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[1995] ZASCA 127
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Loomcraft Fabrics CC v Nedbank Ltd and Another (70/94) [1995] ZASCA 127; 1996 (1) SA 812 (SCA); [1996] 1 All SA 51 (A); [1996] 1 All SA 51 (A) (17 November 1995)
Case No 70/94 /mb
IN THE SUPREME COURT OF SOUTH
AFRICA
(APPELLATE DIVISION)
In the matter of:
LOOMCRAFT FABRICS CC
APPELLANT
and
NEDBANK LTD
FIRST RESPONDENT
PERFEL PEREIRA AND FERREIRA LDA
SECOND RESPONDENT
CORAM
: CORBETT CJ, HEFER, NESTADT, HARMS JJA et
SCOTT AJA
HEARD
: 15 SEPTEMBER 1995
DELIVERED
: 17 NOVEMBER 1995
JUDGMENT
SCOTT AJA/
...
2
SCOTT AJA
:
On or about 20 February, 1992, the
appellant entered into an agreement of sale with the second respondent for the
purchase of a quantity
of voile fabric. The appellant carries on business in
South Africa as a distributor of fabric. The second respondent, to which I
shall
refer as "Perfel", is a textile manufacturing company of Portugal. The purchase
price of US$149,971-25 f o b was to be paid
by way of a letter of credit.
Pursuant to the agreement the appellant instructed the first respondent
("Nedbank") to open an irrevocable
letter of credit in favour of Perfel. The
credit was transmitted by Nedbank to Perfel's bank in Lisbon which served as an
advising
bank only. The credit made provision for deferred payment, ie 90 days
after the date of the bills of lading, and for two bills, out
of a set of three,
to be included in the documents which had to be presented as a pre-condition of
payment. The latest date for shipment
of the goods was
3
stated in the credit to be 20 April 1992. The expiry date was 30 April
1992. Perfel indicated, however, that it would be unable to
manufacture the
fabric in time and by agreement the credit was amended by extending the expiry
date from 30 April to 18 May 1992
and the latest date of shipment from 20 April
1992 to 8 May 1992. The goods arrived in Durban on 18 June 1992, and were
presumably
received by the appellant in Johannesburg shortly thereafter. The
date of their arrival was later than the appellant had expected.
The appellant
was also not satisfied with their quality.
On 4 August 1992, the appellant launched an application as a matter of
urgency in the Witwatersrand Local Division for an interdict
restraining Nedbank
from making payment in terms of the credit together with other ancillary relief.
It alleged that the bills of
lading presented to Nedbank for payment contained a
fraudulent misrepresentation as to the date of shipment. I shall refer in more
detail to the allegations of fraud
4
later in this judgment. The application was opposed by Perfel but pending
finalisation of the matter certain interim relief was granted
to the appellant.
Nedbank took up the attitude that it would honour the credit unless restrained
from doing so by an order of court.
In due course Perfel filed opposing papers
together with a counter-application in which it sought an order directing
Nedbank to make
payment in terms of the letter of credit. After hearing
argument, Leveson J on 30 December 1992 dismissed the main application and
set
aside the interim relief granted on 4 August 1992. The appellant was further
ordered to pay the costs of Perfel as well as those
of Nedbank which had
appeared to protect its interests. The present appeal is against the judgment of
Leveson J including the order
as to costs. Subsequent to the noting of the
appeal the appellant petitioned this Court for leave in terms of s 22 of the
Supreme
Court Act 59 of 1959 to have further evidence received in the form of an
affidavit or alternatively to have
5
the matter remitted to the Court a
quo
for further hearing. Before
dealing with the petition I shall consider the merits of the appeal on the basis
of the papers that were
before the Court a
quo
.
