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2012
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[2012] ZAKZDHC 35
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Foil Laminators CC v Pitoo Investments CC and Another (11939/11) [2012] ZAKZDHC 35 (12 June 2012)
In
the KwaZulu-Natal High Court, Durban
Republic
of South Africa
Case
No : 11939/11
In
the matter between :
Foil
Laminators CC
…............................................................................................
Plaintiff
and
Pitoo
Investments CC
…...........................................................................
First
Defendant
Vinay
Nunthkumar
…...........................................................................
Second
Defendant
Judgment
Lopes J
[1] The plaintiff in this matter sues
for provisional sentence in the sum of R304 601,33, together with
interest thereon calculated
at the rate of 15,5% per annum from due
date to date of final payment, and costs on the scale as between
attorney and client.
[2] The plaintiff’s cause of
action is an acknowledgment of debt completed by the second
defendant, both as duly authorised
representative of the first
defendant, and in his personal capacity.
[3] The acknowledgment of debt has
clearly not been correctly completed. The introduction to the
acknowledgment reads :-
‘
I the
undersigned, Mr Vinay Nunthkumar
...
do hereby declare myself in my
personal capacity and jointly Pitoo Investments CC to be :
1. Indebted to in the amount of
R572
601,33
...
3. in the event of any breach of any
of the terms hereof, and Foil Laminators C.C. instituting and action
for recover in term hereof,
I undertake to pay such legal costs as is
incurred by Foil Laminators C.C on an Attorney and Client scale.
...
5. all payments shall be made to the
said Foil Laminators C.C,
36 Rana Road, Isipingo Rail
.
6. In the event of my failing to make
payment promptly on due date, Foil Laminators C.C has my consent to
take judgment against
myself or the C.C, without notice to either
myself or the C.C for the outstanding amount. I further accept that
in such circumstances
I shall be liable for the payment of all legal
fees on the attorney and client scale of costs ...’
(The above is reproduced exactly as it
appears in the acknowledgment of debt.)
[4] Annexed to the provisional
sentence summons, and referred to in the body of the summons, is a
demand for payment date the 6
th
August 2009. That demand
for payment records that the first defendant has not met its
obligations to the plaintiff in respect of
a credit application form
which was signed on the 8
th
February 2005 and sets out the
amount for which it is indebted to the plaintiff.
[5] The letter of demand contains the
threat that unless payment is made within ten business days, the
plaintiff would approach
the court to enforce the agreement. A
similar letter was sent to the second defendant on the same day, but
refers in addition to
a suretyship agreement signed by the second
defendant.
[6] The defendants have opposed the
grant of provisional sentence and raise the following defence :-
(a) that a representative of the
defendants communicated to the plaintiff a payment plan which was
rejected by them. The rejection
letter is annexed to the defendants’
opposing affidavit marked ‘A’. The second defendant
submits that the acknowledgment
of debt forming the basis of the
plaintiff’s provisional sentence application was premised on
the payment plan, and ‘accordingly
the acknowledgment of debt
is rejected’.
In my view this does not disclose a
defence to the plaintiff’s action. The demand was made on the
6
th
August 2009 and the rejection of the defendants’
payment plan was made on the 1
st
September 2009. The fact
that a debtor may propose an alternative payment plan of action to a
creditor, and the creditor rejects
that proposal, does not constitute
a defence to the payment of a debt previously incurred. Although the
letter of demand does not
refer to the acknowledgment of debt, it is
clear from the defendant’s answering affidavit that it accepts
that the same debt
is referred to, the acknowledgment of debt clearly
having been a form of security taken by the plaintiff;
(b) The acknowledgment of debt is
flawed in that :-
(i) it does not state to whom the
defendants’ are indebted;
(ii) it does not state when the
payments are to be made.
[7] On a reasonable interpretation of
the acknowledgment of debt, it is clear that the first of these
additional defences must fail.
Although the wording of paragraph 1 to
the acknowledgment of debt – ‘indebted to in the amount
of
R572 601,33
’ clearly omitted to state the identity of
the creditor, its identity is obvious from a further reading of the
document. This
is clearly implied in paragraph 3, and in paragraphs 5
and 6 of the acknowledgment of debt. In all the circumstances I find
that
this defence has no merit as the creditor is clearly the
plaintiff.
[8] With regard to the fact that the
acknowledgment of debt does not set out when the payments are to be
made, in
Smith v Yeoman
1945 NPD 402
, Selke J considered a
claim for provisional sentence where the document relied upon did not
stipulate a date by which repayment
had to be made. At page 405 he
stated:-
‘
Now here the
action is upon a document signed by the defendant, acknowledging that
he has received from the plaintiff the loan of
a definite amount of
money, and it goes on irrevocably to cede certain insurance policies
as security for the capital amount of
that loan and for the interest
thereon. The use of the expression “monies lent” seems to
me
prima
facie
to import an obligation to repay, and thus an indebtedness pending
such repayment. It is true that the document does not specify
any
date for repayment, but I understood counsel to be agreed that the
law is that where a loan is made without any express stipulation
as
to the date upon which it is to be repaid, it normally becomes
repayable after reasonable notice to repay. That I believe to
be a
correct statement of the law. The summons recites that notice has
been given, and as I remarked previously, that fact is not
disputed
in the defendant’s affidavit of opposition.’
