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[2004] ZAFSHC 102
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Absa Bank Limited v van der Westhuizen and Another (3486/2001) [2004] ZAFSHC 102 (11 November 2004)
IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE
FREE STATE PROVINCIAL DIVISION)
Case No. : 3486/2001
In
the matter between:
ABSA
BANK LIMITED
PLAINTIFF
and
KAREL
JOHAN VAN DER WESTHUIZEN
FIRST
DEFENDANT
BELIA
VAN DER WESTHUIZEN
SECOND
DEFENDANT
HEARD ON:
7
SEPTEMBER 2004
JUDGMENT:
RAMPAI
J
DELIVERED
ON
:
11
NOVEMBER 2004
_____________________________________________________
[1] By way of an action
the plaintiff claims from the defendants, jointly and severally, the
one paying the other to be absolved:
Payment of the amount of
R1 228 167,60;
Interest thereon at the
rate of 15,5% per annum from 10 April 2000 until the date of final
payment as well as
the costs of the action
on the scale as between attorney and client.
[2] It is necessary to
outline a brief background of the matter. The second defendant was
the holder of a current account no. 4048946757
at all times relevant
to this dispute. The account was held at the Welkom Branch of the
plaintiff, Absa Bank Limited. It was opened
pursuant to the lodging
of a written application by the second defendant. It was opened more
than five years ago, during January
1999. It was opened in the name
of the second defendant trading as Superior Transport. Both
defendants had signing powers on the
business account. Together they
conducted the account.
[3] The plaintiff
collected the deposits which were made in favour of the account. The
plaintiff also honoured the cheques which
were drawn against the
account from time to time. The plaintiff also regularly debited the
account with its own banking charges.
[4] On Monday 10 April
2000 a cheque in the amount of R1 228 167,60 was deposited into the
said account. It was drawn in favour of
SSEM. It was drawn on the
Standard Bank Limited Gauteng Province branch. It was crossed and
marked âNOT NEGOTIABLEâ and âNOT
TRANSFERABLEâ. It was dated
16 March 2003. It was numbered GQ331467 and it was drawn by the
paymaster general of the Gauteng
Provincial Government. It was
obvious
ex
facie
the instrument that it was not intended for the account of Superior
Transport.
[5] In due course the
plaintiff as the collecting bank presented the cheque it had
collected on behalf of its customer to the drawee
bank, the Standard
Bank. The drawee bank duly honoured the cheque and transferred the
funds to the collecting bank, the Absa Bank.
The said account of the
defendants was credited with the proceeds of the cheque. The
defendants withdrew and appropriated the proceeds
of the cheque for
their own personal purposes.
[6] The
pleading show that the drawer of the cheque in other words the
aforesaid paymaster general informed the plaintiff during Mary
2000:
that the aforesaid
cheque had gone astray or stolen;
that fraud or theft had
allegedly been committed in respect of the aforesaid cheque;
that the plaintiff was
accordingly liable towards Gauteng Provincial Government as the true
owner of the cheque.
The drawer contended and
the plaintiff conceded:
that the plaintiff acted
as the collecting banker in collecting the proceeds of the cheque
from the drawee bank;
that the cheque was
clearly marked with the words âNOT TRANSFERABLEâ;
that the cheque was
drawn in favour of an entity other than the second defendantâs
account or trade name;
that in collecting the
aforesaid proceeds as it did, the plaintiff breached a legal duty it
owed to the drawer as the true owner
of the cheque and
that by virtue of the
plaintiffâs breach the Gauteng Provincial Government had suffered
damages in the amount as was reflected
on the cheque.
[7] The first defendant
admits that the plaintiff was consequently liable to Gauteng
Provincial Government as the true owner of the
cheque. He also
admits that the plaintiff indeed refunded the amount of R1 228 167,60
to Gauteng Provincial Government on 16 May
2000. Moreover he also
admits that, by refunding the amount of the cheque, the plaintiff had
accordingly suffered a loss in the
amount of R1 228 167,60.
[8] Still on the
pleadings, the second defendant denies all the matters I have
mentioned in paragraph 7
supra
which the first defendant admits. In her answer to the plaintiffâs
questions in terms of rule 37(4) Bundle D p. 67 paragraph 1.1.4
she
denies that she and the first defendant together operated the
business bank account of Superior Transport.
[9] Again in her answer
to the questions in terms of rule 37(4) Bundle D p. 68 paragraph 1.8
the second defendant denies the amount
of the cheque was withdrawn
and appropriated by her together with the first defendant for their
personal benefit.
[10] The defence of the
defendants is that the first defendant has, on 11 April 2000 orally
requested a certain Werner, an employee
of the plaintiff at the
Welkom Branch of the plaintiff, to clear the cheque and to approach
the funds deposited by means of the particular
cheque carefully. The
said Werner, they alleged, was a person charged with the task of the
special clearance of the cheques.
They alleged further
that the said employee of the plaintiff thereafter made a negligent
misrepresentation to the first defendant.
They pleaded that the
employee in question represented to the first defendant that the
cheque was good and that the first defendant
could use the funds. On
the premises they plead that the plaintiff is bound by its
misrepresentation. And furthermore they plead
that the plaintiff is
in breach of the contract. The said Werner had concluded on its
behalf with the first defendant.
[11] At the beginning of
the hearing, I ruled in the first place, that the plaintiff had the
duty to begin and to prove that it had
an obligation to refund the
true owner of the cheque in other words, the Gauteng Provincial
Government and to prove that the plaintiff
had indeed done so. In
the second place, I ruled that the defendants carried the onus of
proving the negligent misrepresentation
and the breach of contract as
alleged in their plea and the further particulars thereto. In the
third place, I ruled that after
the defendants had presented their
evidence in connection with the negligent misrepresentation and the
contractual breach the plaintiff
could lead evidence in rebuttal. I
made the ruling by virtue of an agreement
inter
partes
.
[12] Maria Catharina Louw
was called as witness no. 1 for the plaintiff. She testified that
she was previously in the employ of Pretoria
Academic Hospital. She
was a grade 3 senior clerk. She was in the expenditure department.
She retired at the end of June 2002.