The system of irrevocable documentary credits is widely used for
international trade both in this country and abroad. Its essential
feature is
the establishment of a contractual obligation on the part of a bank to pay the
beneficiary under the credit (the seller)
which is wholly independent of the
underlying contract of sale between the buyer and the seller and which assures
the seller of payment
of the purchase price before he parts with the goods
forming the subject matter of the sale. The unique value of a documentary
credit,
therefore, is that whatever disputes may subsequently arise between the
issuing bank's customer (the buyer) and the beneficiary under
the credit (the
seller) in relation to the performance or for that matter even the existence of
the underlying contract, by issuing
or confirming the
6
credit, the bank undertakes to pay the beneficiary provided only that
the
conditions specified in the credit are met. The liability of the
bank to the
beneficiary to honour the credit arises upon presentment
to the bank of the
documents specified in the credit, including typically a set of bills of
lading,
which on their face conform strictly to the requirements of
the credit. In
the event of the documents specified in the credit being so presented,
the
bank will escape liability only upon proof of fraud on the part of
the
beneficiary. This "established exception" to the bank's liability
was
formulated by Lord Diplock in
United City Merchants (Investments)
Ltd
and others v Royal Bank of Canada and others
[1982] 2 All ER 720
(HL)
at 725 g as follows:
"... where the seller, for the purpose of drawing on the credit,
fraudulently presents to the confirming bank documents that contain,
expressly
or by implication, material representations of fact that to his (the seller's)
knowledge are untrue."
The autonomous nature of the obligation owed by the
bank
7
(whether the issuing bank or, if there is one, the confirming bank) to
the
beneficiary under a credit has been stressed by courts both in
South Africa
and overseas. (As to the former, see for example,
Phillips and Another
v
Standard Bank of South Africa Ltd and Others
1985 (3) SA 301
(W);
Ex
Parte Sapan Trading (Pty) Ltd
1995 (1) SA 218
(W) at 224 I - 225
G.) An
interdict restraining a bank from paying in terms of a credit
will
accordingly not be granted at the instance of the buyer (the
bank's
customer) save in the most exceptional cases. The approach of the
courts
with regard to such an interdict was stated by Kerr J in
R D
Harbottle
(Mercantile) Ltd and another v National Westminster Bank Ltd and
others
[1977] 2 All ER 862
(QB) at 870 b - d to be as follows:
"It is only in exceptional cases that the courts will interfere with the
machinery of irrevocable obligations assumed by banks. They
are the life-blood
of international commerce. Such obligations are regarded as collateral to the
underlying rights and obligations
between the merchants at either end of the
banking chain. Except possibly in clear cases of fraud of which the banks have
notice,
the courts will
8
leave the merchants to settle their disputes under the contracts by
litigation or arbitration as available to them or stipulated in
the contracts.
The courts are not concerned with their difficulties to enforce such claims;
these are risks which the merchants take.
In this case the plaintiffs took the
risk of the unconditional wording of the guarantees. The machinery and
commitments of banks
are on a different level. They must be allowed to be
honoured, free from interference by the courts. Otherwise, trust in
international
commerce could be irreparably
damaged."
This statement of principle was expressly
approved by Browne LJ in
Edward Owen Engineering Ltd v Barclays Bank International Ltd
[1978]
1 All ER 976
(CA) at 983. The importance of allowing banks to
honour
their obligations under irrevocable credits without judicial interference
has
been repeatedly stressed in subsequent cases. In
Intraco Ltd v
Notis
Shipping Corporation (The "Bhoja Trader
") [1981] 2 Lloyd's Rep
256
(CA) Donaldson LJ, after upholding the refusal of the court below
to
interfere with the seller's right to call upon a bank to make payment
under
its guarantee where fraud was not involved, observed at 257:
9
"Irrevocable letters of credit and bank guarantees given in circumstances
such that they are the equivalent of an irrevocable letter
of credit have been
said to be the life blood of commerce. Thrombosis will occur if, unless fraud is
involved, the Courts intervene
and thereby disturb the mercantile practice of
treating rights thereunder as being the equivalent of cash in
hand."
Lord Denning MR in
Power Curber International
Ltd v National Bank of
Kuwait SAK
[1981] 3 All ER 607
(CA) at 613b sounded a similar
warning:
"No foreign seller would supply goods to that country on letters of credit
because he could no longer be confident of being paid.
No trader would accept a
letter of credit issued by a bank of that country if it might be ordered by its
courts not to pay."
