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[2009] ZAGPPHC 22
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Standard Bank of South Africa Limited v Local Municipality of Madibeng In re: Local Municipality of Madibeng v Oracleprops 17 (Pty) [2009] ZAGPPHC 22 (3 April 2009)
IN THE HIGH COURT OF SOUTH AFRICA
(
NORTH GAUTENG HIGH COURT, PRETORIA
)
CASE
NO: 6055/2007
DATE:
3/4/2009
NOT
REPORTABLE
IN
THE MATTER BETWEEN
THE STANDARD BANK OF
SOUTH AFRICA LIMITED APPLICANT
(Registration
Number 1962/000738/06)
AND
THE
LOCAL MUNICIPALITY OF MADIBENG RESPONDENT
IN
RE
:
THE
LOCAL MUNICIPALITY OF MADIBENG APPLICANT
AND
ORACLEPROPS
17 (PTY) LTD 1
ST
RESPONDENT
THE
DAM DEVELOPMENT CC 2
ND
RESPONDENT
THE
STANDARD BANK OF SOUTH AFRICA 3
RD
RESPONDENT
REGISTRAR
OF DEEDS, PRETORIA 4
TH
RESPONDENT
NEDBANK
LIMITED 5
TH
RESPONDENT
JUDGMENT
RAULINGA,
J
The applicant, the Standard Bank of South Africa Ltd, with its
principal place of business at 1
st
Floor, 30 Baker
Street, corner 0xford Road, Rosebank, Johannesburg Gauteng Province,
launched an application against the respondent,
The Local
Municipality of Madibeng with its principal place of business
situated at Civic Centre, 53 Van Velden Street, Brits,
for an
order in the following terms:
1.1 payment of the sum of R26 478,93;
1.2 payment of interest on the sum of R26 478,96 at the rate of 15.5%
per annum calculated from and including 26 September
2007 to the
date of payment;
1.3 payment of costs of this application on the attorney and own
client scale.
The claim arises from an order of this court per BERTELSMANN, J,
who ordered that the respondent should pay applicant's costs
in the
main application.
While the respondent admits that it was indebted to the applicant
for the payment of the sum of R26 478,93 being an amount
due in
terms of a bill of costs taxed in favour of the applicant in the main
application, the respondent, however, denies that
it has not
fulfilled its obligations to pay applicant the foresaid amount,
because it issued a cheque number 078189 for the sum
of R26 478,93
in favour of the applicant's attorneys of record. The foresaid
amount was debited from the respondent's banking
account. The
respondent therefore discharged its indebtedness to the applicant.
The respondent contends that on forwarding the cheque to the
applicant's attorney it was an implied, alternatively, a tacit term
of the agreement between the parties that the applicant would be paid
by cheque and that the cheque would either be forwarded by
docex or
sent by post to the applicant's attorneys. However, the applicant
avers that at no stage did it ever authorise or request
the
respondent whether expressly or impliedly to send cheques to the
applicant's attorneys by post or docex. Further that this
is a
decision taken by the respondent's attorneys of record acting on
their own and fell and remained with the respondent.
The court is called up to determine whether or not there was an
implied and/or tacit term of agreement between the parties that
payment would be offered by the respondent by transmitting the
cheques by docex and whether the underlying debt has been discharged
when the respondent sent the cheque.
Prior to the hearing of this application the respondent sought
condonation for:
(i) the late filing of the heads of argument as well as
(ii) the filing of the answering affidavit out of time.
The parties were
ad idem
that condonation be granted on
both aspects and that no punitive costs should be awarded.
0n 14 September 2007 the bill of costs submitted by the
applicant in terms of the order granted in the main application was
taxed in the amount of R26 478,93. A copy of the taxed
bill of costs was annexed as "B".
The sequence of events can be gleaned from the correspondence
between the two parties. 0n 18 September 2007 the
applicant's
attorney of record, through its Sandton office, addressed
a letter by facsimile to Langenhoven Pistorius & Partners Inc,
the
respondent's attorneys of record in the main application, in
which the respondent's attorneys of record were-
1. informed of the taxation of the two bills of costs in the main
application, one for the costs of the applicant's attorneys in
the
main application and another for the costs of the applicant's
correspondent attorneys appointed in the main application;
2. requested to revert on when the applicant could expect payment in
the settlement of the two taxed bills of costs. A copy
of the
letter is annexure "C1".