The expenditure department
processed all the documentation in respect of the payments which
Pretoria Academic Hospital had to make
to its suppliers. One of the
hospital equipment suppliers was SSEM which stood for Specialised
Systems Electro Medical (Pty) Ltd.
She explained a certain
process which was followed in order to effect payments to the
hospital suppliers. She referred to and explained
various documents
she had to use. By 8 March 2000 the Pretoria Academic Hospital owed
the sum of R1 228 167,60 to SSEM in respect
of equipment supplied.
Pretoria Academic Hospital was a public hospital financed by Gauteng
Provincial Government. The arrangement
was that the payments due to
SSEM were made by means of cheques which were printed in Johannesburg
by Gauteng Provincial Government.
The messenger from Pretoria
Academic Hospital would then drive to Johannesburg to collect the
cheque.
[13] A certain Lucas, the
messenger, would then hand the cheque to her, on his return to the
hospital. Etienne Venter, a representative
from SSEM, would then
collect a cheque from her at Pretoria Academic Hospital. For some
inexplicable reason the usual procedure
was not adhered to in respect
of the particular cheque. Lucas could not find the cheque when he
was in Johannesburg to collect the
mail from Gauteng Provincial
Government. Instead he received a yellow card which was an
indication that the cheque had been directly
posted to the supplier
concerned by the Gauteng Provincial Government. But SSEM never
received the cheque by mail. She made some
efforts to trace the
cheque. She established that the missing cheque was deposited into a
certain account and that it was collected
by the plaintiff at its
Centurion Branch. She wrote a letter to the branch of the plaintiff
at Centurion in which she advised the
plaintiff that the payee SSEM
did not receive the cheque. In due course she received a message
from the said branch. She then send
a messenger to collect an Absa
Bank cheque drawn in favour of Gauteng Provincial Government in the
amount of R1 228 167,60. The
hospital messenger, Lucas, collected
the cheque and on her instruction, took the refund cheque to the
Gauteng Provincial Government
in Johannesburg. Lucas had since
retired and his exact whereabouts were unknown to her.
[14] She informed Etienne
Venter about the aforegoing developments that Absa Bank had refunded
the amount of the original cheque to
the Gauteng Provincial
Government and that SSEM should contact the Gauteng Provincial
Government for the payment due to it. Later
on Etienne Venter
reverted to her and confirmed that the Gauteng Provincial Government
did in fact let SSEM have a replacement cheque.
As a gesture of
appreciation, Etienne Venter brought her a box of chocolates
afterwards.
[15] During
cross-examination she answered that she did not have personal
knowledge that Gauteng Provincial Government indeed posted
the
original cheque to SSEM. She deduced that from the yellow card which
routinely served as proof that the cheques had been posted
and not
collected.
She
could not say who had posted the cheque. On 9 May 2000 she contacted
the first respondent and informed him that the cheque had
been
wrongly deposited into his account.
[16] Etienne Tjaart
Venter was then called as witness no. 2 for the plaintiff. He
testified that he was employed as an area manager
at SSEM. During
the year 2000 he was a medical representative of the same company.
He had arranged with Ms. Louw that he could
collect from her at
Pretoria Academic Hospital a cheque in the amount of R1 228 167,60
from the Gauteng Provincial Government. He
decided to collect the
cheque so that the incident of fraud could be curbed and so that the
company debts could quickly be settled
in order to avoid paying
interest. He was pressured by the company director, a certain Mr.
Goldblatt. Ms. Louw told him that despite
the arrangements the
Gauteng Provincial Government had posted the cheque. He requested
his colleague, Sonja Naryan, the credit controller,
to follow the
matter up. The supplier SSEM never received the cheque by post.
However SSEM eventually received a replacement cheque
from the
Gauteng Provincial Government. He saw the bank statement of his
company on which the payment was reflected. He thanked
Ms. Louw for
the assistance by giving her a box of chocolates.
[17] During
cross-examination he answered that he had no knowledge of the
telephone conversation he was alleged to have had with the
first
defendant.
[18] I find it as a
matter of practical convenience, expedient to deal with the issue of
the plaintiffâs liability towards the Gauteng
Provincial Government
first. The issue, it will be recalled, was admitted by the first
defendant but denied by the second defendant.
Has the plaintiff
discharged the onus of proving that it was liable to the Gauteng
Provincial Government, that it has refunded the
Gauteng Provincial
Government and that it has thereby suffered loss?
The evidence of Louw,
Venter and Belia van der Westhuizen, the second defendant, is
relevant to the enquiry. In her testimony the
second defendant made
no attempt to attack the plaintiffâs version in this regard as
narrated by Louw and Venter. Both Louw and
Venter were honest and
impressive witnesses. Like Louw, Venter gave a logical and a
credible account which substantially corroborated
an equally logical,
credible and probable account given by Louw. Moreover their version
is not disputed by the first defendant.
Therefore I unconditionally
accept their testimonies. I shall evaluate the second defendant as a
witness later.
[19] Our banking law
tells us that a collecting banker â that is to say a banker in the
position of the plaintiff â in this instance,
is liable under the
extended
lex
acquilia
for negligence to the true owner of a cheque provided all the
elements of an acquilian liability have been met. Thus, a delictual
action for damages would be available to the true owner of a cheque
who can establish:
that the collecting
banker had received payment of a cheque on behalf of a person who
was not entitled thereto;
that in collection such
a cheque from a depositor the collecting bank acted negligently and
unlawfully;
that such conduct of the
collecting bank caused the true owner of the cheque to sustain loss;
and that the damages
claimed represent proper compensation for such a loss. V
ide
INDAC
ELECTRONICS (PTY) LTD v VOLKSKAS BANK LTD
[1991] ZASCA 190
;
1992 (1) SA 783
(AD)
at
797 A â D per Vivier J.A.
[20] A cheque is a piece
of corporeal movable property. Its ownership can be transferred only
in accordance with the general requirements
of the law regarding the
transfer of ownership of corporeal movables. There must be a
delivery of the thing, that is the transfer
of possession, either
actual or constructive, by the transferor to the transferee, and
there must be a real agreement between the
transferor and the
transferee, constituted by the intention of the former to transfer
ownership and the intention of the latter to
receive such ownership.