In
Bolivinter Oil SA v Chase
Manhattan Bank, Commercial Bank of Syria
and General Company of Horns Refinery
[1984] 1 Lloyd's Rep 251
(CA)
at 257 Donaldson MR pointed out that the granting of an interdict
against
a bank at the instance of a dissatisfied customer served to undermine
not
only the value of irrevocable credits but also the reputation of the
bank:
10
"If, save in the most exceptional cases, he (the bank's customer) is to be
allowed to derogate from the bank's personal and irrevocable
undertaking, given
be it again noted at his request, by obtaining an injunction restraining the
bank from honouring that undertaking,
he will undermine what is the bank's
greatest asset, however large and rich it may be, namely its reputation for
financial and contractual
probity. Furthermore, if this happens at all
frequently, the value of all irrevocable letters of credit and performance bonds
and
guarantees will be undermined."
(See also
Deutsche Ruckversicherung AG v Walbrook Insurance Co
Ltd
and others
[1994] 4 All ER 181
(QB) at 194 -195 and
the authorities there
cited.)
Nonetheless, it is now well established that a court will
grant
an interdict restraining a bank from paying the beneficiary under a
credit
in the event of it being established that the beneficiary was a party to
fraud
in relation to the documents presented to the bank for payment. For,
as
was observed by Lord Diplock in the
United City Merchants
case,
supra
.
at 725j:
11
"'... fraud unravels all'. The courts will not allow their process to be
used by a dishonest person to carry out a
fraud".
But the fraud on the part of the
beneficiary will have to be
clearly established.
Tukan Timber Ltd v Barclays Bank PLC
[1987]
1
Lloyd's Rep 171 (QB) at 175. The onus, of course, remains the
ordinary
civil one which has to be discharged on a balance of
probabilities but as in
any other case where fraud is alleged, it will not lightly be inferred.
See
Gates v Gates
1939 AD 150
at 155;
Gilbey Distillers &
Vintners (Pty) Ltd
and Others v Morris N O and Another
1990 (2) SA 217
(SE)
at
226A.
Before turning to deal with the set of bills of lading
issued in
the present case and the alleged fraudulent misrepresentation, it
is
necessary to revert to the letter of credit in order to set out, and
where
appropriate, comment on the terms which are relevant.
The provisions of the letter of credit include the following:
12
"transshipment : ALLOWED
on board/disp/taking charge : ANY MAIN PORT IN
PORTUGAL
for transportation to : JOHANNESBURG VIA
DURBAN
RSA
latest date of shipment : 920420 (20 April 1992)"
As
previously indicated, the "latest date of shipment" was
subsequently
changed to 8 May 1992.
The description in the credit of the goods which formed
the
subject matter of the sale contains a statement to the effect that they
were
to be transported:
"IN (A) 20 FT CONTAINER BY CONFERENCE AS PER LETTER DATED 20 FEB
1992"
The letter referred to does not form part of the
documents placed before the
Court a
quo
, but it appears from the papers, and was not in
dispute, that the
words "by conference" referred to a conference line vessel which in
the
13
context of the present case meant any carrier which was a member of
the
South African European Container Service ("SAECS").
The letter of credit also sets out the documents which
were
required to be presented as a
prerequisite for payment. These included:
"2/3 CLEAN NEGOTIABLE COMBINED TRANSPORT DOCUMENTS MADE OUT TO ORDER OF
APPLICANT NOTIFY
TRANSKIP PTY LTD P O BOX 174 BEDFORDVIEW 2008 RSA MARKED FREIGHT
COLLECT."
Finally, the letter of credit in
its penultimate paragraph stated
the credit to be:
"SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS 1983
REVISION ICC PUBLICATION 400 AND IS HEREBY OPERATIVE."
(I shall refer to this document as "the UCP".)
It is clear from the terms of the credit that the
presentation of
what is referred to in the UCP as a "marine bill of lading" was not
required.
This is also apparent from the appellant's written application to Nedbank
for
14
the opening of the credit. The request which was expressed to be for a
letter of credit "subject to the (UCP)", required the documents
which had to be
presented for payment in terms of the credit to include a "Full set of
negotiable Combined transport documents",
as opposed to a "Full set of clean on
board marine Bills of Lading" which was indicated as not being required. The
choice which the
appellant was required to exercise when making the request was
in effect a choice between the combined transport document referred
to in
Article 25 of the UCP and the marine bill of lading referred to in Article
26.
