Taylor v Devine (122/82/AV) [1984] ZASCA 7 (2 March 1984)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
1984
>>
[1984] ZASCA 7
|

|

Taylor v Devine (122/82/AV) [1984] ZASCA 7 (2 March 1984)

122/82/AV
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE DIVISION
)
In the matter between:
J D TAYLOR
Appellant
and
D J DEVINE
Respondent
CORAM: Miller, Cillié et Nicholas, JJA
HEARD
: 23 February 1984
DELIVERED
: 2 March 1984
JUDGEMENT
NICHOLAS, JA
This appeal arises out of an action in the Durban magistrates' court
in which Mr DOUGLAS DEVINE as plaintiff
claimed
2
claimed R3 000,00 from Mr JAMES TAYLOR.
DEVINE's claim was based on a dishonoured cheque for R3 000,00 drawn
by TAYLOR on the Natal Bank branch of Barclay's Bank in Durban.
It
was dated 12 April 1979 and was payable to cash or bearer.
Although the defendant's plea put in issue the allegations in the
summons that DEVINE was the legal holder of the cheque and that
it
had been duly presented for payment, these matters were no longer in
issue at the end of the trial.
The substantive defence pleaded was as follows:
"5
3
"5 On the 12th of April 1979 an oral Agreement was entered into
between the Defendant and SPENCER JAMES BERRANGE. Material terms
of
the Agreement were:
The said BERRANGE would give the Defendant an option to purchase a
further 25% share in a vessel known as 'Yellow Fin';
The option was until the 1st of June 1979 and was to be exercised on
that date;
In consideration of the said 25% share in the vessel, the Defendant
would pay the said BERRANGE an amount of R3 000,00;
Payment would be effected by means of a cheque, currently dated, for
an amount of R3 000,00;
The cheque would not be presented
for payment before the 1st of June 1979.
6
(a) The said BERRANGE was represented
by the Plaintiff;
(b) The Defendant acted personally.
7. On
4.
7.
On the 8th of May 1979 the Defendant advised the said BERRANGE that
he did not intend exercising the option.
8.
The Defendant accordingly:
Denies that he received any value for the said cheque and that he
was therefore not liable as against the said BERRANGE;
Inasmuch as the Plaintiff was in privity with the said BERRANGE and
had knowledge of the aforesaid Agreement, he was not a holder
in due
course and is not entitled to enforce payment as against the
Defendant."
As will appear, these allegations differed materially
from what was stated by TAYLOR in his evidence at the trial.
From
5
From this it appeared that his defences were that
The cheque was, to the knowledge of DEVINE, issued by TAYLOR to
BERRANGE, on the condition that it should not be presented until
1
June 1979, and that it would not be payable unless TAYLOR exercised
a certain option granted to him by BERRANGE;
(i) TAYLOR did not receive value for the cheque.
(ii) DEVINE did not give value for the cheque and hence was not a
holder in due course.
It was accepted that the onus of proving these defences rested on
TAYLOR.
Although the magistrate did not accept TAYLOR'S
version
6
version, he found "against plaintiff on his version alone",
and
dismissed DEVINE's claim with costs.
On
appeal
to the Natal Provincial Division, the court held in the judge­ment
of MILNE D J P "that the magistrate should plainly not
have
found and indeed, it appears did not find, that the defendant had
discharged the onus." The magistrate's judgement was
accordingly
set aside and there was substituted therefor judgement for the
plaintiff in the sum of R3 000,00 and costs.
TAYLOR now appeals to this court, leave having been granted by the
court a
quo
.
The main witnesses at the trial were DEVINE and
TAYLOR.
BERRANGE
also gave evidence on behalf of
TAYLOR
7
TAYLOR.
Neither in this court
nor in the court a
quo
did TAYLOR'S counsel contend that BERRANGE was a satisfactory
witness, whose evidence should be believed. The impression gained by
MILNE D J P from a reading of his evidence was that he was a wholly
unsatisfactory witness, and that his evidence was contradictory,
improbable and in some instances manifestly false. With that
charac­terization I entirely agree, and I shall not again refer
to BERRANGE's evidence.
Both DEVINE and TAYLOR were cross-examined at considerable, one might
say inordinate length. Neither was a satisfactory witness.
There were
serious criticisms
of
8
of the evidence of DEVINE, and I respectfully agree with MILNE D J P
that TAYLOR was evasive and unreliable and frequently contradicted
himself.
Nevertheless, at the end of the trial a great deal of the events of
12 April 1979 had become common cause.
On that date BERRANGE was in possession of three cheques, each for R1
000,00, which had been drawn in his favour by TAYLOR. They
were dated
respectively 1 May, 1 June and 1 July 1979. During the late afternoon
BERRANGE visited DEVINE at his house in Durban North
and asked him to
discount the cheques. DEVINE told him that he was not prepared to do
so but that if TAYLOR would
replace
9
replace the cheques with a single cash cheque for R3 000,00 currently
dated, DEVINE would discount it.