Vide
FIRST
NATIONAL BANK OF SA (LTD) v QUALITY TYRES 1970 (PTY) LTD
[1995] ZASCA 65
;
1995 (3) SA 556
(AD)
at
568 G â H.
[21] If a debtor posts a
cheque to his creditor without the creditorâs consent or request,
he has to pay the amount of the debt
again if the instrument is
discharged without the creditor receiving it. Since the cheque has
not been delivered, ownership in it
does not pass and, consequently,
the debtor, because he remains the owner, bears the risk of its theft
or loss.
Where
a cheque is posted, in accordance with an agreement, the debtor
discharges his debt provided the cheque is paid. Such an agreement
is usually preceded by a
request from the creditor
to the debtor to send a cheque by post.
Vide
F.R. Malan, J.T. Pretorius assisted by S.F. du Toit: Malan on
BILLS
OF EXCHANGE, CHEQUES AND PROMISSORY NOTES IN SOUTH AFRICAN LAW
,
Fourth Edition p. 323 â 325 paragraph 199 and p. 405 paragraph 222.
[22] In the light of the
evidence of Louw and Venter as well as the undisputed facts as set
out in paragraph 6 above, I find that
the plaintiff has on a balance
of probability proved:
that there was an
agreement between Pretoria Academic Hospital or Gauteng Provincial
Government on the one hand and SSEM on the
other;
that
Venter would collect the cheque of R1 228 167,60 from Louw in
Pretoria;
that there was no
agreement between the Gauteng Provincial Government and SSEM that
the cheque should be posted;
that the Gauteng
Provincial Government posted the cheque on its own without the
consent or request of SSEM;
that the plaintiff was
liable towards the Gauteng Provincial Government as the true owner
of the cheque for the repayment of the
amount of the cheque because:
the plaintiff received
the payment of the cheque on behalf of someone who was not entitled
to the cheque;
the plaintiff acted
negligently and unlawfully in receiving such payment;
the conduct of the
plaintiff caused the Gauteng Provincial Government to sustain loss
and
the Gauteng Provincial
Government was lawfully entitled to claim proper compensation from
the plaintiff for such loss.
This concludes the first
issue.
[23] I turn now to the
second issue which concerns the negligent misrepresentation. The
onus of proving that the plaintiff made negligent
misrepresentation
rests on the defendants. The first defendant testified that he and
the second defendant previously had a business
account at another
bank. The second defendant applied to the plaintiff for a bond over
her own property. He agreed that the second
defendant should open an
account at Absa Bank for the business in her own name. He also
agreed that their business account be transferred
from their old bank
to their new bank in other words the plaintiff.
Asked
during his examination by his lawyer, Mr. Nel, whether he and his
sister, the second defendant, were business partners, he
answered as
follows:
â
Well
the business was mine, but the vehicle in question was on her,
registered on her name, and so was the banking account, but I
did all
the business.â
[24] His sister, the
second defendant, opened a business account in her name for Superior
Transport. She had a fixed property over
which to register a bond.
Apparently he did not. He operated the account and ran the business
of Superior Transport. He won two
contracts, one from Sappi Mining
Timber and one from Autonet. He needed a truck in order to do the
work. The second defendant obtained
finance and bought a Volvo FH12
truck. The truck was used in the transportation of mining timber
from Sappi to the mines. He was
forced to sell the business. One of
the business trucks was extensively damaged in an accident at Ixopo
in KwaZulu-Natal. The comprehensive
insurers repudiated the claim.
The accident caused the business a huge loss. In addition to the
truck itself, the cargo was also
extensively damaged. He had the
business advertised by certain specialists in the selling of
business. Their representative was
Mr. Bertus Claasen. Two of his
clients, Lewis and Ntombela, signed an offer to purchase. He wanted
R1,7 million but ended up accepting
R1,4 million for the sale of the
Autonet contract and the Volvo FH12 truck.
[25] The purchasers first
paid a cheque deposit of R504 263,89. He gave them the banking
details. They deposited the money into
the business account at an
Absa Branch somewhere in the Gauteng Province. Since the purchasers
failed to pay the balance on time,
he threatened to cancel the deal
unless they paid the original price of R1,7 million. They agreed.
They later deposited a cheque
at the Centurion Branch of Absa Bank on
10 April 2000
[26] He then telephoned
Werner at the Welkom Branch of Absa Bank. He asked him to do a
special clearance in respect of the cheque
deposited on 10 April
2000. The money became available after fourteen days. He was at
Hatfield Branch of Absa Bank in Pretoria
when a certain lady,
apparently a bank assistant, informed him that the cheque had been
cleared. That lady in Pretoria called Werner
in Welkom who confirmed
that the funds were available. He used part of the money to pay the
creditors, among them Stannic who had
financed the purchase of the
Volvo FH12 truck by the second defendant. The purchasers of the
business came and took possession of
the truck and the trailers.
[27] Not
long afterwards Louw telephoned him and informed him that the cheque
was made out in favour of a certain beneficiary and
that it should
never have been deposited into the bank account of Superior
Transport. He then explained to Louw that the purchasers
of his
goods transportation business deposited the cheque into his bank
account. He had no control over the particular bank transaction
and
the cheque in question. He was unaware that the cheque was stolen.
Venter of SSEM also called him. He wanted more details
of the
purchasers of his business. The plaintiff, Absa Bank, waited for 33
days before they realised that there was a problem with
the cheque.
He was sued afterwards.
[28] During
cross-examination the first defendant testified that he was an
experienced business man. The second defendant opened
the bank
account for Superior Transport by filling in an application form, but
he was not sure whether he was present when that was
done. The bond
at Absa Bank was in the name of the second defendant. The bond was
paid by means of the funds drawn from the account
after the deposit
of 10 April 2000. He denied the account was a joint venture banking
account. He did not have a joint venture
with the second defendant
at all.