3. 0n 19 September 2007 the respondent's attorneys of record
addressed a response to the applicant's attorneys in a letter
annexure "C2" in which they-
3.1 noted the contents of the letter annexure "C1";
3.2 advised that the letter and the taxed bills of costs had been
forwarded to the respondent for "urgent instructions pertaining
to payment";
3.3 requested the applicant's attorneys to pend its file as the
respondent's attorneys were certain that the respondent would effect
payment in settlement of the taxed bills of costs "expeditiously".
0n 5 0ctober 2007 the respondent's attorneys of record
addressed a letter by facsimile to the applicant's attorneys in which
they-
1. advised that they were provided with cheques by the respondent in
settlement of the two taxed bills of costs;
2. advised that they had proceeded to forward these cheques to the
applicant's attorneys in full and final settlement of the taxed
costs
– annexure "D1" refers.
Further correspondence between the attorneys are annexures "D2"
and "D3".
0n 9 November 2007 the applicant's attorneys of record
addressed a letter by facsimile to the respondent's attorneys in
which the applicant's attorneys-
1. recorded that they had still not received the two cheques that had
been sent by the respondent's attorneys;
2. requested the respondent's attorneys to investigate the matter
surrounding the cheques and if the cheques had not been deposited
arrange for them to be cancelled by way of a "stop payment
instruction";
3. requested that the respondent provide new cheques in settlement of
the taxed bills of costs and that the respondent's attorneys
of
record attend to the deposit of those cheques directly into the
applicant's attorneys trust account, annexure "D4".
0n 13 November 2007 the respondent's attorneys of record
addressed a letter by facsimile to the applicant in which they-
1. attached copies of the letter dated 5 0ctober 2007 addressed
to the applicant's attorneys and the two cheques submitted
in
settlement of the taxed bills of costs;
2. confirmed that the two cheques were drawn by the respondent;
3. confirmed that they had requested the respondent to act as
requested by the applicant's attorneys in the letter of 9 November
2007 – annexure "D5".
0n 23 November 2007 the respondent's attorneys of record
addressed a letter by facsimile to the applicant's attorneys in
which
they (among others)- …
• recorded the deposit of the cheque drawn by the respondent in
favour of the applicant's attorneys on 6 November 2007;
• assumed that the applicant's attorneys had received both
the cheques.
A number of letters between the attorneys for the two parties were
exchanged thereafter and what is important is that the applicant's
attorneys confirmed that they neither received nor deposited the
cheque.
The matter deadlocked on 30 January 2008 when the respondent
addressed a letter to the applicant's attorneys in which it
was
stated that it ascertained that the cheque drawn by the respondent in
favour of the applicant's attorneys was paid on 6 November
2007
after it was deposited into an account apparently held in the name of
the applicant's attorneys at Absa Bank Ltd and that
the other cheque
had not been presented for payment. The respondent then enclosed a
copy of a cheque drawn by the respondent in
favour of the applicant's
attorneys which incorporated an endorsement of payment after it was
presented by a certain Somtaga G
Monako at the Northam branch of
FNB bank although it was marked "not transferable" –
annexure "E1".
The respondent then claimed that it could not accept liability for
the cheque drawn in favour of the applicant's attorney even
if such
cheque was paid to a party not authorised by the applicant's
attorneys.
0n 17 March 2008 the respondent addressed a letter to the
applicant's attorneys
inter alia
informing them that it
had concluded that it was of the opinion that once the cheques were
issued and handed to the respondent's
attorneys of record for
dispatch to the applicant's attorneys in whatever mode or form agreed
upon, expressly or tacitly, payment
had been discharged by the
respondent in full – annexure "E6".
As a prelude to the evaluation of this application I wish to quote a
dictum
of CORBETT, AJA as he then was.