The combined transport document is a product of the advances made in
transport technology in more recent times. It is intended to
be what has been
described as a "start-to-finish" document and to make it unnecessary to issue
separate documents for every stage
in the carriage of goods involving more than
one stage, known as multimodal or combined
15
transport. This form of transport today plays a major role in the
international transport of goods and is effected largely by the
use of
containers. Their obvious advantage in multimodal transport is that if the goods
have to be carried, say, first by land, then
by sea, and again by land, they
will travel in the same container from start to finish with an obvious saving in
labour and costs.
By issuing a combined transport document the carrier, or the
"combined transport operator" as he is frequently called, accepts full
responsibility for the performance of the combined transport. The advantage of
this method of transport to an exporter is that it
will ordinarily permit him to
send his goods to the nearest container loading depot. These depots, or
"container freight stations"
as they are called, are situated in most major
industrial centres. See generally: Schmitthoff
Schmitthoff's Export
Trade
:
The Law and Practice of International Trade
9 ed 609 -
615.
16
A further consequence of this development in the transport of goods has
been the division of bills of lading into two kinds: the traditional
ship bill
of lading, and the combined transport kind. See Gutteridge and Megrah
The Law
of Bankers' Commercial Credits
7 ed at 126. This distinction is embodied in
the UCP.
As indicated above, the transport document required in
the
present case is one which falls within
the ambit of Article 25. The relevant
part of the article reads as
follows:
"Unless a credit calling for a transport document stipulates as such
document a marine bill of lading (ocean bill of lading or a bill
of lading
covering carriage by sea), or a post receipt or certificate of
posting:
(a) banks will, unless otherwise stipulated in
the credit, accept a transport document which: (i) appears on its face to have
been
issued by a named
carrier, or his agent, and (ii) indicates dispatch or taking in charge of
the goods, or
loading on board, as the case may be, and (iii) consists of the full set
of originals issued to the consignor if issued in more than
one original,
and
17
(iv) meets all other stipulations of the credit.
(b) Subject to the above, and unless otherwise stipulated in the credit,
banks will not reject a transport document
which:
(i) bears a title such as 'Combined transport bill of lading', 'Combined
transport document', 'Combined transport bill of lading or
port-to-port bill of
lading', or title or a combination of titles of similar intent and effect,
and/or
(ii) indicates some or all of the
conditions of carriage by reference to a source or document other than the
transport document itself
(short form/blank back transport document),
and/or
(iii) indicates a place of taking in charge different from the port of
loading and/or a place of final destination different from
the port of
discharge, and/or
(iv) relates to cargoes such as those in Containers or on pallets, and
the like, and/or
(v) contains the indication 'intended', or similar qualification, in
relation to the vessel or other means of transport, and/or the
port of loading
and/or the port of discharge.
(c)
18
(d) "
In the context of the present
case, it follows that where a credit calls for a combined transport document and
the other stipulations
of the credit are met, a bank will accept a transport
document which (i) appears to have been issued by a named carrier or his agent;
(ii) indicates a taking in charge of the goods and (iii) consists of a full set
of originals issued to the consignor. Subject to
the other stipulations of the
credit, the bank may not reject the transport document because it indicates a
place of taking in charge
different from the port of loading (cf
Halsbury's
Laws of England
4 ed Reissue Vol 3(1) para 268).
Against this background I turn to the bills of lading issued in the
present case. (A set of three bills was issued but for convenience
I shall refer
to the bill in the singular.) It was on a SAECS printed form bearing the heading
"BILL OF LADING FOR COMBINED TRANSPORT
19
SHIPMENT OR PORT TO PORT SHIPMENT". The carrier was stated to be
Compagnie Generale Maritime which, it was accepted by counsel, was
a member of
the SAECS. The place of receipt (stated to be applicable only when the document
is used as a combined transport bill
of lading) was given as "LEIXOES CY", the
letters CY standing for container yard. The vessel and voyage number were given
as "Nuova
Europa 219" and the port of loading, "Lisbon". The space on the
printed page for the insertion of a description of the goods proved
insufficient
and a second printed page identical to the first was used to complete the
description of the goods. The particulars
to which I have referred were again
filled in on page 2. The only difference related to the box at the foot of the
page which makes
provision for the insertion of the place and date of issue of
the bill and, below a horizontal line dividing the box into two, the
signature
of the person signing the bill on behalf of the carrier. The box that
was
20
completed was the one on page 2. In the upper section of the box the
place
and date of issue were given as "Leixoes, 08 May 1992". It
appears from
he photo-copy of the original bill which forms part of the papers that
the
document was stamped partly over the upper section of the box
with a
round seal bearing the words "correction approved" and what
would seem
to be the letters "C.G.M.". In the lower section of the
box are printed the
words:
"IN WITNESS of the contract herein contained the number of originals stated
opposite have been issued, one of which being accomplished
the others to be
void."