[9] In my view the facts of this case
are sufficiently on all fours with
Smith
, save that in this
case the expression used is ‘indebted to’, rather than
‘monies lent’. This case is in
my view an
a fortiori
case.
[10] In
Jammine and another v Emile
1951 (4) SA 460
(TPD) the plaintiff issued summons for provisional
sentence on an acknowledgment of debt signed by the defendant, and no
date for
repayment was stipulated. It was suggested as a defence that
the provisional sentence summons should have contained an allegation
that reasonable notice had been given to the defendant calling on him
to pay the amount in the acknowledgment of debt. Referring
to the
dicta of Selke J in
Smith
, Neser J stated at page 463 D - F:-
‘
I think it
is clear from the reasoning in the judgment that the learned Judge
was of opinion that had there been no allegation in
the summons that
a demand for payment had been made, plaintiff would have been
non-suited. With deference to the learned Judge,
I do not agree with
that opinion. In
Ridley
v Marais
1939 A.D. 5
, plaintiff had issued summons against defendant for
payment of the sum of £270. In his declaration plaintiff
alleged that
defendant had admitted liability to him in the sum of
£270 which he had not paid notwithstanding the fact that a
reasonable
time had elapsed since the admission of liability.’
Referring to the reasoning of the
judgment of Watermeyer JA who heard the
Ridley
matter, Neser J
continued at 364 B - D :-
‘
...
plaintiffs in the present case had a cause of action against
defendant even if no demand for payment had been made. Plaintiffs
could thus have sued in an illiquid summons without making any prior
demand. Had they done so defendant could have tendered payment
of the
sum claimed within a reasonable time and could successfully have
contended that no order for costs should be granted against
him. But
there would be no doubt that plaintiffs would have been entitled to
judgment.’
[11] In
Standard Bank of SA Ltd v
Slomowitz
1957 (3) SA 207
(TPD) de Wet J considered a document
signed by the defendant and addressed to the manager of the plaintiff
bank, stating that he
had examined the statement relevant to his
current account and that he certified the balance due to the bank as
at a certain date.
The plaintiff bank applied for provisional
sentence which was refused because it was held that the document
could not be said to
imply an undertaking to pay the amounts due on
demand. As extrinsic evidence would be necessary to establish the
terms of the undertaking
to repay, provisional sentence was refused.
[12] In
Standard Bank
the
learned judge was of the view that the admitted circumstances which
prevailed when the documents sued upon were signed were
such that the
documents could not be said to imply an undertaking to pay the amount
due on demand. The facts in
Standard Bank
appear to be
distinguishable from the facts in the present case. This is because
extrinsic evidence was required to establish that
the debt was due in
Standard Bank
. I do not have to, and have not considered
extrinsic evidence here either. However, although both cases envisage
that payment will
be made in due course, because of the long lapse of
time in the present case, it is reasonable to accept that the
plaintiff could
demand payment.
[13] Accordingly, the second of the
further defences, that the acknowledgment of debt does not set out
when the payments are to
be made, does not render the acknowledgment
of debt ineffective. I say this because it is clear from the
acknowledgment of debt
that a payment plan was contemplated between
the parties. It is true that that payment plan is not set out in the
document. Instead
it appears from annexures attached to the
plaintiff’s replying affidavit. In view of the fact that those
documents were adduced
only in reply, I take no cognisance of them,
both for the reason that the plaintiff cannot make out its case in
reply and also
because the annexures constitute evidence extraneous
to the acknowledgment of debt.
[14] What, however, is clear, is that
the defendants have breached the undertaking which they made. This is
because :-
the provisional sentence summons
refers to demands having been made for payment by the defendants,
which demands are dated the
6
th
August 2009;
in any event, there is a presumption
that the debt would have been repaid within a reasonable period of
time. The acknowledgment
of debt was signed on the 29
th
April 2009 and the provisional sentence summons issued on the 27
th
October 2011. In my view that is a lapse of sufficient time to
constitute a reasonable period within which the debt should have
been paid; and
in the defendants’ opposing
affidavit it makes no suggestion either that the amount has been
paid, or that the amount was
payable at a date later than the
institution of the provisional sentence summons, or that the debt is
only payable after the
date of institution of the provisional
sentence summons.
[15] In those circumstances it can
hardly lie in the mouths of the defendants to suggest that the
acknowledgment of debt is so defective
that it does not constitute a
proper cause of action against them.
[16] In addition, it is evident from
the provisional sentence summons that a payment was made against the
original acknowledgment
of debt in the sum of R268 000. This is not
denied by the defendants in their opposing affidavit. Clearly the
amount had become
due, failing which the defendants were unlikely to
have paid the outstanding amount.
[17] In all the circumstances I am
satisfied that provisional sentence should be granted and I
accordingly make the following order
:-
‘
Provisional
sentence is granted in favour of the plaintiff against the defendants
jointly for :-
payment of the sum of R304 601,33;
interest thereon calculated at the
rate of 15.5% per annum from the date of the service of the
provisional sentence summons,
the 14
th
November 2011 to
date of payment;
costs of suit calculated on the
basis as between attorney and client.’
Date of hearing : 7
th
June
2012
Date of judgment : 12
th
June 2012
Counsel for the Plaintiff : G Thomas
(instructed by Morris Fuller Walden Williams)
Counsel for the Defendant : M Naidoo
(instructed by Kushen Sahadaw Attorneys)