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[2009] ZAGPPHC 86
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Zelenyuk v Avnit (10125/2008) [2009] ZAGPPHC 86 (10 June 2009)
/EVDM
IN THE
H
OOGGEREGSHOF
VAN SUID AFRIKA
(NO
ORD
GAUTENG HOË HOF, PRETORIA)
Case
Number: 10125/2008
In the matter between:
VICTOR
NICOLAY ZELENYUK
APPLI
CANT
vs
DAVID SAMEUL
AVNIT
RESPONDENT
JUDGMENT
Delivered on
:
10 June 2009
POTTERILL AJ
In the applicant’s amended notice the Court
is requested to grant an order :
“
Declaring that the
Respondent was not entitled to make payment to the Applicant by
utilizing the exchange rate of ABSA in order
to convert his
liability in USD to South African currency;
An order declaring that when converting a
judgment for payment sounding in a foreign currency to South African
currency the amount
shall, in the absence of any express stipulation
to the contrary, be calculated according to the indicative rate of
exchange
of the South African Reserve Bank as published on the day
the amount is paid, alternatively an order that the exchange rate of
FNB as on 29 June 2007 be declared to be the exchange rate
applicable to the conversion of the amount owning(sic) to the
Applicant;
Payment of R426
240.00,
alternatively R206 880.00;
Interest on the amount of R11 354 240.00 from
1 July 2007 – 3 July 2007(i.e. 2 days) [this was amended
orally at the hearing
as reflected herein]
Interest on the amount of R426 240.00,
alternatively R206 880.00 at the rate of 15,5% per annum a tempore
morae from 30 June
2007 to date of payment;
Costs of suit on the scale including costs of
two Councel [ this was also amended orally at the hearing];
Further and/ or alternative
relief.
”
On the papers before me the following facts are
common cause:
The applicant and respondent on 27 February 2007
concluded a settlement agreement with clauses 2.1 and 2.2 reading as
follows:
“
Avnit shall pay to
Zeeluyk on or before 30 June 2007
US$1, 600,000.00(One million
Six Hundred Thousand US Dollars)
.
The aforesaid amount shall be paid into the
following bank account:
Danie Potgieter Attorneys.
FNB:261-556, Centurion
Branch.
Account number:62006932439.
(Ref:Avnit/Zelenuyk)
”.
That 30 June 2007 was a Saturday.
The respondent on 29 June 2007 approached ABSA
Bank Limited and obtained an exchange rate for conversion of the sum
of
USD1 600 000.00. The exchange rate quoted by ABSA
was R6, 83.
The bank (ABSA) transferred the money in three
instalments of
R1 228 000.00 and R7
600 000.00 and R2 099 600.00 totalling
R10 928 000.00 only to be received in the
nominated bank account on 3 July 2007. The delay was due to the
banking process.
The applicant accepted
responsibility for the delayed payment and paid 2 days interest at
15,5% in the amount of R9 281.32.
From the papers the following is also not in
dispute
The parties did not agree to
any rate whatsoever.
The applicant had the option
of paying the judgment debt in Rands.
South Africa has a floating
exchange rate which implies that the foreign exchange value of the
rand changes continuously according
to supply and demand.
There is no official rate for
the exchange of currency in South Africa and the Reserve Bank
reflects on its website the average
of the R/US$ exchange rate
quoted by the four largest authorized dealers in foreign exchange at
approximately 10h30 on normal
trading days.
ABSA is one of the four
largest authorized dealers in foreign exchange.
On 29 and 30 June 2007 ABSA
Bank’s Limited closing buying rate was R6.8763, the selling
rate was R7.1672 and the indicative
rate was R7.0218 to the US
Dollar
.
On 29 June 2007 FNB’s
selling rate was R7,1835 and the buying rate was R6,8971 to the US
Dollar. At FNB no Forex data was
available for 30 June 2007.
The applicant contends that
the respondent’s aver payment and that they have the onus to
prove proper payment and they
have not on the papers discharged
this onus. The reason for this is that as a matter of law,
alternatively upon proper interpretation
of the agreement,
alternatively in terms of an implied term of the agreement the
Court must order the respondent to pay the
Applicant the equivalent
in Rands to US$ on a reasonable basis which would be the Reserve
Bank’s indicative rate, alternatively
the buy-back rate of
FNB. In argument
a
further alternative was added; the selling rate of FNB or ABSA
because the respondent could not have shopped around for the
cheapest rate and it is a practical solution.