[29] The effective date
of the sale was 7 March 2000 in terms of clause 3.2 of the Business
Sale Agreement. He, as the seller, was
obliged to give possession to
the purchasers on the effective date and from that same date the risk
of any profit of loss in the
business would pass from the seller to
the purchaser. See clause 12. He confirmed that in terms of clause
20.2 the agreement cancelled
and superseded all other agreements
concluded by the same parties and that any amendment or addition
would be of no force and affect
unless reduced to writing and signed
by the parties. He and the purchasers did not sign any amendment or
addition and it could be
accepted that the agreement was the only
agreement between him and the purchasers.
[30] He answered that he
was positively sure that he spoke to Werner at the Welkom Branch of
the plaintiffâs during April 2000 and
asked Werner for a clearance
on the cheque. He confirmed that on 12 December 1997 he made an
affidavit which appears in Bundle X
p. 101 â 102. He admitted that
on a previous occasion a cheque which was presented as a payment in
respect of a previous sale
where he was the seller as in the present
case, was not met by the bank as it turned out to be a stolen cheque,
as in the present
case. In that instant the purchaser was a certain
Mr. Simon Petrus Nkosi. The amount of the cheque was R234 300,40.
[31] He again
acknowledged that he was the author of another affidavit which he
also made and signed in Welkom on 12 December 1997
which appears in
Bundle X p. 106 â 107. He entered into a franchise agreement on
behalf of Aunty Dollyâs Kitchen with a certain
Jan Crous on behalf
of Sun Industries BK. He was the franchisor and Crous the
franchisee. Crous deposited a cheque of R599 895,50
drawn in favour
of Aunty Dollyâs Kitchen and deposited it into his bank account
held at Verwoerdburg. Two weeks after the cheque
was deposited the
bank informed him that the funds were available.
[32] He
was aware that a period of approximately fourteen days had to expire
before the funds in respect of a cheque deposit could
become
available to a bank customer. He admitted that this was the
knowledge he gained from these previous experiences prior to
the sale
of the truck and its two trailers.
[33] The second defendant
testified in chief that Superior Transport was actually the business
of the first defendant. Her father
bought a house at an auction. He
wanted a bond on the house. The banks declined to give him a bond on
the ground that he was too
old. For that reason she applied for the
bond. Absa bank was willing to grant her a bond over the property on
condition she transferred
the current business account of Superior
Transport from the First National Bank to Absa Bank. She completed
the application forms
in her name for the opening of the cheque
account for the first defendant to run the business of Superior
Transport. She had never
done any business on the account. She had
never signed any cheques and she had never been in contact with
anybody from Absa Bank
since the day the account was opened. The
first defendant operated the account alone ever since she opened it.
[34] The assets set out
in the financial statements of the business were not hers although
they were reflected as such, but the first
defendantâs. The first
defendant informed her that he wanted to sell the truck which was
costing him more than it was worth keeping
because he had financial
difficulties. She gave him the permission to sell the truck. But
she gave him strict instructions to ensure
that the cheque was good
and that the bank had cleared it before he delivered the truck to the
purchasers. She received bank statements
from the plaintiff every
month. About twenty days later she noticed from the bank statement
that the money was still in the bank.
The first defendant handed the
truck over afterwards.
[35] During
cross-examination the second defendant admitted that she made a false
statement in the financial statement. She admitted
she deceived the
plaintiff with the false financial statements, which she presented to
the plaintiff for the purpose of obtaining
the bond. She denied that
the business was a joint venture. She was not able to dispute that
the application form she completed
for the opening of a bank cheque
account was identical to the example in Bundle X p. 1 â 12. She
admitted that she was the author
of the letter which appears in
Bundle X p. 178. In the letter dated 2 February 1999 she authorised
the plaintiff to give her brother,
the second defendant, the signing
powers and to delete her father as a signatory to her cheque account.
She confirmed that the bond
statement appearing in Bundle X p. 179
was addressed to her by the plaintiff and that the outstanding
balance of R93 571,47 was settled
on 2 May 2004.
[36] She handed in yet
another affidavit deposed to by the first defendant at Odendaalsrus
on 27 October 2003. The affidavit appears
in Bundle X p. 180 â
181. In paragraph 5 thereof the first defendant stated that on 10
April 2000 a further cheque in the amount
of R1 228 167,60 was
deposited into his account held at Absa Bank and that it was cleared
after twenty one days.
[37] The second defendant
confirmed that she received a letter dated 3 November 2003 from
Stannic informing her that her account in
respect of the trailer had
been paid in full and that her obligation in terms of the sale
agreement had been met.
[38] The plaintiff then
called four witnesses in rebuttal - amongst them an expert and an
employee at its Welkom Branch.
[39] Anthony
Barry Fourie, witness no. 3 for the plaintiff, testified:
that he was an expert in
banking law;
that it is a universal
banking practice that a customerâs account is immediately credited
when a cheque is deposited;
that it is an integral
part of the contract between a bank and its customer that any cheque
deposited will only become available
as cash when paid to the
colleting bank by the drawee bank;
that it is a universal
banking practice that the holding period in respect of a cheque for
normal clearance through the automatic
clearance bureau system it
seven to fourteen days;
that if it becomes
evident after the expiry of the holding period that a cheque with
which the customerâs account was credited,
is a stolen cheque or a
forged cheque, the bank would be entitled to reverse the credit and
to debit the customerâs account accordingly;
that in the normal
course of business, the cheques deposited are sent to the automatic
credit bureau system on the same day on which
they are deposited.
[40] He testified further
that on the evidence as presented by the defendants, there could be
no talk of a special clearance in the
present matter;
that his opinion was
based
inter
alia
on the fact that it would not have been possible for an employee of
the bank at its Welkom Branch to visually inspect the cheque
deposited at the Pretoria Branch and;
that it was similarly
not possible for a special clearance voucher to be issued to the
customer as the banking practice requires
in respect of a special
clearance requested by a customer.
He concluded by saying
that banking practice is a practice which is well-known and
notorious. His evidence was not at al all shaken
during
cross-examination.
[41] Debra Joy Venter was
called as witness no. 4 for the plaintiff. In brief she testified
that during January 1999 the month during
which the account was
opened in Welkom, the plaintiff generally made use of a printed
application form for the purpose of opening
a current account which
form contained the same terms and conditions as those appearing in
Bundle X p. 1 â 14. Nothing significant
emerged during her
cross-examination other than that the actual agreement between the
second defendant and the plaintiff had been
lost.
