]
It is the applicants’ case that:
[9.1] On 6
August 2021 and 10 August 2021 three separate payments in the total
amount of R10 000 000.00 were
made by the first respondent,
through the second respondent, to Oryx Trading’s attorney,
namely Motaung Attorneys.
[9.2] On 23
March 2022, the second respondent, acting on behalf of the first
respondent, provided Oxy Trading with a
statement of account in
respect of the outstanding balance of R5 000 000.00. In
this statement of account, the second
respondent purported to
indicate, on behalf of the first respondent, that the outstanding
balance of R5 000 000.00 has
in fact been set off by monies
which became due to Maritz Attorneys, JM Professional Services CC and
Bokwa Attorneys.
[9.3] The
amounts deducted from the outstanding balance referred to
supra
were not due and payable by Oxy Trading and could not have been
accounted for against the balance of R5 000 000.00 in
terms
of the settlement agreement. I do not intent to deal with these
deductions, because, as conceded by the first respondent
infra
,
no amounts were payable by Oxy Trading and should not have been
deducted from the outstanding debt in terms of the settlement
agreement.
[9.4] The
first respondent is in breach of the payment terms of the settlement
agreement, in that it failed to pay the
balance of the of R5 000
000.00 due and owing to Oxy Trading.
[10]
The first respondent’s opposition of the relief sought by the
applicant is based on the following:
[10.1] A letter was
received from its attorney, the second respondent, on 15 July 2021
wherein the second respondent provided
the first respondent with the
bank account details into which the payment of the amount due and
payable to the applicant in terms
of the settlement agreement had to
be made. The bank account number provided by the second respondent
was FNB Account number 62
7[…], purported to be the bank
account of Motaung Attorneys.
[10.2] The first
respondent paid the total amount of R15 000 000.00 into the
bank account number referred to
supra
on 16 July 2021, and did
not make any deductions from the said amount.
[10.3] The first
respondent, by virtue of the fact that the second respondent
indicated that the bank account referred to
supra
was that of
Motaung Attorneys, made payment of the settlement amount to Motaung
Attorneys, being the trust account of Mr Motaung,
the executor as
referred to in the settlement agreement, and consequently it
discharged its obligations in terms of the settlement
agreement.
[10.4] The first
respondent was represented at all relevant times by Mr Maritz, an
attorney at Bokwa Attorneys with offices
in Welkom. The first
respondent has no knowledge of the statement of account provided to
Oxy Trading on 23 March 2022, and furthermore
denies any contingency
agreement between itself, Bokwa Attorneys or Maritz Attorneys. The
first respondent specifically denies
any knowledge of Maritz
Attorneys and JM Professional Services CC.
[11]
In its replying affidavit in answer to the first respondent’s
allegation that it paid only one amount
into the bank account
provided by Mr Maritz referred to
supra
, the applicants rely
on:
[11.1] The specific
obligation on the first respondent in terms of the settlement
agreement, namely that payment of the settlement
amount referred to
supra
was to be made by the first respondent into the trust
account of its attorney of record to hold as security pending the
fulfilment
of Oxy Trading’s obligations in terms of the
settlement agreement. Only after Oxy Trading complied with its
obligations in
terms of the settlement agreement, was the balance of
the settlement amount to be paid into the bank account provided by
Oxy Trading,
namely the trust account of the executor. The first
respondent did not comply fully with this obligation.
[11.2] The bank
account number provided to the first respondent by the second
respondent referred to
supra
was neither the trust account of
Mr Motaung nor was such account details provided to the first and
second respondents by Oxy Trading,
the executor or the applicants.
[11.3] The trust
account number of Motaung Attorneys was in fact 62 2[…]
and not as specified by the second respondent.
[11.4] From the
bank account statements of account number 62 7[…] (the
purported trust account of Motaung Attorneys)
provided by the second
respondent during an insolvency enquiry conducted by the applicants,
it was established that the amount
of R15 000 000.00 was
paid into the said account on 16 July 2021, and the subsequent
payments made to Mr Motaung referred
to
supra
on 6 and 10
August 2021 were made from this account.