The respondent argues that
the version of the respondent must be accepted in terms of
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1984(3)SA 623 (A). In view of the contention by the applicant that
the parties contemplated to be paid in US$ there can be
no implied
term of the contract that the indicative rate or selling rate would
be paid. On the papers there is also no basis
set out as to what
trade usage or custom is and this argument must be rejected.
The correct legal position is
to satisfy a judgment debt in a foreign currency by the payment of
its equivalent in Rands when paid.
The respondent did this and the
application must be dismissed with costs.
If in motion applications
there is a dispute of fact it is trite that the test in the
Plascon-Evans Paint matter supra is to
be applied. This is to be
applied even if the onus is on the respondent. However,
in
casu
there
is no factual dispute. Payment is admitted, but the Court is
requested to declare that the conversion method of the
payment was
incorrect and the submissions for this are based on arguments
pertaining to the law, not on the facts.
The submission on the papers
that the parties upon proper interpretation of the contract agreed
to the indicative rate flies
in the face of the common cause facts;
the respondent had the right to make payment in rand and as there
is no official rate
in South Africa proper interpretation of the
agreement can never lead to the conclusion that the parties would
have paid the
indicative rate. Neither can it be implied in the
contract imposed by law from without
;
I am now only requested to declare what exchange rate is to be used
when not agreed upon. There is also nothing on the papers
before me
setting out what the trade usage is. In address this argument was
not raised, I think for obvious reasons, and I
do not find it
necessary to deal further with these arguments.
The contention of the
applicant is that the conversion from US$ to Rand must be done on a
reasonable basis and with regard to
a prevailing conversion rate,
i.e. the Reserve Bank’s indicative rate, alternatively FNB’s
buy-back rate, alternatively
the selling rate. Applicant’s
argument is thus that by law; flowing from the common law, the
respondent should have paid
the Reserve bank’s indicative
rate as an objective estimate or value prescribed by outside
authority or in accordance
with trade usage. In the application the
applicant refers only to the indicative rate as being the
applicable rate. The reason
for this being the applicable rate is
set out as follows: “
I
adopted the view that the applicable rate is the official rate for
the Republic of South Africa determined by the Reserve
Bank of
South Africa, ….the rate obtained from the reserve Bank’s
official website for 29 June 2007 was R7.0964
to the dollar…..which
conversion results in a further amount of R426 240.00 being
payable..
There is no reason why the
Respondent had the right to appropriate the benefit of the cheaper
rate to himself and if any bank’s
rate were to be used, the
so-called
”indicative rate” would have be used resulting in neither
a benefit to the Respondent or to me;”
{Paragraphs
20.4 and 20.3 of the answering affidavit}.
The question that needs to be
answered is did the respondent perform in terms of the agreement,
i.e. did he pay the amount of
US$ 1 600 000.00 into the allocated
account? On the papers before me the respondent avers he did.
Nowhere on the papers did
the applicant aver that the amount paid
into the allocated account is not the amount of US$ 1 600 000.00.
His only contention
is that the respondent was not entitled to use
the exchange rate he used to his benefit. This is however not the
issue, the
issue is did the applicant get what he bargained for?
He did not state that he did not get what he bargained for because
the
Rands paid
into the allocated account did not total
US$ 1 600 000.00
.
The applicant
feels
aggrieved that the respondent used ABSA bank’s conversion
rate to fulfil the agreement. The correct rate would have
been the
indicative rate of the Reserve bank. This is however not the
official rate of South Africa and I am not inclined to
declare it
as such. The reserve bank is not a commercial bank. The indicative
rate is only a reflection, not prescriptive,
of the average R/US$
exchange rate quoted by the four largest authorized dealers. One
can only exchange currency in South Africa
through an authorized
dealer, not the reserve bank. ABSA is one of the four largest
authorized dealers. The rate to convert
dollars into rand was used
as on 29 June 2007. This rate was used because 30 June 2007 was a
Saturday. The applicant in his
replying affidavit [paragraph 27.2]
denies that the rand equivalent as on 29 June 2007 should have been
paid, but the rand
equivalent of 30 June 2007 should have been
paid. ABSA rates for 29 and 30 June 2007 are identical (Annexures
VZ1 & VZ3).