There is a space beneath these words followed by
the printed words "For
the Carrier". The bill was signed by one Victor Teixeira whose
signature
appears immediately below the words "For the Carrier". The words
"ACTUALLY ON BOARD" are stamped in the space immediately above
the words "For the Carrier".
21
The appellant's case, as made out in its founding papers, was that the
goods could not have been actually on board the "Nuova Europa"
on 8 May 1992 in
Lisbon as indicated by the bill of lading because that vessel did not call at
Lisbon in the course of voyage 219.
It was alleged that the goods had been
loaded on board another vessel, the "Europa", on 30 May 1992 and taken to
Barcelona where
they were transshipped onto the "Nuova Europa" on 2 June 1992.
It was further alleged that Perfel had "procured" the issuing of the
fraudulent
bill of lading in order to create the impression that it complied with the
requirement of the letter of credit that the
goods be shipped on board a vessel
by not later than 8 May 1992. The contention that this is what was required by
the credit was
fundamental to the allegation of fraud in so far as the notation
"Actually on board" was concerned. The appellant in its replying
affidavits
altered its stance somewhat as to what had actually transpired. It no longer
contended that
22
the goods had been transshipped at Barcelona but averred instead that
they had been loaded on board the "Nuova Europa" in Lisbon on
12 May 1992 in the
course of her northbound voyage no 175 to La Spezia, Italy, and from there
carried on her southbound voyage no
219 to Durban. It alleged that the reference
to voyage 219 on the bill of lading was a fraudulent misrepresentation to which
Perfel
was also a party.
The allegations of fraud were denied by Perfel. Initially, and presumably
because the application was brought as a matter of urgency,
an answering
affidavit deposed to by Perfel's attorney in South Africa was filed together
with a short confirmatory affidavit deposed
to by Perfel's managing director, Mr
Pereira. Subsequently, a further and more comprehensive affidavit by Mr Pereira
was filed. The
explanation which was given in these affidavits for the notation
"Actually on board" is the following. It was alleged that Leixoes
is a main port
in northern Portugal
23
and the closest port to Perfel's principal place of business at
Santo-Tirso. The affidavits, it should be noted, contain no details
as to the
precise whereabouts of Leixoes. (Further information is given in the affidavit
filed in response to the petition.) It appears,
however, from the description
which Mr Pereira gives of the use which Perfel customarily makes of Leixoes for
exporting goods when
multimodal transport is permitted that it was not intended
to allege that Leixoes is anything other than a container depot, or container
freight station. It was explained that on 7 May 1992 the goods were delivered at
Leixoes where they were cleared by customs and taken
in charge by the carrier's
agents. The following day they were railed from Leixoes to Lisbon which, it was
contended, was permissible
in terms of the multimodal form of transport
authorised in terms of the letter of credit. On 12 May the goods were loaded on
board
the "Nuova Europa" at the port of Lisbon. The following day, ie 13 May
1992, the carrier's
24
agents stamped the date on the bills and also added the notation
"Actually on board", as by then the goods were indeed on board. Subsequently,
it
was noticed that the endorsement was not correct as the goods had been delivered
to the carrier at Leixoes on 7 May 1992 and that
the bills required correction.
The carrier's agents corrected the date and stamped "correction approved" on the
bills in the manner
previously described. It was alleged that "unfortunately"
and "in error" the words "Actually on board" were not deleted. In support
of
this explanation it was contended on behalf of Perfel both in the affidavits and
in argument that as the letter of credit did
not require shipment of the goods
on board a vessel there was no reason for Perfel to be a party to any fraudulent
misstatement to
this effect.