[11.5] It was
further established that account number 62 7[…] is the
bank account of Major Issues Trading 501
CC (“
Major
Issues
”), and during the period 11 October 2019 to 14
October 2022, the second respondent was the sole member of Major
Issues.
[12]
In argument, Mrs Ngubeni, on behalf of the first respondent, made the
following submissions:
[12.1] Not only was
the first respondent not aware of the incorrect bank account details
provided by the second respondent
to the first respondent referred to
supra
, the first respondent also made the applicants aware
that payment was made by the first respondent, but regardless of
this, the
applicants elected to pursue this application against the
first respondent, knowing that the second respondent was paid the
amount
claimed by the applicants.
[12.2] Regardless
the above knowledge, the applicants persist in not seeking relief
against the second respondent.
[12.3] The executor
(Mr Motaung), accepted the payment referred to
supra
from an
entity belonging to the second respondent in three instalments, none
of which were in terms of the settlement agreement.
The acceptance of
these payments were outside the terms of the settlement agreement.
Mrs Ngubeni submitted further in this regard
that the payments made
in instalments on 6 and 10 August 2021 were clearly contrary to the
settlement agreement, and the executor
never questioned this
non-compliance of the payment terms set out in the settlement
agreement. These submissions morphed into a
final contention that
both parties to the settlement agreement were in breach thereof.
[12.4] Mrs Ngubeni
conceded that the second respondent represented the first respondent
through Bokwa Attorneys at the time
the banking details of Major
Issues were provided to the first respondent, purportedly to be the
trust account details of the executor.
[12.5] Mrs Ngubeni
submitted further that Bokwa Attorneys should have been joined as a
party to the proceedings and that the
applicants should have gone
after Bokwa Attorneys, alternatively the second respondent, for
payment of the outstanding balance
of R5 000 000.00. It was
suggested by Mrs Ngubeni that the mere fact that the outstanding
balance is public funds, this
Court should find it unreasonable for
the first respondent to be held liable for payment of the said
balance, because if the first
respondent is found to be liable, it
will result in the first respondent paying double the amount it
already paid in terms of the
settlement agreement.
[13]
I agree with the submission on behalf of the first respondent only in
as far as it relates to the contention
that the first respondent only
obtained knowledge of the incorrect bank account details provided by
the second respondent when
the applicants’ replying affidavit
was filed. However, for reasons set out
infra
, I do not agree
with the remaining issues raised on behalf of the first respondent,
especially the submission relating to applicants’
persistence
with this application, regardless of the alleged knowledge that the
second respondent provided the incorrect bank account
details to the
first respondent.
[14]
Mr Zietsman SC correctly summarised the main issue to be determined,
namely whether the first respondent
made payment of the full
settlement amount in terms of the settlement agreement to the
executor as provided in clause 8 of the
settlement agreement or
to Oxy Trading.
[15]
In terms of clause 7 of the settlement agreement, the first
respondent was obliged to make payment of the
amount of
R15 000 000.00 into the trust account of its attorney,
namely the second respondent who was an attorney at
Bokwa Attorneys
at the time, to be held as security pending the fulfilment of Oxy
Trading’s obligations in terms of the settlement
agreement.
[16]
The settlement amount was only payable by the first respondent’s
attorney into the trust account of
the executor (Mr Motaung) after
Oxy Trading complied with its obligations in terms of the settlement
agreement. Clause 9 of the
settlement agreement expressly provides
that the payment must be made “into the account provided to the
(sic) by the Plaintiff”,
being Oxy Trading.
[17]
I was referred to
Stabilpave
(Pty) Ltd v South African Revenue Service
[1]
where the Supreme Court of Appeal, with reference to the dictum in
Mannesmann
Demag (Pty) Ltd v Romatex Ltd and Another
,
[2]
reaffirmed the position that when a creditor stipulates or requests a
particular mode of payment, the debt will only be discharged
if the
debtor complies with it.
[18]
In terms of the settlement agreement, Oxy Trading expressly nominated
the trust account of Mr Motaung in
which payment of the settlement
amount had to be made. It is clear from the objective evidence that
neither Oxy Trading nor Mr
Motaung nominated the bank account of
Major Issues as the account in which the payment had to be made.
[19]
It is not the first respondent’s case that Oxy Trading or Mr
Motaung provided it or the second respondent
with the bank account
details as recorded in the second respondent’s letter of 15
July 2021, nor is it the first respondent’s
case that the bank
account details provided to the first respondent by the second
respondent were in fact the trust account details
of the executor (Mr
Motaung) as contemplated in clause 8 of the settlement agreement.
[20]
The applicants have clearly established that:
[20.1] The bank
account details provided to the first respondent by the second
respondent was not the trust account of the
executor or the bank
account which was nominated by either Oxy Trading or Mr Motaung.
[20.2] The said
bank account is that of Major Issues, being a close corporation of
which the second respondent was the sole
member of at the time when
payment was made by the first respondent on 16 July 2021 and when the
three separate payments were made
to the executor on 6 and 10 August
2021 referred to
supra
.
[20.3] Oxy Trading,
through its representative, being Mr Motaung, only received payment
in terms of the settlement agreement
in the amount of R10 000
000.00.
[20.4] The second
respondent was neither in terms of the settlement agreement nor in
any other manner authorised to act during
the execution of the
settlement agreement on behalf of Oxy Trading or Mr Motaung.
[20.5] In
Barker
v Probert
,
[3]
the Appellate Division, dealing the with issue of a mandate to
receive payment, held as follows:
“
In considering
whether York Estate was the agent of the defendant for receiving
payment of the purchase price, it is important at
the outset to bear
in mind what the expression "agent of the defendant" means
in the present context. It means no more
than the person authorised
by the defendant to accept payment of the purchase price by the
plaintiff.
It connotes a mandate by which the seller confers
authority on the agent (his mandatary) to represent him in the
acceptance of the
payment of the purchase price, with the
consequence, in law, that payment to the agent is equivalent to
payment to the seller
.
Viewed in this light, the
contract between the parties itself shows prima facie that York
Estate was the agent of the defendant
for receiving the purchase
price. The statement in the heading of the contract that York Estate
was "acting as agents for"
the defendant is inconclusive in
this regard, since it may mean no more than that York Estate was the
estate agent acting for the
seller in procuring the sale, and an
estate agent as such is not without more clothed with authority to
receive the purchase price
on the seller's behalf. But the provisions
of clause 3, quoted earlier, go further and point to York Estate as
being the defendant's
agent for receiving the purchase price. In
clause 3 it is expressly stipulated that all payments made in terms
of it (including,
on the facts here, the payment of the full purchase
price) shall be made to the "agents", being York Estate. It
is clearly
implicit that York Estate is authorised by the defendant
to receive the purchase price, for, were it not so, the purchaser
would
have been obliged to pay it to the defendant.”
[4]
(emphasis added)
[20.6] In applying
Barker supra
it was established by the applicants that neither
Major Issues nor the second respondent was appointed by Oxy Trading
or Mr Motaung
as their agent to receive payment on their behalf in
terms of the settlement agreement.
[21]
With reference to
Baker
supra
,
the Supreme Court of Appeal held in
Minister
of Agriculture and Land Affairs and Another v De Klerk and Others
[5]
as follows:
“
[13]
It is common cause that the full purchase price was duly lodged with
the conveyancer in accordance
with the terms of the deed of sale. The
submission of counsel for the purchaser, however, loses sight of the
question whether payment
of the purchase price to the conveyancer
operated as discharge of the purchaser's obligation to pay the
purchase price. In this
regard I agree with the view expressed by
Botha JA in Baker v Probert, that he has -
'difficulty in
visualising a situation (save possibly for an exceptional case) in
which there could be due performance of the obligation
to pay the
purchase price, by paying it to a third party, unless that third
party was appointed and authorised by the seller to
accept the
payment, thus constituting him his agent for the purpose
'.”
(emphasis added)
[22]
It is not in dispute that the second respondent was the first
respondent’s attorney at the time the
settlement agreement was
concluded and when the various payments were made referred to
supra
.