[42] Kurt Gerhard
Hartmann was called as witness no. 5 for the plaintiff. He testified
that he was employed as an analyst in the
forensic department of Absa
Bank Limited. His investigation had revealed that at no time was
there a person by the name of Werner
in the employ of Absa Bank who
was responsible for the special clearance of the cheques. He has
inspected and analysed the spin
report relating to the account. A
spin report is a computer generated printout or detailed report of
all the transactions relating
to an account of a bank customer. The
teller with code 7978 who received R1 228 167,60 cheque deposit at
Hatfield Branch on 10 April
2000 at 14h28 as shown in Bundle X p. 78
was dismissed. There was no SQD function code next to this
transaction. The code SQD stands
for special clearance deposit. On
12 April 2000 at 08h58 there was a transaction in respect of this
account in Welkom code 8027
but there was no SQD or special clearance
deposit entry recorded from 11 April 2000 to 15 April 2000. See
Bundle X p. 79. From
15 April 2000 to 19 April 2000 see Bundle X p.
80 and even from 12 March 2000 to 11 April 2000 see Bundle X p. 69.
From 19 April
2000 to 28 April 2000 there were three transaction
entries in respect of Welkom Branch code 8027 but none of them were
SQD. There
were several mini statements requested from the Polokwane
branch code 8032. The purpose of such mini statements was usually to
monitor
the flow of funds relating to an account.
[43] During the
cross-examination he confirmed that once a cheque is already in the
system, no SQD request can be entertained. In
such a situation a
customer has no option but to wait for the expiry of the normal
holding period of fourteen days. He was at a
loss as to explain how
the computer system captured the transaction which was recorded at
Pretoria Administration Centre code 8020
on 10 April 2000 at
01:75:24.1 by teller code 7978 involving the same cheque of R1 228
167,60 hours long before it was actually deposited
at 14h28. He
remarked that one strange and inexplicable entry did not mean that
the entire spin report was incorrect.
[44] Albertus Johannes
Claassen was called as witness for the plaintiff. He testified that
he was an estate agent in the employ of
Rossouw & Partners and
Others in Welkom. He knew the first defendant and his father very
well. He was the proprietor of a
business enterprise called Superior
Transport. A certain Mr. Nel of the Volkskas Bank asked him to sell
the first defendantâs truck.
He advertised the truck for sale.
The selling price was R1,5 million. He found the buyers. The buyers
and the first defendant
agreed on R1,4 million selling price. A
lawyer drew up a vehicle sale agreement on 25 February 2000. At the
first defendantâs
request, he changed this effective date to 7
March 2000. He received the identity documents of the buyers by fax.
They were Alan
Lewis and Sishosonke Ntombela. The seller, K.J. van
der Westhuizen, signed the vehicle sale agreement in his office in
Welkom on
2 March 2000. The buyers were not there to sign the
contract. He kept the contract in his office afterwards.
[45] Towards the end of
March 2000 the first defendant came to see him. He told him that a
deposit of about R504 000,00 had been
paid. The first defendant then
asked him to let him have a contract. He handed the contract still
unsigned by the buyers to the
first defendant. The first defendant
was going to see to it that the buyers signed the contract. About
mid April 2000 the first
defendant called him and advised him that
the balance had also been paid. Soon afterwards he received the
contract from the first
defendant. He perused the contract and saw
that it was signed in Welkom on 2 March 2000 by the buyers. It could
not have been.
[46] On 3 May 2000 the
first defendant informed him that the cheque money was available. He
paid the agency commission in the amount
of R79 000,00. The first
defendant told him he received R1,7 million for the deal. He was
unaware of this R1,7 million or R1,73
million. He had no
correspondence whatsoever from either Mr. Nel of Volkskas Bank or Mr.
Werner of Absa Bank. He had never met
Alan Lewis. He stressed that
the day the first defendant took the contract away from him for
signing by the buyers, clause 21 was
not part of the contract. The
clause about optional extras worth R2 431,49 was inserted afterwards
without his knowledge and involvement.
See Bundle X p. 28. He
closed his file on 8 May 2000.
[47] During
cross-examination he answered that he had been an estate agent since
1958. He was aware of the code of ethics which governs
his
profession. He would not have accepted a commission of R79 000,00 if
he had known that the business deal between the seller
and the buyers
was an illegal deal. The plaintiffâs case was then closed.
[48] Mr. van
Loggerenberg, counsel for the plaintiff, argued that the plaintiff
has on a balance of probability made out a case for
the relief
sought. He therefore submitted that the plaintiff was entitled to be
granted judgment with special costs against the
defendant. However,
Mr. Nel, attorney for the defendants, argued that the plaintiff had
failed to make out a case for the relief
sought. The defendants he
contended had put up a good defence. He therefore submitted that the
plaintiff was not entitled to the
judgment as prayed for. He
accordingly urged me to dismiss the summons with costs.
[49] I have already dealt
with the legal position which obtains between the collecting bank and
the true owner of a cheque. The liability
of the plaintiff, as a
collecting bank, towards the Gauteng Provincial Government as a true
owner of the cheque was, on the pleadings,
never an issue between the
plaintiff and the first defendant. However, on the pleadings, it was
an issue between the plaintiff and
the second defendant. Having
analysed the facts and evaluated the evidence, I found in favour of
the plaintiff on the issue. Therefore
I shall now proceed to examine
the facts and to evaluate the evidence in respect of the second
issue.
[50] The second issue
concerns the common defence of the defendants. The defendants
pleaded that the first defendant made an oral
request to the
plaintiff for a special clearance of the relevant cheque and that
thereafter the plaintiff represented to the first
defendant that a
special clearance in respect of the cheque had been done as had been
requested and that the cheque was good whereas
such a representation
was untrue. They further pleaded that by making the negligent
misrepresentation the plaintiff committed a
breach of the contract
and was therefore not entitled to recover its loss from them.