DEVINE then telephoned TAYLOR, who also lived in Durban North. He
told him that he was prepared to assist BERRANGE by making advances
to him, provided that TAYLOR made out a single cash cheque, currently
dated, for R3 000,00. TAYLOR realised that DEVINE wanted such
a
cheque as security for moneys to be advanced by him. TAYLOR asked for
time to consider the matter. About an hour later he informed
DEVINE
that he was prepared to do what had been asked of him. (As will
appear, TAYLOR
said
10
said that his agreement was subject to certain conditions, which was
denied by DEVINE.)
Thereafter TAYLOR issued to BERRANGE the cheque which was the
subject-matter of the action, in replacement of the 3 post-dated
cheques,
and BERRANGE handed it to DEVINE.
On the morning of Saturday 14 April 1979 (the day after Good Friday),
DEVINE deposited the cheque to the credit of his account with
the
Standard Bank, and it was subsequently dishonoured. Later that day
DEVINE, together with BERRANGE, proceeded overseas.
It is against this background that TAYLOR'S evidence is to be viewed.
In summary it was the following.
During
11
During February 1979 BERRANGE, TAYLOR and one HEDIN concluded an
agreement relating to a game-fishing boat named "Yellow Fin",
which was owned by BERRANGE. Although the agreement was reduced to
writing, the do­cument was never signed. In terms of the
agreement,
TAYLOR and HEDIN each purchased from BERRANGE a
quarter-share in the boat for an amount of R3 000,00. Against Rl
000,00 of the purchase
price there was to be set off a debt for that
amount owing to TAYLOR by BERRANGE. The balance of R5 000,00 was
payable by means of
5 cheques, each for R1 000,00, payable
respectively on 1 March, 1 April, 1 May, 1 June and 1 July 1979.
These cheques
were
12
were furnished to BERRANGE by HEDIN, it having been agreed between
HEDIN and TAYLOR that TAYLOR would reimburse HEDIN with the sum
of
R500,00 monthly as each cheque fell due.
At the end of February 1979, HEDIN withdrew from the transaction and
stopped payment of all 5 cheques. Three of the cheques (namely
those
dated 1 May, 1 June and 1 July 1979) were then handed by BERRANGE to
TAYLOR, who furnished BERRANGE with the 3 post-dated cheques
drawn by
him which were also dated 1 May, 1 June and 1 July respectively.
BERRANGE granted to TAYLOR an option to purchase the quarter-share in
the boat which had been relinquished by HEDIN. The option was
exercisable by TAYLOR on or
before
13
before 1 June 1979 and it was a condition of the issue by TAYLOR of
the 3 post-dated cheques that they would not be negotiated or
presented for payment unless and until the option was exercised. If
TAYLOR did not exercise the option, the cheques would be returned
to
him.
In regard to the discussion on 12 April 1979, TAYLOR said that DEVINE
told him that he would help BERRANGE by advancing money to
him if
TAYLOR would make out a cash cheque, currently dated, to replace the
three post-dated cheques. TAYLOR explained to DEVINE
that these
cheques "were not operative because I had not exercised my
option to purchase further shares in the Yellow Pin."
When
14
When DEVINE telephoned him later, TAYLOR stated
in his evidence,
"I said to him I don't mind doing it but I would lay down
certain conditions. The conditions were that should I not exercise
my
option and if anyone was prejudiced by me not taking my option,
that's their own affair. Secondly that the cheque would not be
presented until the 1st June by which time I would have decided to
exercise my option."
To these conditions DEVINE agreed.
BERRANGE then accompanied TAYLOR to TAYLOR'S factory at Umbilo,
where BERRANGE gave him the three post­dated cheques and TAYLOR
in return gave BERRANGE the R3 000,00 cheque, reiterating that it
should not be presented before 1 June 1979 and then only if the
option had been exercised.
The
15
The fact that DEVINE's evidence was subject to criticism does not of
course mean that TAYOR's evidence should have been accepted.
If the
story told by TAYLOR was so vague and contradictory, or so improbable
that he could not be said to have discharged the onus
which rested
upon him, then judgement was rightly granted in favour of DEVINE.
TAYLOR'S counsel submitted that it must be accep­ted that the
three post-dated cheques were given for the reason advanced by
TAYLOR, namely, in contemplation of the exercise of the option to
purchase the remaining 25% in the "Yellow Fin". I do
not
agree. That was only one of the two explanations which he gave for
the issue of the
post-dated
16
post-dated cheques. The other was that they were
issued in
replacement of 3 of the 5 cheques furnished by
HEDIN.
The
following is an extract from the cross-
examination of TAYLOR:
"Why were the post-dated cheques issued by Headon in favour of
Berrange given to you? -- Because Mr Berrange had en­dorsed
the
back of them if my memory serves me correctly and I was not go­ing
to issue another lot of post-dated cheques while he still
had
post-dated cheques, so once I knew that Mr Headon had cancelled -
stopped payment of those cheques, I said 'You give me Mr Headon's
cheques back', I mean Andrew Headon is a friend of mine, 'you give me
his cheques back before I will issue you with 3 cheques of
the same
months.'"