On Annexures VZ4 and VZ5 no data for Forex 30 June
2007 can be reflected for Standard bank and FNB. The rate of
exchange must
be used on the date payment is made, as there was no
exchange rate for 30 June 2007 the respondent acted
bona
fide
and
reasonable in utilizing the exchange rate as on 29 June 2007. On
the above facts I can not declare that respondent was
not entitled
to make payment by utilizing the exchange rate of ABSA. The rate
used is an accepted public rate. I can not find
there was improper
payment.
The alternative argument is
that FNB’s exchange rate, the rand buy-rate (the applicable
rate for purchasing rands with
dollars) be utilized. Once again the
applicant had not made out a case that the agreement was not
fulfilled because he
did
not in fact receive US$ 1 600 000.00. There is on the papers no
basis to suggest that the monies paid in at FNB is not the
amount
of
US$ 1 600 000.00. There is nothing on the papers
to suggest why FNB’s rates should be the preferred rate. I was
referred to
a letter, Annexure C, by the respondent’s attorneys
wherein the respondent’s attorney refers to ABSA’s
“buy-rate.”
This referral is not a basis for applying
FNB’s rate. The allocated account was with FNB, but there is
nothing on the papers
to suggest that therefore FNB rates should
apply or that FNB rates would result in payment of the amount as
agreed.
As its main solution to this
application the applicant is relying on the judgment of Stegmann J
in
Barclays
Bank of Swaziland Ltd v Mnyeketi
1992(3)
WLD 425 on 435D-E:
“
It is perhaps relevant to mention the
general rule of the common law that (subject to any contractual term
to the contrary) the
debtor was free to choose the currency in which
to pay his debt. Groenewegen De Legibus Abrogatis 46.3.99 (Beinart’s
translation
vol 2 at 295) puts it thus:
“…
(A)ccording to the general
practice and custom of the whole world, not only the person who owes
money in general, but also the person
who has promised money of a
particular kind, is permitted in all cases to pay in other coinage,
even of inferior designations or
metal, as long as the amount he pays
corresponds to the value of the money promised, in accordance with
the accepted public rates
or with an objective value or estimate
prescribed by outside authority. And this is without doubt the rule
which applies, except
in the case where it clearly appears that the
contracting parties have agreed otherwise…..”
And further on p436 D-F:
“…
I consider
that I must enter provisional sentence for payment of the debt in the
foreign currency in which the foreign judgment
quantified the debt.
At the same time, I must leave the defendant free to make payment in
the currency which is legal tender in
this jurisdiction, viz South
African rands. In that way the foreign creditor will receive from
the defendant either the amount
of the judgment in the relevant
foreign currency (if the defendant is in a position to acquire it and
deliver it) or else a sufficient
sum in South African rands to enable
the creditor, at the time of payment, immediately to acquire the
amount of the relevant foreign
currency (if he is in a position to do
so). This result seems to me to satisfy the principle of nominalism
restated and emphasised
by the Appellate Division in the SA Eagle
Insurance case supra.
”
It is argued that in terms of
this case the selling rate is to be applied where no agreement
between the parties was reached. The
selling rate is the amount of
rand necessary to purchase US$ dollars at the time of performance.
On the papers there simply was
not a single averment that with the
amount of rand paid into the nominated account he could not acquire
US$ 1 600 000.00. The only
averment pertains to the indicative rate.
In the amended notice FNB’s rate is requested and orally it is
amplified as being
the “buy-back rate.” There is no
prayer in terms of the selling rate and it is not the Court’s
task to make
calculations and bargain on behalf of the parties.
Judge Stegmann in the case supra on p437, A-B, finds the following:
“
It is in my view, the
function of this Court to determine the rate of exchange on which the
Sheriff is to rely when executing this
Court’s judgment.
However, for practical purposes, I think it can safely be left to the
plaintiff, provided that the defendant
is given an opportunity to
challenge the rate claimed by the plaintiff and to have it replaced
by such rate as the Court may hold
to have been proved.”
He
does not find that the selling rate must be applied, but leaves it
open to be proved! The respondent has thus proved payment.
I accordingly dismiss the application with
costs.
________________________________
S Potterill Acting Judge of the
High Court
Attorney for the
Applicant
:
STRYDOM & BREDENKAMP ING
(Ref: MW KETS/am/HZ0004)
75 George Storrar Drive
Groenkloof
PRETORIA.
Tel:
012 460 1930
Attorney for the
Respondent
:
WERKSMANS ATTORNEYS.
(Ref: MR B HOTZ/te/AVNI7673.
16/016035te.doc)
155 – 5
th
Street
Sandton
JOHANNESBURG
Tel:
011 535 8000.