[51] Mr. van Loggerenberg
submitted that the first defendant was an unimpressive and
untrustworthy witness. He described the first
defendant further as
an argumentative witness who constantly evaded questions,
contradicted himself and trimmed his sails to the
wind. He urged me
to treat the testimony of the first defendant with the utmost
circumspection. The critique appears to me to be
well-founded.
[52] As regards the
account, the first defendant in his written plea admitted that he and
the second defendant conducted the account
together. In his oral
evidence he testified:
that he and the second
defendant previously had a business account at a different bank;
that he agreed to the
idea that the second defendant could open a new account at Absa Bank
in her name for the business and that
the old account, which as we
now know, was held at First National Bank, could be transferred to
Absa Bank. So far there was harmony
between the first defendantâs
plea and his testimony.
[53] But when his own
lawyer, Mr. Nel, ask him the pertinent question whether he and the
second defendant were partners in the business
known as Superior
Transport, he became evasive. He said words to the effect that the
business was his, but the vehicle was hers
as was the banking
account. Here we see the first defendantâs fragile attempt to
disassociate himself from the account. But extricating
himself was
no easy task. On a few occasions during his evidence in chief, he
repeatedly referred to the account as âour accountâ
and not her
account. The possessive phrase he originally chose on his own free
will appears to depict the true state of affairs
as to how he always
saw the account. He said he merely had the signing powers on the
account. In paragraph 5 of an affidavit he
signed at Odendaalsrus on
27 October 2003 as depicted in Bundle X p. 180 â 181 the first
defendant declared that on 10 April 2000
a further cheque in the
amount of R1 228 167,60 was deposited into ââ¦.. my rekening te
Absa Bankâ. Once again he contradicted
himself.
[54] As regards the
truck, the first defendant testified that one of the business trucks
was involved in an accident at Ixopo and
that as a result of the
extensive damage to the truck and its cargo, his business suffered an
astronomical loss. He found himself
facing a desperate financial
dilemma. To recover the losses âthat
we
incurred
due to the accidentâ he decided to sell part of the business. The
pronoun âweâ refers to the two defendants. Now
if the business
was his alone, why did the second defendant have to share the loss
with him?
[55] As regards the
transportation venture, the first defendant was not forthright. He
stated in his evidence in chief that the business
belonged to him,
but the truck to his sister, the second defendant. But in an
affidavit he signed at Odendaalsrus on 15 May 2000
he declared that
he was the owner of a business known as Superior Transport which he
operated with Ms. Belia van der Westhuizen,
the second defendant in
this case. He further stated that the second defendant owned a truck
with two trailers which were used in
the joint venture and that he
had been authorised to sell those goods on her behalf through the
joint venture. But during cross-examination
this experienced
business man denied that the business was a joint venture. The
denial cannot be reconciled with his earlier admissions
that the bond
at Absa Bank was in the name of the second defendant and that it was
finally paid from the business account. His serious
attempt to evade
his previous inconsistent sworn statement has an adverse impact on
his trustworthiness as a witness.
[56] As regards the
creditors, the first defendant testified that he paid the creditors,
but Absa Bank was also paid in respect of
the second defendantâs
bond. The bond was settled from the proceeds of the cheque which had
been deposited into the account in
other words the business bank
account. He had no comment when counsel for the plaintiff put it to
him that the business was a partnership
between him and the second
defendant.
[57] The aforegoing
factors as analysed and evaluated strongly suggest that the business
enterprise was run as a joint venture between
the two defendants.
Whether the second defendant can rebut this
prima
facie
view remains to be seen.
[58] As regards the
business sale agreement, the first defendant confirmed during
cross-examination that clause 20.2 of the agreement
allowed no future
variation whatsoever unless it was written and signed by the parties
concerned. He also understood that the business
sale agreement he
signed in Welkom on 2 March 2000 superseded any other agreement
previously entered into by the parties. He also
confirmed that
subsequent to the signing of the contract he and the purchasers did
not sign any amendment or addition to vary the
original contract.
[59] When the first
defendant was confronted with clause 21 he explained that clause 21
was inserted in the agreement afterwards (after
the signing on 2
March 2000) but before 16 March 2000. The first difficulty I have is
that the addition was not signed in terms
of clause 20.2. The second
difficulty is that the first defendant took the contract away weeks
after 2 March 2000 from the estate
agent who facilitated its drafting
and himself had the clause inserted elsewhere and backdated. But
that is not all. The third,
and certainly the most important query
relates to the amount of the optional extras. He wanted R1 730
000,00 without the optionals.
The price increased by R2 431,49 to R1
732 431,49 as a result of the inclusion of the optional extras. This
revised price was agreed
upon before 16 March 2000. As on 16 March
2000 the outstanding balance due by the purchasers was therefore R1
732 431,49 less R504
263,89 which equals R1 228 167,60.
[60] The first defendant
wants me to believe that on 16 March 2000 the Gauteng Provincial
Government drew up a cheque of precisely
the same amount to settle a
debt of precisely the same amount it owed to SSEM and that after 16
March 2000 the purchasers stole from
Gauteng Provincial Government
the same cheque in order to settle their debt of the same amount due
to the first defendant. This
scenario is highly improbable. The
submission by counsel for the plaintiff that the cheque probably went
through the hands of the
first defendant who then adjusted the
figures by means of the imaginative optional extras so-called, before
the cheque was deposited
is highly probable. It is clear to me, that
the suspicious clause 21 and indeed the entire business sale
agreement was a deceptive
scheme which the first defendant fabricated
to cover his back. During intense cross-examination the lies were
exposed. We know
that the cheque by the Gauteng Provincial
Government was made up of four different invoices. But the same
cannot be said about the
composition of the selling price. I have no
doubt in my mind, that the amount of the optional extras was a
fictitious amount deliberately
fabricated to make the false figures
ad up.
[61] There are more
questions than answers. The drawing up of the business sale
agreement, the true identities of the buyers, the
signing of the
business sale agreement, the identity of the depositor of the cheque,
the contract selling price, the abortive but
cunning attempt to vary
the business sale agreement â all these matters are shrouded by an
uneasy cloud of mystery. I was amazed
by the numerous sworn
statements this experienced businessman had to make to explain his
supposed business decisions and actions.