The extent that the second respondent mislead the first respondent
into making payment of the amount of R15 000 000.00
in an
incorrect bank account and not to the executor in terms of the
provisions of the settlement agreement or to Oxy Trading,
such
misrepresentation does not bind Oxy Trading or constitutes a
misrepresentation on behalf of Mr Motaung or Oxy Trading.
[23]
In determining the application and the evidence presented in the
affidavits, a final order will only be granted
on notice of motion if
the facts, as stated by a respondent, together with the facts alleged
by an applicant, that are admitted
by the respondent, justify such
order.
[6]
[24]
As a general rule, decisions of fact cannot properly be founded on a
consideration of probabilities, unless
the court is satisfied that
there is no real genuine dispute on the facts in question, or that
one party’s allegations are
so far-fetched or so clearly
untenable or so palpably implausible as to warrant their rejection
merely on the papers, or that
viva
voce
evidence would not disturb the balance of probabilities appearing
from the affidavits.
[7]
In
Fakie
NO v CCII Systems (Pty) Ltd
[8]
the Supreme Court held:
“
[56]
Practice in
this regard has become considerably more robust, and rightly so. If
it were otherwise, most of the busy motion courts
in the country
might cease functioning.
But
the limits remain, and however robust a court may be inclined to be,
a respondent's version can be rejected in motion proceedings
only if
it is 'fictitious' or so far-fetched and clearly untenable that
it can confidently be said, on the papers alone, that
it is
demonstrably and clearly unworthy of credence
.”
(emphasis added)
[25]
I am in agreement with the submissions made by Mr Zietsman SC, namely
that the first respondent cannot rely
on the payment which was made
into the bank account of Major Issues as compliance of or as a
discharge of its obligations towards
Oxy Trading in terms of the
settlement agreement.
[26]
The first respondent’s defence lacks merit and the dispute
raised by the first respondent is clearly
untenable. The first
respondent has not complied with its obligations in terms of the
settlement agreement. There should be no
debate regarding the
inherent credibility of the applicants’ factual averments,
supported by the objective evidence, particularly
that the bank
account into which payment was made by the first respondent was not
nominated by Oxy Trading or Mr Motaung.
[27]
Accordingly, based on the common cause facts and the objective
evidence, the application should succeed with
costs.
Costs
of postponement on 1 December 2023
[28]
The application was set down by the applicants to be adjudicated on 1
December 2023. The application was
postponed on 1 December 2023 by
agreement to 15 February 2024, and the costs occasioned as a result
of the postponement stood over
for later adjudication.
[29]
The application for the postponement by the first respondent
premised on the non-availability of the
first respondent’s
counsel. The applicants’ opposition of the application for
postponement was in essence based on
the first respondent’s
overall unpreparedness to proceed with the application. This
unpreparedness was further pointed out
as being the first
respondent’s failure to timeously file its answering affidavit
(13 days late) and its heads of argument.
[30]
The applicants’ counsel, as in the case of the first
respondent, was also not available to deal with
the application.
However, the applicants instructed another counsel timeously to deal
with the application on 1 December 2023.
The first respondent’s
explanation as to the steps it took to obtain the services of another
counsel is vague and insufficient
to conclude that the first
respondent did everything within its means to obtain the services of
another counsel.
[31]
Furthermore to the above, the first respondent was notified as early
as 20 November 2023 about the applicants’
stance, namely not to
consent to the request for postponement. With this knowledge, the
first respondent issued and served the
application for postponement
only on 29 November 2023 (2 days before the application was set down
for adjudication).
[32]
The
more detailed principles governing the grant and refusal of
postponements have been summarised by the Constitutional Court
in
National
Police Service Union and Others v Minister of Safety and Security and
Others
[9]
as follows:
“
The
postponement of a matter set down for hearing on a particular date
cannot be claimed as of right. An applicant for a postponement
seeks
an indulgence from the Court. Such postponement will not be granted
unless this Court is satisfied that it is in the interests
of justice
to do so. In this respect the applicant must show that there is good
cause for the postponement. In order to satisfy
the Court that good
cause does exist, it will be necessary to furnish a full and
satisfactory explanation of the circumstances
that give rise to the
application. Whether a postponement will be granted is therefore in
the discretion of the Court and cannot
be secured by mere agreement
between the parties. In exercising that discretion, this Court will
take into account a number of
factors, including (but not limited
to): whether the application has been timeously made, whether the
explanation given by the
applicant for postponement is full and
satisfactory, whether there is prejudice to any of the parties and
whether the application
is opposed.”