It is apparent from the aforegoing that underlying the appellant's
allegation of fraud in relation to the notation "Actually on board"
is the
contention that the credit required the goods to be shipped on board
25
a vessel by not later than 8 May 1992. Underlying Perfel's explanation,
on the other hand, is the contention that Leixoes is a "main
port in Portugal"
within the meaning of the credit and that having regard to the multimodal form
of transport authorised by the credit,
actual shipment on board a vessel was not
required. This issue, of course, involves the proper construction of the letter
of credit.
Certain features of the explanation tendered by Perfel are admittedly
less than satisfactory. It is not clear when and where the bills
were signed or
why, if the carrier took charge of the goods at Leixoes, the bills were not
issued to Perfel at that stage. Much of
the explanation is couched in the
passive and no details are given, for example, as to who noticed the error and
at what stage. Nor
is it quite clear when Perfel subsequently discovered that
the words "Actually on board" had in error not been deleted. As previously
indicated, no details are given as to the precise
26
whereabouts or status of Leixoes. There is merely an assertion that it is
"a main port in northern Portugal". If it is not - and this
allegation is denied
by the appellant - it would, of course, be in the interests of Perfel for the
bills of lading to show that the
goods were in any event actually on board the
vessel at the port of Lisbon by 8 May 1992.
On the other hand, the explanation is supported by a photocopy of a
customs document annexed to the papers which indicates that the
goods were
cleared at Leixoes on 7 or 8 May 1992. (The document is dated 7 May 1992 but is
stamped 8 May 1992.) The photocopy of
the bill of lading annexed to the
appellant's papers also bears the "correction approved" stamp to which reference
has been made.
Furthermore, the bills clearly specify Leixoes (which is
indicated as a container yard) as being the place of receipt of the goods
while
Lisbon is specified as the port of loading. If Leixoes, as suggested, is inland
and some distance from Lisbon,
27
the goods could not have been on board the "Nuova Europa" when the bills
were issued at the place of receipt, ie Leixoes on 8 May
1992, which is what the
bills would appear to indicate. This suggests an error rather than
fraud.
As far as the alleged fraudulent misrepresentation in respect
of the voyage number is concerned, there is nothing in the papers to
suggest
that Perfel was in any way a party to this apparent misstatement. The bills of
lading were issued on behalf of the carrier
who was the appellant's agent. It
was at no stage suggested that the carrier was not a member of the SAECS and
hence not a carrier
within the class required by the letter of credit. Nor,
would it seem, did Perfel stand to gain anything by having the goods transported
in a vessel proceeding to Durban via La Spezia.
In order to succeed on the grounds of fraud, the appellant had to prove
that Perfel, acting through its agents, and with the purpose
of
28
drawing on the credit, presented the bills of lading to the bank knowing
that they contained material representations of fact upon
which the bank would
rely and which they (the agents of Perfel) knew were untrue (see the
United
City Merchants
case,
supra
, at 725 g). Mere error, misunderstanding
or oversight, however unreasonable, cannot amount to fraud (see
Rex v Myers
1948 (1) SA 375
(A) at 383). Moreover, as previously indicated, fraud will
not lightly be inferred, particularly when, I should add, it is sought
to be
established in motion proceedings. As far as the various disputes of fact are
concerned, it must not be overlooked that the
appellant sought a final order. To
succeed it accordingly had to show that it was entitled to an order on the basis
of the facts
alleged by Perfel together with the admitted facts in the
affidavits filed on its own behalf, subject only to any denial by Perfel
being
insufficient to raise "a real, genuine or bona fide dispute of fact" (see
Plascon-Evans Paints Ltd v Van Riebeeck Paints (Ptv) Ltd
1984
29
(3) SA 623 (A) at 634 E - 635 C). Having regard to the aforegoing, I am
unpersuaded that on the papers the appellant succeeded in
discharging the burden
of proving the falsity of the explanation given by Perfel in respect of the
notation "Actually on board" or,
in other words, that the bills of lading
contained a fraudulent misrepresentation. The explanation is, of course, tied up
with Perfel's
contention that Leixoes is "a main port in Portugal" within the
meaning of the credit and that contrary to the construction placed
by the
appellant on the words "latest date of shipment", the credit did not require the
goods to be actually loaded on board a vessel
by 8 May 1992. In order to
establish fraud, it was not enough to show that Perfel's contention was
incorrect. The appellant had to
go further and show that Perfel knew it to be
incorrect and that the contention was advanced in bad faith. For the purpose of
the
present inquiry, therefore, it is unnecessary to have to decide upon the
correctness or otherwise of the
30
different constructions sought to be placed on the credit by the parties.