This is unusual. The
ordinary men and women in business do not act this way. He is a
prolific deponent.
[62] On the pleadings,
the second defendant admitted that the account was conducted and used
by both defendants. But in her answer
to the plaintiffâs questions
in terms of rule 37(4) she denied that she and the first defendant
together conducted and used the
account. She admitted that she
completed the application forms for the opening of the new account.
She testified that the old account
was held at the First National
Bank from where it was transferred to the Absa Bank. She did so for
the sole purpose of obtaining
a bond and opening a current account
for the first defendant. Besides that she had nothing to do with the
account. Despite this
averment, she admitted, still in her chief
evidence that she received bank statements in connection with the
account every month.
She knew about the relevant deposit into the
account. Twenty one days afterwards she noticed from the bank
statement that the money
was still in the account.
[63] It
seems to me, therefore, that she was fairly informed about the
transactions relating to the account. It must be mentioned
that
besides the monthly bank statements, the plaintiff also addressed a
few letters of concern to her as the account holder regarding
the
unsatisfactorily manner in which she was conducting the account. She
also addressed a letter to the plaintiff in connection
with the
account whereby she cancelled her father signing powers. Although
she tried to distance herself from the account, she was
unconvincing.
Even her own brother, the first defendant, said the account was
hers. It was contended on behalf of the plaintiff
that together the
siblings were managing the account. That contention appears to have
substance.
[64] As regards the
truck, she testified that the first defendant told her that he wanted
to sell the Volvo FH12 truck because it
made no sound economic
proposition keeping it. This version sharply contradicted the
version of the first defendant. It will be
recalled that according
to the first defendant the collapse of his business was occasioned by
the Ixopo accident where a different
truck was involved. She stated
that she gave the first defendant permission to sell the truck
although it was not really hers but
his. This evidence contradicted
the evidence of the first defendant who stated earlier that the truck
was hers. Her denial appears
irreconcilable with her evidence soon
afterwards that she gave strict instructions, not an advice, a
request or a suggestion, but
strict instructions to the first
defendant to make sure that the cheque was good and that the bank had
cleared the funds before he
handed the vehicles over to the
purchasers. This goes to show that she had greater interest in the
truck than she is willing to
admit.
[65] As regards the
cheque the second defendant knew that it had been paid and that the
funds remained intact in the account for three
weeks. But she
denied, in her answers to rule 37(4) questions raised by the
plaintiff, that she and the first defendant had withdrawn
the
proceeds of the cheque for their personal purposes. The denial is in
conflict with an admission made on the pleadings. The
relevant
averment was made in the plaintiffâs declaration p. 8 paragraph
7.3.3 and not denied in the defendantsâ plea p. 23 paragraph
7.
Her concern and the strict instructions she gave to her brother about
the cheque are relevant here as well.
[66] As
regards the creditors, the second defendant testified that she wanted
to take out a bond. She applied to the plaintiff for
the facility.
She furnished the plaintiff with her financial statements. On the
strength of such financial information the plaintiff
granted her a
bond. She used the funds to buy the Volvo FH12 truck and two
trailers. The deal was financed by Stannic. These two
were her
major creditors. The financial statements she presented to Absa Bank
were admittedly false. She knew it and her bookkeepers
knew it. She
did so deliberately for the purpose of obtaining a bond. The balance
of the trailer account was also settled as per
confirmation letter
from Stannic dated 3 November 2003. The proceeds of the stolen
cheque were used to settle the truck account.
The contents of the
letter contradict the second defendantâs earlier allegation that
the truck belonged to the first defendant.
Notwithstanding her
denials the second defendant unduly benefited from the proceeds.
[67] As regards the
business enterprise, the second defendant asserted that the
enterprise was actually the business of the first
defendant. The
assets specified in the financial statements for the financial year,
which ended on 28 February 1999, were not hers
though referred to as
hers, but were the first defendantâs.
Vide
Bundle X p. 165 â 170. She emphatically denied any suggestion that
the business was a joint venture. However in the letter to
Absa Bank
dated 2 February 1999 Bundle X p. 178 she granted the signing powers
on the bank account of the enterprise to the first
defendant she
stated among others:
â
We
are going to deposit into the account â¦â¦â¦â¦â¦ and will need
him to collect cheques
on my
behalf
.â
This letter contradicted
her earlier denial that she never had anything to do with the
account. The second defendantâs involvement
in the business
affairs of the enterprise is further evidenced by the financial
statement which she admittedly signed in her capacity
as the
proprietor
of Superior Transport as well as the sworn statement by her brother
who declared that she authorised him to sell her truck and trailers
through the joint venture.
[68] The second defendant
was an untrustworthy witness. She was unimpressive. She
contradicted the version of the first defendant.
Her own testimony
was fraud with unsatisfactory aspects and serious discrepancies.
Wherever her evidence does not correspond with
the evidence of the
undisputed facts or common cause or the evidence of the plaintiffâs
witnesses, it cannot be accepted.
[69] The defendantsâ
defence is that the first defendant has on 11 April 2000, orally
requested the plaintiffâs employee, in the
person of Werner at the
plaintiffâs Welkom Branch, to clear the cheque and to carefully
approach the funds so deposited. It is
a further dimension of their
defence that the said Werner subsequently made a negligent
misrepresentation to the first defendant
in that he represented to
the first defendant that a special clearance had been done, that the
cheque was good and that the first
defendant was at liberty to use
the funds. In the circumstances the defendants pleaded that the
plaintiff was bound by its misrepresentation.
Furthermore they
pleaded that in view of such misrepresentation the plaintiff was in
breach of the alleged oral agreement.
[70] The defendants carry
the onus to prove the alleged negligent misrepresentation and the
alleged breach of the contract as set
out in their plea as amplified
by their further particulars thereto. The plaintiff was entitled to
lead evidence in rebuttal.
[71] The first question
which now arises is whether the defendants have, on a balance of
probability, proved that the plaintiff had
made such
misrepresentation to the first defendant at the First National Bank
in Welkom on 11 April 2000. During the trial the first
defendant
conceded that the plaintiff never had an employee by the name of
Werner at the Welkom Branch, working with special clearance
of the
cheques at any times relevant to the dispute. In the light of this
concession the answer to the question inevitably must
be negative.
Therefore my finding is that the defendants have failed to prove on a
balance of probability that the plaintiff made
a negligent
representation to the first defendant as alleged.
[72] The second question
is whether the defendants have proved on a balance of probabilities
that a contract was concluded between
them and the plaintiff in terms
of which the plaintiff was obliged to effect a special clearance of
the cheque. Naturally the critical
connective tissue is missing.
The Werner factor was the foundation of the defensive averment. Once
again, in view of the material
concession made by the defendants as
regards the said gentleman, the answer to the second question cannot
be otherwise but in the
negative. Consequently, my finding is that
the defendants have failed to prove any contract. It follows from
this finding that
the plaintiffâs alleged breach does, therefore,
not arise.
[73] In the case of
ABSA
BANK LTD v SWISA
1996
CLD 522 (W)
the court held that there was no reason to hold that the bank was not
entitled to recover the sum claimed from the defendants. The
court,
however, also held that is was obviously open to a bank and its
customer to agree or to arrange that the bank and not the
customer
would bear the risk of a dishonoured cheque in the circumstances
where a customer has drawn against an uncleared effects.
[74] In the instant case
I am not dealing with an uncleared effects. I am dealing with a
situation where a cheque was deposited on
10 April 2000, where no
special clearance was requested at the time the cheque was deposited,
and where the normal holding period
ran its full ordinary course of
fourteen days and where the proceeds of the stolen cheque were
withdrawn not before but after the
ordinary holding period had
expired. Therefore this is not a situation where the bank has
allowed the defendant or its customer
to prematurely draw against
uncleared effects.
[75] The
standard application form which embodies normal terms, conditions,
procedures and practices in connection with cheque accounts
provides
among others:
that instruments
delivered by the customer to the bank for collection shall be made
available as cash only after payment thereof
by the drawee bank;
provided that the bank in its own discretion, may allow withdrawal
against uncleared effects;
that the bank does not
accept responsibility to ensure that a customer has lawful title to
the instruments handed in for the bank
to collect on behalf of such
a customer.
[76] The aforesaid
document does not contain any term to the effects that the plaintiff
would bear the risk of a dishonoured cheque
in the circumstances
where a customer has withdrawn against such a cheque after the
ordinary fourteen day holding period has expired
and the normal hold
on the cheque had been lifted by the effluxion of time. It is
significant to bear in mind that the evidence
of Fourie and Hartmann
that once a cheque is deposited into the system without the requisite
special clearance request, the special
clearance cannot be done
afterwards. So even if the first defendant did approach the
plaintiff on 11 May 2000 in connection with
a cheque deposit made a
day earlier, the request for special clearance would have been
belated and nothing could have been done to
accede to a request for
special clearance. Moreover the spin report also showed there was no
such a request recorded.
[77] In
BURG
TRAILERS SA (PTY) LTD AND ANOTHER v ABSA BANK LTD AND OTHERS
2004 (1) SA 284
(SCA)
at
290 B Harms J.A. said about the legal position:
ââ¦â¦
if
it should transpire that a cheque, after having been cleared, was
forged would the banker nevertheless be obliged to pay according
to
the credit entry raised by it? That cannot be so. The bank would be
entitled to reverse the entry.â
See
also
STANDARD
BANK OF SOUTH AFRICA LTD v ONEANATE INVESTMENTS (PTY) LTD (IN
LIQUIDATION)
[1997] ZASCA 94
;
1998 (1) SA 811
(SCA)
at
823 B âC.
The
same holds true where a stolen cheque is involved.
[78] In
my view the plaintiff has succeeded in proving on a balance of
probability that the second defendant signed a standard application
form for the purpose of opening a cheque account - which document
contained the same terms and conditions as the example appearing
in
Bundle X p. 1 â 12. I accept the document as the best secondary
evidence available since the actual original document is lost.
[79] I found Fourie, D.J.
Venter, Claassen and Hartmann in addition to Louw and E.T. Venter
impressive and trustworthy witnesses.
No serious critique could be
levelled against their testimonies. I accept their evidence. There
is no need to evaluate them individually.
[80] In the circumstances
I have come to the conclusion:
that the defendants were
not entitled to the proceeds of the cheque in the amount of R1 228
167,60 which was deposited into their
account at Centurion Branch of
Absa Bank on 11 April 2000;
that the plaintiff is
lawfully entitled to reverse the credit passed on the account in the
aforesaid amount and
that the plaintiff was
indeed entitled to claim and recover the full amount of the cheque
from the defendants;
that since the full
proceeds of the cheque have been withdrawn from the account and
appropriated for the defendants benefit, the
plaintiff is entitled
to reclaim it from the defendants, jointly and severally, the one
paying the other to be absolved.
[81] In clause 10 of the
standard agreement, it was agreed that should the bank bring any
legal proceedings against the customer for
the recovery of any monies
which a customer may owe to the bank, the customer shall on demand
pay to the bank all the legal costs
on an attorney and client scale.
I can see no reason why that provision should not be enforced. The
case merits such a special
cost order.
[82] In the premises I
give judgment in favour of the plaintiff against the defendants,
jointly and severally, the one paying the
other to be absolved, for:
The payment of the
amount of R1 228 167,60;
The interest thereon at
the rate of 15,5% p.a. from 10 April 2000 to date of final payment;
The cost of the action
on the scale as between attorney and client;
The costs shall include
the costs occasioned by the employment of two counsels as well as
the qualifying fee of the plaintiffâs
expert witness, Mr. A.B.
Fourie.
______________
M.H. RAMPAI, J
On behalf of the
plaintiff: Adv. D.E. van Loggerenberg S.C.
With
him Adv J. Malan
Instructed
by:
Routledge-Modise
p.a. McIntyre & Van
der Post
BLOEMFONTEIN
On behalf of the
defendants: Attorney Piet Nel
Instructed by:
The
Justice Centre
BLOEMFONTEIN
/spieterse