[10]
[33]
In
Myburg Transport v Botha t/a SA Truck Bodies supra
it was
held:
“
Where an the
applicant for a postponement has not made his application timeously,
or is otherwise to blame with respect to the procedure
which he has
followed, but justice nevertheless justifies a postponement in the
particular circumstances of a case, the Court in
its discretion might
allow the postponement but direct the applicant in a suitable case to
pay the wasted costs of the respondent
occasioned to such a
respondent on the scale of attorney I and client. Such an applicant
might even be directed to pay the costs
of his adversary before he is
allowed to proceed with his action or defence in the action, as the
case may be.”
[11]
[34]
The first respondent sought an indulgence from court, and as
correctly submitted by Mr Zietsman SC, the first
respondent should
pay the costs associated with the postponement of the application on
1 December 2023. However, I am not inclined
to order the first
respondent to pay costs associated with the postponement on an
attorney client scale.
[35]
Accordingly I make the following order:
1.
Judgement against the First Respondent for:
1.1.
Payment of R5 000 000.00 (five million rand);
1.2.
Interest on R5 000 000.00 (five million rand) calculated at
the statutory interest rate per annum
a
tempore mora
e,
until date of payment;
1.3.
Costs of the application which includes costs associated with the
postponement of the application on 1 December
2023.
JJ
BUYS, AJ
On
behalf of the Applicant:
Adv.
P.J.J. Zietsman SC
FJ
Senekal Inc
Bloemfontein
On
behalf of the First Respondent:
Adv.
T. Ngubeni
MH
Leshoro Attorneys
Bloemfontein
[1]
2014
(1) SA 350
(SCA) at paras 9 – 10.
[2]
1988
(4) SA 383
(D) at 389F – 390D.
[3]
1985
(3) SA 429
(A) at 439D – G.
[4]
See
also
Agu
v Krige
2019 JDR 0716 (WCC) at para 18 and
Minister
of Agriculture and Land Affairs v De Klerk
2014 (1) SA 212
(SCA) at paras 13 and 14.
[5]
2014
(1) SA 212
(SCA) at para 13.
[6]
Stellenbosch
Farmers’ Winery Ltd v Stellenbosch Winery (Pty) Ltd
1957 (4) SA 234
(C) at 235 and
Plascon
Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634H-I.
[7]
Cape
Town City v South Africa National Roads Agency Ltd
2015 (6) SA 535
(WCC) at 608F-I;
Administrator,
Transvaal v Theletsane
[1990] ZASCA 156
;
1991 (2) SA 192
(A) at 197A-B;
Plascon Evans Paints Ltd v Van Riebeeck
Paints (Pty) Ltd
supra
at
634H-635C;
Room Hire Co (Pty) Ltd v Jeppe Street Mansions
(Pty) Ltd
1949 (3) SA 1155
(T) at 1162 and
National Director
of Public Prosecutions v Zuma
[2009] ZASCA 1
;
2009 (2) SA 277
(SCA) at 290F.
[8]
[2006] ZASCA 52
;
2006
(4) SA 326
(SCA) at para
[56]
. See
Buffalo
Freight Systems (Pty) Ltd v Crestleigh Trading (Pty) Ltd
2011 (1) SA 8
(SCA) at paras 19 – 20 and
Soffiantini
v Mould
1956 (4) SA 150
(E) at 154.
[9]
2000
(4) SA 1110
(CC) at 1112C-F.
[10]
See
also
McCarthy
Retail Ltd v Shortdistance Carriers CC
[2001]
3 All SA 236
(A) at para 28 and
Myburg
Transport v Botha t/a SA Truck Bodies
1991
(3) SA 310
(NmS) at 314F – 315J.
[11]
At
315H – J.