That is probably the true reason why TAYLOR gave
BERRANGE
17
BERRANGE the post-dated cheques. It would explain the dates of the
cheques, which were the dates of the last 3 of the cheques given
by
HEDIN, whereas there was no explana­tion why,if they were given
in view of the alleged option, which was exercisable on 1
June, the
date of the first of the cheques should have been 1 May. HEDIN's
cheques had been furnished in terms of a provision in
the agreement
of sale, in which the purchasers (TAYLOR and HEDIN) acknowledged that
the seller (BERRANGE) was entitled to discount
such cheques to third
parties prior to the due date. Liability under those cheques was not
subject to any condi­tion. They were
furnished in part in respect
of TAYLOR'S
liability
18
liability under the contract of sale.
It is in the highest degree unlikely in these circumstances that
BERRANGE would have agreed to surrender these 3 cheques, to be
replaced
by 3 cheques in respect of which liability was entirely
dependent on the exercise of an option by TAYLOR to purchase a
further quarter
share in "Yellow Pin".
Nor is the story at all probable that the 3 cheques were issued in
contemplation of the exercise by TAYLOR of the alleged option.
Such issue would have been a futile exercise. It could have been of
no benefit to BERRANGE for him to
hold
19
hold the cheques subject to the alleged conditions, because
unless
he breached the alleged agreement by negotiating
them, they were
valueless pieces of paper.
And
TAYLOR ran the risk, to no conceivable purpose, that BERRANGE might
negotiate the cheques to a holder in due course.
There are other circumstances which make TAYLOR'S story: improbable.
Asked to explain why the cheque was dated 12
April if it was not to be presented until 1 June, TAYLOR
said -
"Mr Devine suggested to me that if I made it out a
current-dated cheque,
should
20
should I exercise my option and they were overseas and/or if I had to
die the cheque would not have to go into my Estate, they could
go and
cash the cheque if I exercised my option."
In his judgement, MILNE D J P rightly decribed this as
"manifest nonsense".
Under cross-examination TAYLOR said repeatedly
that he did not know in what way DEVINE was to assist
BERRANGE; that he did not know how the R3 000,00 cash
cheque would have enabled DEVINE to assist BERRANGE
financially; and that DEVINE did not mention that he was
contemplating giving BERRANGE an advance. It was
only when
TAYLOR was faced with a statement made by him
to
21
to the police that he agreed that he knew that DEVINE was going to
"forward" money to BERRANGE and that DEVINE "would
obviously take (the cheque) as security from BERRANGE if he was
forwarding him any money."
The reason for TAYLOR'S reluctance to make this concession earlier
is, 1 think, plain - he knew that it was destructive of his story
about the conditions attached to the issue of the cheque. Plainly, on
that story, the cheque could afford no security at all - it
was a
value­less piece of paper. The furnishing of the cheque would
have been another exercise in futility, in which it was highly
improbable that either TAYLOR or DEVINE would
have
22
have engaged.
Moreover, the circumstances attending the issue of the cheque for R3
000,00 make TAYLOR'S story improbable. The discussion took place
on
the evening before the Easter week-end, when TAYLOR was at his home
in Durban North. And yet, TAYLOR would have had the court
believe
that, in order to issue a cheque which was not to be presented until
1 June 1979 he left his house on 12 April and went to
his factory.
TAYLOR'S counsel sought to derive support for TAYLOR'S story from the
contents of two letters which he said he had written to BERRANGE
on
10 May and 23 May 1979
respectively
23
respectively.
Since TAYLOR was a witness in the proceedings, the statements
contained in those letters were, in terms of s. 34(1) of the
Evidence
Act
, admissible as evidence of the facts stated therein. They
were, however, extrajudicial statements which were entitled to no
greater
weight than the evidence given by TAYLOR in court.
In my view, therefore, MILNE D J P was right in holding that TAYLOR
did not discharge the onus of proving the defence set out in
(a)
above.
In regard to the defence set out in (b), I do not think that TAYLOR
showed on a balance of probability
that
24
that he did not receive value for the R3 000,00 cheque.
He
admittedly gave that cheque in return for the 3 post­
dated
cheques in favour of BERRANGE.
On
the more
probable of his two versions those cheques had been
issued
in replacement of cheques drawn by HEDIN.
I am concious of the fact that there are in this case questions to
which there are no satisfactory answers. For example, why should
BERRANGE have given the R3 000,00 cheque as security for advances to
be made when he could (but for the alleged conditions) have
cashed
the cheque himself? Why did the plaintiff have to come into the
transaction at all? Why did TAYLOR issue post-dated
cheques
25
cheques totalling R3 000,00 when he was responsible to HEDIN only for
R2 000,00? I do not think, however, that such questions affect
the
conclusion that TAYLOR did not discharge the onus. They suggest
rather (and that was the impression formed by MILNE D J P) that
the
whole truth was not revealed in the evidence. The appeal is dismissed
with costs.
H C NICHOLAS J A
Miller, JA ) Cillié , JA ) Concur