It is sufficient to observe that it has riot been demonstrated
that in taking up
the attitude it did with regard to the interpretation of the credit, Perfel was
acting in bad faith.
Mr Sub el
. who appeared for the appellant, submitted in the
alternative that the construction which Perfel sought to place on the credit was
indeed incorrect in law and that accordingly once it was acknowledged that the
notation "Actually on board" was erroneous and the
words were to be ignored, it
followed that the bills did not conform with the requirement of the credit with
regard to the latest
date for shipment. He submitted that the explanation
offered by Perfel therefore did not assist it and that even in the absence of
fraud the Court a
quo
should have granted an interdict restraining
Nedbank from paying Perfel in terms of the credit.
The present case, of course, must be distinguished from
the
31
case in which the beneficiary in terms of a credit claims that he was
aware of the misstatement but believed it to be accurate and
was himself
deceived by it. (Cf the
United City Merchants
case,
supra
, at 725
j.) Perfel says in effect that the failure to delete the notation was an
oversight but that it was in any event immaterial
in so far as the bank's duty
to honour the credit was concerned. The argument advanced by
Mr Subel
in
the alternative was that the explanation, if true, showed that the bills did not
conform with the credit.
Whether Nedbank would be prepared to honour the credit or not would
depend, therefore, on whether it considers that even in the absence
of the
notation, the bills conform with the requirements of the credit. If on this
basis, it considers itself obliged to honour the
credit it is difficult to see
on what grounds the appellant could obtain an interdict against the bank
restraining it from doing
so. If Nedbank is wrong, the
32
appellant would have its ordinary contractual remedy against it. No case
was made out that the appellant would be unable to obtain
relief from Nedbank in
the event of the latter acting in breach of its contract with the appellant. It
is trite law that an applicant
for a final interdict must establish that there
is no other satisfactory remedy available to him. (See Erasmus,
Superior
Court Practice
E 8 - 7 and the authorities there cited.) Nor was any other
reason advanced why, in the absence of fraud, the Court a
quo
should have
been required to interfere with the freedom of the bank to decide for itself
whether to honour its credit or not. (See
the cases previously cited with regard
to the undesirability of a court restraining a bank from honouring its credits,
save in the
most exceptional circumstances.)
It follows that in my view the Court a
quo
was correct in
dismissing the application with costs.
33
No order was made by the Court a
quo
with regard to Perfel's
counter-application in which an order was sought directing Nedbank to make
payment in terms of the letter
of credit. The application consisted merely of a
notice of motion and no separate affidavits were filed in support of it. There
is,
however, no cross-appeal and it is unnecessary to have to consider the
matter further.
I turn finally to the petition. The affidavit which the appellant seeks
to have admitted is that of a Mr Jose Correia Esteves who
describes himself as a
former joint managing director, together with Mr Pereira, of Perfel. According
to the petition Mr Esteves
had certain discussions in 1994 with Mr Hompes (who
is the sole member of the appellant) which culminated in Mr Esteves divulging
the information set forth in his affidavit which was deposed to on 30 September
1994 in Johannesburg.
In summary, the allegations made by Mr Esteves are
the
34
following. He says that as a result of "differences" between himself and
Mr Pereira he resigned from Perfel in June 1994, ie after
the events relating to
the proceedings which form the subject matter of the appeal, and that it was he
who represented Perfel in
giving instructions to Perfel's attorneys of record.
He says that in consequence of a delay in production, the fabric ordered by
the
appellant was only loaded into a container at Perfel's premises a few days after
8 May 1992 and probably on 11 May 1992. Perfel's
forwarding agent then took
charge of the container and in due course furnished Perfel with "the original
bill of lading" for onward
transmission to its bankers. Mr Esteves says that he
and Mr Pereira then noted that the date reflected on the bill as the date of
issue was after 8 May 1992 and as this did not conform with the requirements of
the letter of credit, he, Esteves, personally instructed
the forwarding agents
to alter the date to read "8 May 1992". In an answering affidavit filed on
behalf of
35
Perfel, it is admitted that Mr Esteves played a major role in the
preparation
of Perfel's answering affidavits filed in the main
application and that the
subsequent departure of Mr Esteves from Perfel had been "less
than
amicable". For the rest, the allegations made by Mr Esteves are
strenuously denied.
In terms of s 22 of the Supreme Court Act of 1959 this
Court
is afforded a wide power to admit further evidence. Nonetheless it
has
been established in a series of decisions that in the interests of
finality
further evidence will be allowed only in special circumstances.
The
formulation of the test to be applied which is perhaps most often quoted
is
that of Holmes JA in
S v De Jager
1965 (2) SA 612
(A) at 613 C -
D:
"(a) There should be some reasonably sufficient explanation, based on
allegations which may be true, why the evidence which it is
sought to lead was
not led at the trial.
(b) There should be a
prima facie
likelihood of the truth of the
evidence.
36
(c) The evidence should be materially relevant to the outcome of the
trial."
While in the past the requirements
have not always been formulated in the
same words, the underlying
approach to the inquiry has been essentially the
same. In
Staatspresident en 'n Ander v Lefuo
[1990] ZASCA 6
;
1990 (2) SA 679
(A),
for
example, Vivier JA at 692 B formulated the requirements as
follows:
"Eerstens moet die applikant 'n redelik aanvaarbare verduideliking verskaf
waarom die getuienis nie by die verhoor van die saak gelei
is nie; tweedens moet
die betrokke getuienis van wesenlike belang in die saak wees en derdens moet dit
waarskynlik die uitslag van
die saak kan verander
..."
The apparent difference between the second
requirement in Holmes JA's
formulation and the third requirement in that of Vivier JA is of no
real
consequence. (The other two are essentially the same.) Whether there
is
a
prima facie
likelihood of the evidence being the truth or
whether it is
probable that the evidence will result in the outcome being
changed,
amounts in effect to the same inquiry. If there is no
prima facie
likelihood
37
of the evidence being the truth it must follow that it is improbable that
the evidence will cause the result to be altered.
In my view, the requirement, just mentioned has not been met in the
present case. My reasons are the following.
(1) Mr Esteves is a person who on his own admission is prepared to give
false instructions to his attorney with the object of misleading
the court. He
did this for no better reason than to ensure that the company of which he was
then a joint managing director received
payment for a consignment of fabric
which was being exported.
(2) Between the time of giving those instructions and the time of deposing
to the affidavit in question Mr Esteves left the employment
of Perfel as a
result of what he described as "differences" between himself and the remaining
managing director, Mr Pereira. In addition
38
to alleging that Mr Pereira was a party to a fraudulent tampering with
the date of the bills of lading, Mr Esteves found it necessary,
although
irrelevant to the present proceedings, to go further and suggest in his
affidavit that Mr Pereira had fraudulently sent
the appellant inferior quality
fabric. The possibility of Mr Esteves acting out of vindictiveness would seem in
the circumstances
to be a real one. (3) The allegation that the goods were
loaded into a container at Perfel's premises a few days after 8 May 1992
and
probably on 11 May 1992 is inconsistent with a photocopy of a customs document
annexed to the papers which was issued at Leixoes
and which bears a customs
stamp as well as a stamp reflecting both a serial number and the date, 8 May
1992. Mr Esteves makes no
reference to this document in his affidavit and
counsel for the appellant found himself
39
obliged to suggest that it must be a forgery. No attempt, however, has been
made to explain when, how and by whom it was forged.
(4) It appears from the affidavit of Perfel's attorney filed in response to
the petition that Perfel's premises are some 30 kilometres
from Leixoes which in
turn is about 350 kilometres from Lisbon. She makes the point which is not
without merit that had the goods
left Perfel's premises on 11 May 1992 it is
improbable that they could have been received at Leixoes, taken through customs,
railed
to Lisbon and loaded on board the Nuova Europa by 12 May
1992.
There are no other special
circumstances which would justify
the granting of the petition notwithstanding its failure to comply with
the
requirement considered above.
In the result the petition is refused and the appeal is
dismissed
40 with costs, including the costs of the petition.
D G SCOTT
CORBETT CJ )
HEFER JA ) - CONCUR
NESTADT JA )
HARMS JA )