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[2018] ZAKZDHC 27
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Reddy t/a Logprop Realty v Govender and Another (5791/2017) [2018] ZAKZDHC 27 (10 May 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
Case
No: 5791/2017
In
the matter between:
Logan
Loganathan Reddy t/a Logprop
Realty Plaintiff
and
Lingappen
Chinsamy
Govender First
Defendant
Sivagami
Govender Second
Defendant
Judgment
Lopes
J:
[1]
On the 27
th
June 2017, the plaintiff issued a provisional sentence summons
against the defendants claiming payment of the sum of R230 000
in terms of an acknowledgement of debt, signed at Chatsworth by the
defendants on the 5
th
August 2014.
[2]
The acknowledgement of debt contains an unconditional undertaking to
pay the sum of R230 000 to the plaintiff by the end
of December
2014. The matters giving rise to these proceedings, may be
summarised as follows:
(a) The first defendant
was a member of a close corporation, Magally Engineering CC (‘Magally
Engineering’). The second
defendant is his wife.
(b) Magally Engineering
was in financial difficulty and the defendants were referred to the
plaintiff on the basis that he was an
expert in insolvency matters
who could give them advice.
(c) The plaintiff was an
insolvency practitioner who traded as Logprop Realty.
(d) The plaintiff advised
the defendants that they should apply for the voluntary liquidation
of Magally Engineering. The defendants
allege that his fees for doing
so was to be R480 000. The plaintiff avers that the fees
was to be only R230 000,
which was to be paid by the end of
December 2014.
(e) The defendants allege
that they paid him R250 000 in cash on the 31
st
July
2014. They also admit having signed the acknowledgement of debt for
the sum of R230 000 on the 5
th
August 2014.
(f) The plaintiff denies
having received the R250 000 in cash. The allegation in
the provisional sentence opposing affidavit
is that the defendants
paid the sum of R250 000 on the 31
st
July 2014.
In separate proceedings the defendants allege that they paid R100 000
on the 30
th
July 2014 and R150 000 on the 31
st
July 2014.
(g) Finding themselves
unhappy with the plaintiff’s services, and his referral of
their legal problems to his daughter, an
attorney of this court, the
defendants engaged their present attorney, and laid a complaint
against the plaintiff’s daughter
with the Law Society.
(h) On the 24
th
July 2017 the defendants caused an action to be instituted against
the plaintiff out of the Regional Court in Durban, for payment
of the
R250 000. That action is defended and proceeding in the Regional
Court.
[3]
Mr
Crots
, who appeared for the defendants, raised the
following defences:
(a) On the basis of the
judgment in
Twee Jonge Gezellen (Pty) Ltd & Another v Land and
Agricultural Development Bank of South Africa t/a The Land Bank, &
Another
2011 (3) SA 1
(CC), provisional sentence procedures will
only be constitutionally compliant if courts have a discretion to
refuse provisional
sentence where the defendant is able to
demonstrate the following:
(i) an inability to
satisfy the judgment debt;
(ii) that the prospects
of success in the main case on the papers, are evenly balanced; and
(iii) there is a
reasonable prospect that oral evidence may tip the balance of
prospective success, in favour of the defendant.
(b) That the plaintiff is
an insolvency practitioner, who charges fees for the professional
services which he renders. He is not,
however, an admitted attorney,
and, accordingly, in terms of s 41 (1) of the Attorneys Act, 1979 he
is not entitled to practise
as a practitioner for his own account
unless he is in possession of a fidelity fund certificate.
Section 41 (2) of the Act,
provides that any practitioner who does
so, shall not be entitled to any fee. Accordingly the
plaintiff’s claim is
bad in law, or excipiable.
(c) The document sued on
is not a liquid document because the plaintiff admits that it wrongly
recorded the cause of indebtedness
as ‘monies loaned and
advanced’. However, an admission is made in the provisional
sentence summons that the underlying
cause of action was in respect
of services rendered.
(d) As the defendants
have brought their defence within the parameters set out in
Twee
Jonge Gezellen
,
the liquid document relied on in the provisional sentence summons
should be tested during the pending Regional Court trial instituted
by the defendants against the plaintiff. In those circumstances
the provisional sentence action should be transferred to
the Regional
Court and the plaintiff’s version tested by way of
cross-examination during that trial.
[4]
Mr
Crots
described
the
Twee
Jonge Gezellen
judgment as a watershed decision in provisional sentence
proceedings. He submitted that
Rich
& Others v Lagerwey
1974 (4) SA 748
(A), which is authority for the proposition that oral
evidence may only be heard relating to the signature of the defendant
or
his agent, was of limited application in so far as it is suggested
that a court had no inherent power to order
viva
voce
evidence
.
[5]
Mr
Crots
conceded that the defendants were unable to satisfy the three
criteria set out in
Twee
Jonge Gezellen
,
as they had not demonstrated an inability to satisfy the
judgment debt. Mr
Crots
conceded
that nowhere in the opposing affidavits had the defendants alleged
that they were unable to satisfy the debt owed in terms
of the
acknowledgement of debt. However, Mr
Crots
submitted that
Twee
Jonge Gezellen
is not authority for the proposition that a court has no discretion
if a defendant is unable to satisfy any one of the three requirements
set out above. He submitted that the ability of the defendant
to pay the amount sued for is not a
sine
qua non
for the court being able to exercise its discretion to refuse
provisional sentence.
[6]
I cannot agree with this suggestion by Mr
Crots.
In my
view the constitutional court has laid down the circumstances in
which a court will exercise its discretion to refuse provisional
sentence. In the present matter, the ability of the defendants
to pay the claim is somewhat complicated by the fact that
there is an
admission in the papers that an associated entity, Magally Properties
CC owned the property on which Magally Engineering
operated. The
property was sold by private treaty, on the 8
th
April 2016, for the sum of R5 757 000. In addition
certain movable goods and equipment of Magally Engineering were
sold
for R68 000. Although there were mortgage bonds registered
against the property to the extent of R4 685 216.97,
a
considerable balance remained. No explanation was given by the
defendants as to what happened to those monies.
[7]
Moreover, I am by no means satisfied that the defendants are able to
demonstrate the second and third requirements of
Twee
Jonge Gezellen
.
There are contradictions in the defendants’ version relating to
the time and place of the alleged payment of R250 000.
In
addition, the correspondence exchanged between the parties appears to
indicate that the defendants freely acknowledged their
indebtedness
to the plaintiff, as recorded in the acknowledgement of debt. Had
they been threatened into signing the acknowledgement
of debt as they
allege, the attitude adopted by them in the correspondence is
inexplicable. Given their concern with the amounts
charged by the
plaintiff for his services, they would no doubt have complained about
that as well, if they had already advanced
the sum of R250 000
to the plaintiff. In those circumstances I do not view the
probabilities of the defendants succeeding
in an opposed hearing as
being evenly balanced. Those probabilities favour the version
of the plaintiff.
[8]
Given the improbabilities in the defendants’ version, as well
as the contents of the correspondence sent by them to the
plaintiff,
freely acknowledging their indebtedness to him in respect of the
acknowledgment of debt, I do not believe that oral
evidence would tip
the balance of any prospect of success in favour of the defendants.
In addition, it is clear from the
answering affidavits of the
defendants, that very soon after becoming acquainted with the
plaintiff, they realised that he was
simply there for what he could
get out of them, and not to assist them as he had undertaken to do.
To be writing letters
a year later openly acknowledging their
indebtedness to him in respect of the acknowledgment of debt is
contradictory in the extreme.
In those circumstances any
reliance on the
Twee
Jonge Gezellen
judgment cannot assist the defendants.
[9]
With regard to the fact that the plaintiff is not an attorney of this
court, he does not profess to be so. He claims only
to be an
insolvency practitioner, and clearly does not fall within the
definition of a ‘practitioner’ as defined in
s 1 of the
Attorneys Act, 1979. This defence accordingly has no merit.
[10]
The suggestion that the acknowledgment of debt is not a liquid
document, because the underlying cause of action is incorrectly
described therein, cannot assist the defendants. The full court of
this division in
Jenkins
v De Jager
1993 (4) SA 534
(N) decided that an incorrect description of the
underlying causa in an acknowledgment of debt did not affect the
liquidity of
the document. In that case the incorrect
description was only raised in reply. In the present matter it was
raised in the
provisional sentence summons itself. In any
event, the parties are
ad
idem
as
to the underlying cause of action. In those circumstances there can
be no prejudice whatsoever occasioned to the defendants
by the
incorrect description in the acknowledgement of debt.
[11]
Mr
Crots
but faintly argued that there were different trading names used by
the plaintiff, and that this created confusion and uncertainty
as to
the identity of the plaintiff, and in those circumstances provisional
sentence should not be granted. In this regard
a fourth set of
affidavits was produced by the defendants dealing with the fact that
the plaintiff is a member of a CC which trades
under a name which is
similar to, but not the same as, ‘Logprop Realty’. In my
view there is no confusion whatsoever
on the part of the plaintiff,
as to the alias under which he traded.
[12]
Finally, Mr
Crots
submitted that I should exercise my discretion to disallow
provisional sentence because the matter was already before the
Regional
Court and it was undesirable that two courts hear the same
underlying cause of action. As pointed out above, the Regional Court
summons was issued after the provisional sentence proceedings were
instituted in this Court. If granted, provisional sentence does
not
prevent the defendants from defending the action. All they are
required to do is put up security for the debt, for which they
may
demand counter-security from the plaintiff. They will then be
able to enter the principal case and deal with the allegations.
As the defendants have made no indication that they are unable to pay
security to enable them to enter the principal case, there
is no
basis upon which I can exercise my discretion to refuse provisional
sentence.
[13]
In all the circumstances I grant provisional sentence in favour
of the plaintiff against the defendants, jointly and
severally, the
one paying the other to be absolved for the following amounts:
(a) Payment of the sum of
R230 000.
(b) Interest thereon
calculated at the rate 10.5 percent per annum from the 27
th
June 2017 to date of payment;
(c) Costs of suit,
calculated on the scale as between attorney and client, such costs to
include those consequent upon the supplementary
affidavits of the
defendants and the plaintiff’s opposition thereto, including
the costs reserved on the 8
th
August 2017.
____________________
Lopes
J
Dates
of hearing: 24
th
April 2018.
Date
of Judgment: 10
th
May 2018.
Counsel
for the Applicant: Mr K
Naidu
(instructed by I.C. Meer,
Kallideen & Company).
Counsel
for the Respondent: Mr E
Crots
(instructed by Mooney Ford Attorneys).