In his dissenting judgment in
McAlpine & Son (Pty) Ltd v
Transvaal Provincial Administration
1974 3 SA 506
(A) at 531E H
and 532A B he expressed the terms implied by law as follows:
"In legal parlance the expression 'implied term' is an ambiguous
one in that it is often used, without discrimination, to
denote two,
possibly three, distinct concepts. In the first place, it is used to
describe an unexpressed provision of the contrast
which the law
imports therein, generally as a matter of course, without reference
to the actual intention of the parties. The
intention of the parties
is not totally ignored. Such a term is not normally implied if it is
in conflict with the express provisions
of the contract. 0n the
other hand, it does not originate in the contractual consensus: it is
imposed by law from without …
In the second place, 'implied term' is used to denote an unexpressed
provision of the contract which derives from the common intention
of
the parties, as inferred by the Court from the express terms of the
contract and the surrounding circumstances. In supplying
such an
implied term the Court, in truth, declares the whole contract entered
into by the parties. In this connection the concept,
common
intention of the parties, comprehends, it would seem, not only the
actual intention but also an imputed intention. In other
words, the
Court implies not only terms which the parties must actually have had
in mind but did not trouble to express but also
terms which the
parties, whether or not they actually had them in mind, would have
expressed if the question or the situation requiring
the term, had
been drawn to their attention."
Having regurgitated the evidence in the form of the letters which
were exchanged between the two parties it is necessary to indicate
that these reflect the versions of both the applicant and the
respondent. There does not seem to be any dispute in form, but an
argument may arise as to interpretation and application.
The common cause issue is that there was money owing to the
applicant by the respondent. The question is whether there was an
agreement reached by the parties that the cheque should be sent by
docex. In their submissions both counsel were
ad idem
in as
far as the principle applied on implied and tacit terms is concerned.
Both parties also agree that there was no express
request to
sanction the transmission of the cheque by docex.
As a point of departure one should observe that although the
respondent refers to the implied agreement by way of transport
through
post or docex, it is clear from the evidence that a docex was
used. The use of counter services by the applicant's attorneys is
reflected on annexure "C1" as Docex 456 Johannesburg
and that of the respondent's attorneys as Docex 3 Brits.
Correspondence between the offices of the parties' attorneys was
transmitted either by fax or e mail. There is no indication
that counter service was used in this regard. This is evidenced from
annexure "C1" and "C2".
It can be accepted that docex is a system of couriers which is used
throughout South Africa by firms of attorneys. The complex
question
to answer is to find out the purpose for which the docex is used. Is
it used to transmit ordinary correspondence, cheques
and other bills
of exchange? Is docex a safe system to be used to transmit
original documents, such as original title deeds?
It is indeed true
that a number of original documents are transmitted by docex. Some
do reach their destination and others do
not.
0ne cannot conclude from annexure "D2" that the
applicant's attorneys were aware that the cheques would be forwarded
to them by docex. To do so will be a misnomer. In essence
what should occur is that there must be an implied invitation
by the
creditor to the debtor to send an item by way of docex. If no
such invitation is extended there is no need for the
creditor to
object to a mode that is to be utilised by the debtor. If a debtor
chooses a mode that he wants to use then he must
take the risk of the
consequences. An implied term of agreement between the parties
must not be too remote to decern.
The respondent submits that it is a normal practice between
attorneys to transmit cheques by docex. As indicated
supra
it
is normal to transmit original documents through docex but in modern
business parlance it may not be normal to transmit cheques
by
courier. It would appear that cheques are normally deposited
into a bank account or banked through electronic transfer.
Modes of
transport and transmission of instruments come and go. The Post
0ffice and telegraphs were modes which were employed
for donkey
years, but they have been abrogated by disuse as new modes were
introduced. I am not convinced that a docex in
the context
supra
is a safe system through which cheques may be sent
whether marked "not negotiable" or "not transferable"
or
not. The case in point is a good example.
It is indeed true that the Acting Manager Legal Services states in
paragraph 8 of his letter "E1" dated 30 January
2008 that the cheque in the sum of R453,25 would be forwarded by
"ordinary mail". However, it is doubtful if Mr Laher
of the applicant's attorneys ever made such a request. In his letter
"E2" dated 21 February 2008, Mr Laher
was
replying to the respondent's letter "E1" dated 30 January
2008. Paragraph 1 of "E2" reads as follows:
"We are in receipt of, and thank you for, your letter dated 30
January 2008 together with certain enclosures, including a
cheque
drawn by you in favour of Findlay & Niemeyer Attorneys in the
amount of R453,25."
When this letter was written the cheque was already dispatched by the
respondent. There was no prior agreement between the parties
that
the cheque should be dispatched by way of docex. At the stage
the letter "E2" was written the horses had already
bolted.
It was too late for the applicant's attorneys to indicate that the
cheque should not be transmitted by docex. The letter
was received
ex post facto
.
The
onus
is on the respondent to prove that there was an
implied agreement between the parties. The agreement must have been
made prior
to the dispatch of the cheques.
In casu
the
letters "D1" and "D2" were written after the
cheques were sent. There was no need for an objection by
the
applicant's attorneys.
Except for the cheque in the amount of R453,25 which was dispatched
by the respondents to the applicant's attorneys, there was
no
practice between the parties that cheques could be sent by docex or
post. No inference can be drawn from this one isolated
event.
Further, there was no prior agreement.
The words of Lord Esher M.R. in
Pennington v Crossby &
Sons
(1897, 77 L.T.R. 43) as quoted by RAMSBOTTOM J in
Goldfields Confectionery and Bakery (Pty) Ltd v Norman Adam (Pty)
Ltd
1950 2 SA 763
(TPD) at 770:
"There was no course of business that the mere delivery of the
cheque to the Post 0ffice was equivalent to delivery to the
plaintiff
and was, therefore, a payment of the money due. The course of
business was merely that the defendant sent cheques to
the plaintiff
by post, and the plaintiff never objected to being paid that way.
It would be outrageous for the court to infer
from that that the
plaintiff ever requested the defendant to send cheques by post, and
agreed to run the risk of (or) in the transit."
See also
Barclays National Bank Ltd v Wall
1983 1 SA 149
(AD)
at 159F H.
In casu
no inference can be drawn that the applicant
ever requested the respondent to send the cheque by docex. For this
agreement to
qualify as an implied term, there must be step by step
assurance that there was a request made by the applicant to the
respondent,
there must be a practice between the parties that docex
is used in their business dealings. The practice must be employed in
modern
business parlance and should be common countrywide or
internationally. The item must have reached the post box or if a
docex is
used it must have been properly secured (registered and
dispatched).
The interpretation of letters "C1" and "C2" at
pages 37 and 46 of the applicant's founding affidavit respectively
does not help the cause of the respondent in its argument that there
was an invitation by applicant to send by docex. Such a construction
will be out of context.
In
Dadoo & Sons Ltd v Administrator, Transvaal
1954 2 SA
442
(TPD) – the principle applied is the same as in the other
cases. However, the two judges were not
ad idem
on the
issue of implied request. I am inclined to agree with RUMPFF, J
(as he then was) that "there had been
no specific or
implied request" and that
in casu
since the cheque
did not reach the applicant's attorneys the risk remains with the
respondent. It may not always be accepted that
because the parties
conduct business in two different towns (cities) a probability exists
that they conduct business through docex.
It will depend on each
individual case.
I am inclined to believe that the intention and expectation of the
applicant was always that the cheques would be deposited –
annexure "D4" confirms this. This is also confirmed by the
fact that the respondent's attorneys of record requested
the
respondent to cancel and provide new cheques which had to be
deposited. This is an indication that they knew that the cheques
had
to be deposited and not sent by docex.
I am therefore of the view that the respondent did not adduce
sufficient evidence that there exist an implied/tacit term. There
was neither a request nor authority by the applicant that the cheque
be transmitted by docex.
In the premises the following order is made:
1. Condonation for the late filing of the heads of argument and for
the filing of the answering affidavit out of time is granted.
1.1 The respondent is ordered to pay the costs of condonation at
party and party scale.
2. The applicant's application is granted with costs.
T J
RAULINGA
JUDGE
OF THE NORTH GAUTENG HIGH COURT
6055-2007
HEARD ON:
FOR THE
APPLICANT:
INSTRUCTED
BY:
FOR THE
RESPONDENTS:
INSTRUCTED
BY: