Muller v BOE Bank Ltd and Others (8723/98) [2010] ZAWCHC 121; 2011 (1) SA 252 (WCC) ; [2011] 1 All SA 166 (WCC) (25 May 2010)

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[2010] ZAWCHC 121
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Muller v BOE Bank Ltd and Others (8723/98) [2010] ZAWCHC 121; 2011 (1) SA 252 (WCC) ; [2011] 1 All SA 166 (WCC) (25 May 2010)

REPORTABLE
(Paragraphs
21 to 50 only)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Case
No. 8723/98
In
the matter between:
ERIC
ANDRE MULLER
Plaintiff
and
BOE
BANK LIMITED
First
Defendant
BAREND
GERT STEYN DE WET N.O.
Second
Defendant
PAUL
DANEEL KRUGER N.O.
Third
Defendant
HARRY
KAPLAN N.O.
Fourth
Defendant
JUDGMENT
DELIVERED ON 25
th
DAY OF MAY 2010
BINNS-WARD
J:
[1]
The plaintiff, Mr Eric Andre Muller ('Muller'), issued summons in
this action on 29 June 1998. Muller was an insolvent at the
time.
1
The persons cited in the action as the second, third and fourth
defendants were the joint trustees of his insolvent estate. By
virtue
of the passage of time in the more than ten years that intervened
between the institution of the action and the commencement
of the
trial, Muller became automatically rehabilitated in terms of the
Insolvency Act during that period. The second, third and
fourth
defendants thus played no part in the trial.
[2]
The first defendant carried on business as Boland Bank Ltd at the
times most relevant to events connected to the claims in the
action.
The bank has subsequently been through a number of name and
organisational changes and is now subsumed in Nedbank Limited.
In
this judgment the bank shall be referred to, as convenient, simply as
'the bank', 'Boland Bank' or 'the defendant'.
[3]
Muller advanced four claims in the action. They were labelled as
claims A, B, C and D, respectively. Claims A, B and C arose
out of,
or were related to an agreement concluded between Muller and the bank
on 9 May 1988. At the commencement of the trial,
after listening to
the opening address by the plaintiff's counsel, I made a ruling in
terms of rule 33(4) directing that certain
issues be determined
separately from, and before, the remaining matters arising from the
pleadings. I furnished my reasons for
making the ruling at the time.
It is unnecessary to rehearse them, save in respect of claim D, which
I shall do at the end of this
judgment.
[4]
It is convenient to presage the identification of the issues already
settled and those falling to be determined in this judgment
with a
summary of the salient features of the agreement which gave rise to
them. The deed of agreement is entitled
'Sale',
but
it is clear that it in fact recorded a composite agreement dealing
with a number of related, yet discrete, matters.
[5]
The contract is not well-drafted and its import is by no means clear
in certain material respects. The apparent object to be
served by its
conclusion was set out in clauses 2.4.4 - 2.4.6. Clause 2 was
entitled
'Interpretation
and introduction'
and
set out various definitions and a recordal. Clauses 2.4.4 - 2.4.6
formed part of the recordal and went as follows:
'2.4.4. Boland
is the major creditor of the Muller Group;
2.4.5.
due
to the liquidity problems experienced by the Muller Group [and
Muller] the latter has found it difficult and, more recently,

impossible to meet its monthly payments to Boland;
2.4.6.
Boland has agreed in principle to purchase the shares, the claims and
the businesses from Muller [and the Muller Group] with
a view to
enable Muller to settle his debts to Boland as well as his other
creditors.'
(The
wording in square brackets did not appear in the executed deed of
agreement, but in its plea Boland Bank has contended for
it to be
read in as if the agreement were so rectified.
2
)
[6]
The agreement provides for the sale by Muller to Boland Bank of 'the
shares and the claims, and the assets of the businesses
as going
concerns, with effect from the effective date' (i.e. 1 May 1988).
The 'shares' were defined as meaning 'the entire issued
share
capital of SA Trucking, SA Trucking (Cape) and Transaf'. The latter
entities were in turn each defined as follows: 'SA
Trucking means SA
Trucking (Proprietary Limited, Registration No. 70/15464/07)'; 'SA
Trucking (Cape) means SA Trucking (Cape)
(Proprietary Limited,
Registration No 83/06544/07' and 'Transaf means Transaf (Proprietary
Limited, Registration No 66/12064/07'.
The 'claims' were defined as
meaning 'Muller's credit loan accounts in SA Trucking, SA Trucking
(Cape) and
Transaf'.
The 'assets' were defined as meaning 'the mechanical horses, trucks,
trailers and road transportation permits, all as
more fully
described in
Appendix
1
'.
3
[7]
The agreed purchase price was R12 million; allocated as follows: 'as
to the claims, the face value thereof; and as to the
businesses R2
450 000,00 as to the shares, the balance of the purchase price...'.
[8]
In terms of clause 3.1 of the agreement, the sale was expressed to
be '[S]ubject to [clause] 4'. Clause 4 provided, amongst
other
matters, that the purchase price was to be paid 'as and when
realisation of the Muller Group is effected and cash received
via
the realisation process in terms of [clause] 6'. Boland Bank
undertook to 'realise the assets in terms of [clause] 6 and
to
settle the Muller Group's liabilities as disclosed in the effective
date financial statements'. ('The Muller Group' was defined
as
meaning 'SA Trucking [as defined] and its subsidiaries SA Trucking
Cape [as defined], Transaf [as defined] and the businesses'.
'The
businesses' were defined as meaning 'the transportation
businesses conducted by Muller trading as SA Trucking and
TransSA'.
[9]
Reference to clause 6 shows that the intention was that Boland Bank
would dispose of the property purchased by it in terms
of the sale
provisions of the agreement and credit the proceeds generated
thereby to an account to be opened in its books called
the 'E A
Muller Realisation Account'. The relevant businesses that were, in a
sense, the subject matter of the sale were to continue
to operate
during the realisation period, which was contemplated to be
completed within three months of the date of the signature
of the
agreement. The realisation account was to be credited with the
proceeds 'realised on the sale of the assets by Boland'
and with the
income generated by the conduct of the business during the
realisation period. It was agreed that the realisation
account was
to be debited with (i) the purchase price; (ii) 'interest on R12 000
000....which interest [fell to] be calculated
monthly in arrears
during the realisation period at prime plus 2%...per annum on R12
000 000...less the amount realised by Boland
from the sale of the
assets during each month; (iii) the business expenses listed in
Appendix 3, which were to be checked daily
by 'the Boland
representative' and (iv) any other expenses which were 'directly
related to the sale of the assets, such as legal
and audit fees'.
[10]
Clause 6 further provided (in cl. 6.6) that on the 'completion date'
(defined as meaning the date on which the realisation
of the assets
was completed) the realisation account would be closed and any
surplus would be shared equally by Muller and Boland
Bank; whereas
any shortfall would be borne by Muller alone. Muller authorised the
bank to debit any such shortfall towards his
overdraft facility.
Clause 6.6 fell to be read with clause 4.4.3, which provided:
'It
is anticipated that the potential surplus due to Muller in terms of
6.6 from the
realisation
of the assets will be insufficient to settle Muller's liabilities.
Accordingly, after the completion date, Boland
agrees to grant
Muller a facility of a maximum of R2 500 000....to cover the
shortfall. As security for the repayment by Muller
of this facility
and any other amounts owing from time to time by Muller to Boland,
Boland shall be permitted to register first
Mortgage bonds over
[three identified immovable
properties].'
[11]
Clause 4.4.2 of the agreement provided:
'It
is recorded that Muller owes the Wadeville branch of The Standard
Bank of South
Africa
Limited approximately R3 000 000...Boland agrees that on signature
of this agreement by Muller it will grant Muller a facility
to pay
to pay to the Wadeville branch of The Standard Bank...the amount
owing by Muller against an undertaking by the
Wadeville
branch that all security held by it in respect of Muller's debt to
it will be ceded and/or transferred to Boland simultaneously
with
the payment of the debt.'
[12]
The executed deed of agreement was an amended version of an earlier
draft. The earlier draft had been signed by Muller on
30 April 1988,
but it was not counter-signed on behalf of the bank. According to
Muller, the executed version came about because
of certain changes
reportedly required by the bank. Muller testified he had not
concerned himself with the detail of these changes
when he signed
the executed version on 7 May 1988; he appears to have been
satisfied in this regard to be guided by a certain
Dr Charles
Ferreira - about whom more will be said presently.
[13]
Turning to the claims advanced by Muller in his summons: Claim A is
a claim for the rectification of the agreement. In this
respect he
seeks the deletion of clause 2.4.5 (which has been quoted above) and
the rectification of clause 3.4 to read:
'Muller
will prior to the effective date have paid all liabilities of SA
Trucking, the
subsidiaries,
SA Trucking (Cape) and Transaf other than those owed to Boland (if
any), so that Boland (and if applicable Muller)
will be their sole
creditor/s on the
effective
date'.
In
the signed contract, clause 3.4 provided:
'Muller
will prior to the effective date have paid all liabilities of SA
Trucking, the subsidiaries, SA Trucking (Cape) and Transaf
so that
Muller will be their sole creditor on the effective date.'
[14]
The significance of the rectification of clause 3.4 was essentially
bound up with the ambit of the meaning of the word 'liabilities'
in
clause 3.3 of the agreement, which provided:
'
Boland
hereby assumes all liabilities of SA Trucking, SA Trucking (Cape)
and Transaf as disclosed to Boland on 30 April 1988.'
(In
their heads of argument, the plaintiff's counsel characterised the
proper interpretation of clause 3.3 and 3.4 as being 'the
real issue
for determination' in this part of the trial. In amplification they
argued that '[t]he fundamental dispute relates
to the allocation of
the liabilities of SA Trucking (Pty) Limited in the sum of R5 245
496,09 and [of] Transaf (Pty) Limited
in the sum of R1 027 989,82 to
Plaintiff as recorded in the "Kritzinger letter" of 9 May
1988.' I shall explain the
role of the 'Kritzinger letter' in due
course.) It follows from this that even if clause 3.4 were to be
rectified as sought by
the plaintiff, there would be no point in
granting this relief if it were not to be accepted that in
consequencethereof the contract
would fall to be construed as
providing in terms of clause 3.3 thereof that Boland Bank undertook
to assume the debt owing to
itself; that is, in effect to write off
its claims against SA Trucking (Pty) Ltd and Transaf (Pty) Ltd.
[15]
Claim B was for the rendering of an account by Boland Bank in
respect of the realisation account; a debatement of such account
and
judgment for whatever amount might appear due to Muller as a
consequence of such debatement.
4
[16]
Claim C was for payment of the R12 000 000 purchase price. As
evident from what has already been described above, the payment
of
the purchase price was an integral feature of the operation of the
realisation account. It was therefore misdirected of the
plaintiff
to have advanced a claim for its payment, save as part of the
formulated claim B. This was recognised by the plaintiff's
counsel
during the trial; and the claim is therefore not persisted with as a
discrete claim.
[17]
I directed that claim D stand over for later determination.
[18]
Although the bank pleaded a denial of any entitlement by Muller to
an accounting in respect of the realisation process, this
defence
was abandoned (correctly, in my view) before the commencement of the
trial.
5
During the pre-trial procedures by way of discovery, the furnishing
of trial particulars and the exchange of expert witness summaries,
a
great deal of information about the realisation process became
available. When I indicated at the commencement of the trial
that if
Muller, notwithstanding the information thus provided, still
required a direction that a statement of account be rendered,
I
would hear and determine that issue as a preliminary question, and
separately from the remaining issues (cf
Doyle
and Another v Fleet Street Motors PE (Pty) Ltd
1971
(3) SA 760
(A) at 763), the plaintiff's counsel informed me that
Muller was content to proceed to the debatement stage on the basis
of the
information that he then had in his possession.
[19]
The parties were not, however, able to furnish me with a list of
issues to be dealt with in the contemplated debatement (see
Doyle,
supra,
at 763A). Absent such a list, I was not prepared to enter into the
debatement. There seemed to me in any event to beno
point in
spending time on a debatement if, as specially pleaded by the bank,
any money claims the exercise was intended to establish
and quantify
had been extinguished by prescription (cf.
Absa
Bank Bpk v Janse van Rensburg
2002
(3) SA 701
(SCA) at para. [14]).
[20]
The ruling made in terms of rule 33(4) went as follows:
'1.
In respect of Claims A to C in the combined summons, the following
issues shall be tried separately from, and before any
remaining
issues:-
1.1.
The Claim for rectification in terms of Claim A and in relation
thereto, whether the word 'liabilities' in clause 3.3 of
the
agreement, including
6
the liability of the entities mentioned therein - and also, to the
extent that might be relevant, their subsidiaries - to Boland
Bank;
1.2.
In the light of the determination of the claim for rectification,
the issue of the proper meaning of the agreement;
1.3.
Whether the First Defendant is liable to the Plaintiff in terms of
Claim C;
1.4.
Whether the Plaintiff's money claims in terms of Claims B and C have
been extinguished by prescription as contended in First
Defendant's
special plea.
The
Ferreira affidavit
[21]
During the course of the trial the bank sought to introduce in
evidence the content of an affidavit made by Dr Charles Griffiths

Ferreira. Dr Ferreira had passed away before the trial. The
defendant sought to introduce Ferreira's affidavit as evidence in

terms of s 34 the Civil Evidence Proceedings Act 25 of 1965;
alternatively, in terms of
s 3
of the
Law of Evidence Amendment Act
45 of 1988
. Muller opposed the admission of the affidavit into
evidence. It is appropriate to determine that issue first.
[22]
Section 34 of the Civil Evidence Proceedings Act provides as
follows:
34
Admissibility
of documentary evidence as to facts in issue
(1)
In any civil proceedings where direct oral evidence of a fact would
be admissible, any statement made by a person in a document
and
tending to establish that fact shall on production of the original
document be admissible as evidence of that fact, provided-
(a)
the
person who made the statement either-
(i)
had
personal knowledge of the matters dealt with in the statement; or
(ii)
where
the document in question is or forms part of a record purporting to
be a continuous record, made the statement (in so far
as the matters
dealt with therein are not within his personal knowledge) in the
performance of a duty to record information supplied
to him by a
person who had or might reasonably have been supposed to have
personal knowledge of those matters; and
(b)
the
person who made the statement is called as a witness in the
proceedings unless he is dead or unfit by reason of his bodily
or
mental condition to attend as a witness or is outside the Republic,
and it is not reasonably practicable to secure his attendance
or all
reasonable efforts to find him have been made without success.
(2)
The
person presiding at the proceedings may, if having regard to all the
circumstances of the case he is satisfied that undue
delay or
expense would otherwise be caused, admit such a statement as is
referred to in subsection
(1) as evidence in those proceedings-
a)
notwithstanding that the person who made the statement is available
but is not called as a witness;
b)
notwithstanding that the original document is not produced, if in
lieu thereof there is produced a copy of the original document
or of
the material part thereof proved to be a true copy.
(3)
Nothing in this section shall render admissible as evidence any
statement made by a person interested at a time when proceedings

were pending or anticipated involving a dispute as to any fact which
the statement might tend to establish.
(4)
A statement in a document shall not for the purposes of this section
be deemed to have been made by a person unless the document
or the
material part thereof was written, made or produced by him with his
own hand, or was signed or initialled by him or otherwise
recognized
by him in writing as one for the accuracy of which he is
responsible.
(5)
For the purpose of deciding whether or not a statement is admissible
as evidence by virtue of the provisions of this section,
any
reasonable inference may be drawn from the form or contents of the
document in which the statement is contained or from any
other
circumstances, and a certificate of a registered medical
practitioner may be acted upon in deciding whether or not
a
person is fit to attend as a witness.'
[23]
The provision falls to be read with the special definitions provided
in terms of s 33, and with s 35 of the Act, which, insofar
as
currently relevant, provides:
35
Weight
to be attached to evidence admissible under this Part
(1)
In estimating the weight, if any, to be attached to a statement
admissible as evidence under this Part, regard shall be had
to all
the circumstances from which any inference can reasonably be drawn
as to the accuracy or otherwise of the statement, and
in particular
to the question whether or not the statement was made
contemporaneously with the occurrence or existence of the
facts
stated, and to the question whether or not the person who made the
statement had any incentive to conceal or misrepresent
facts.
[24]
It seems to be firmly established that, subject to the exclusionary
provisions of s 34(3) of the Act, the court is obliged
to admit a
statement which complies with the criteria set out in s 34(1). In
the current matter, it is not in dispute that Dr
Ferreira played a
central role in the realisation process contemplated in terms of the
agreement between the plaintiff and the
defendant. It follows that
he would have had personal knowledge of the matters in connection
therewith, which are dealt with
at some length in the affidavit
allegedly made by him that the defendant seeks to introduce under
the provision. It is also not
in dispute that Dr Ferreira is
deceased.
[25]
The document that the defendant seeks to introduce is a photocopy of
the one actually signed by Dr Ferreira. The plaintiff
contends on
this basis that it is not the original document and that
accordingly, the requirements of s 34(1) have not been satisfied
in
this respect. I agree with the plaintiff's contention. In arriving
at that conclusion I have taken into account the decisions
which
have allowed that carbon copies and even roneod documents may be
regarded as duplicate originals. (See in this regard the
majority
judgments in
Lynes
v International Trade Developer Inc
1922
TPD 301
;
Da
Mata v Otto N.O.
1972
(3) SA 858
(A) at 866B-G and 881; and
Herstigte
Nasional Party van Suid Afrika v Sekretaris van Binnelandse Sake en
Immigrasie
1979
(4) SA 274
(T).) What is common to the documents accepted as
originals in those decisions is that they were all originally made
or executed
by the maker. A draft affidavit of which a number of
photocopies had been made before signature would, if more than one
of the
resulting documents was signed by the deponent, give rise to
multiple originals in the sense illustrated by the cases. But that

is not the case with a photocopy made of the one and only originally
executed and signed document, as was the case with the affidavit

made by Dr Ferreira.
[26]
Section 34(2) of the Civil Evidence Proceedings Act affords the
court a discretion to admit a copy of the document proven
to be a
true copy of the original or the part thereof relied upon if, having
regard to all the circumstances of the case, the
presiding officer
is satisfied (i) that undue delay or expense would otherwise be
caused and (ii) that the copy sought to be
introduced has been
proved to be a true copy of the original.
[27]
The evidence is that the affidavit in question was procured from Dr
Ferreira for the purpose of being produced at an enquiry
in terms of
the Insolvency Act into Muller's affairs. The affidavit was made for
the purposes of being produced in evidence at
the creditors' meeting
as a written statement of the nature contemplated by s 65(3) of the
Insolvency Act. For reasons which
are not apparent, the statement
was not introduced and Dr Ferreira was not questioned at all at the
meetings of creditors. It
is not known what has become of the
original. The evidence is that the original document, in the sense
of the document actually
signed by the deponent, rather than a
photocopy thereof, could not be located despite diligent search.
[28]
The plaintiff's counsel submitted that the discretion in terms of s
34(2) of the Civil Evidence Proceedings Act can be exercised
only if
the court is satisfied that the original document is still in
existence; and that any view on the undue delay or unreasonable

expense that would be attendant on its production can properly be
formed only if the court has some basis to know what theimpediments

to producing the extant original are. This indeed was the conclusion
of Devlin J, as he then was, in
Bowskill
v Dawson
1954
1 QB 288
,
[1953] 2 All ER 1393
, applying a closely equivalent
provision in the then subsisting English legislation.
7
[29]
The commentary in Schwikkard et al,
Principles
of Evidence
(Juta)
3ed, at 294, would appear, with reference to
Bowskill,
to
offer support, albeit expressed with discernible hesitancy, for the
plaintiff's counsel's submission. The authors draw attention
to
subsequent amendments to the English legislation which 'greatly
simplify' matters and take into account advances in modern

technology with regard to the generation and copying of documents.
8
In Zeffert & Paizes,
The
South African Law of Evidence,
2
nd
ed, LexisNexis (2009) at 421 it is suggested, however, that 'a court
might take the view that once the document is shown to have
been
lost, so that further search would involveundue or expense or delay'
a basis for the exercise of the discretion afforded
in terms of s
34(2) is established, thereby providing what the authors describe as
'a more practical meaning'. In Schmidt and
Rademeyer's
Bewysreg
(4de
uitgawe) Butterworths (2000), the opinion is expressed that it is
not yet certain that the South African courts will accept
the strict
literal approach in
Bowskill
v Dawson.
9
[30]
Devlin J noted in
Bowskill
that
he considered the conclusion to which he was driven on the meaning
of the English provision, and which afforded one of the
two quite
independent grounds upon which he excluded the copy tendered in that
matter, to be not 'altogether satisfactory'. It
was nevertheless one
which he concluded he was bound by the language to apply. In this
regard it is evident from the judgment
that two matters weighed
particularly with the learned judge. The first was that the
provision made admissible a document which
would not, in common law,
be admissible, and that therefore its wording had to be 'strictly
followed' (presumably in accordance
with the canon of interpretation
that the legislature is presumed not to intend to alter the existing
law any more than necessarily
follows from the words used in a
statute). The second was that the only qualification to the
production of the original document
permitted in terms of the Act
required that any copy that might be admitted had to be certified to
be a true copy. In this regard,
it bears noting that the provisions
of s 1(2) of the statute construed by Devlin J differed in small but
material respects from
its equivalent in s 34(2) of the South
African statute. Section 1(2) of the English statute (as quoted by
Devlin J at 1394B-C
of the All ER report) provided:
'In
any civil proceedings, the court may at any stage of the
proceedings, if having
regard
to all the circumstances of the case it is satisfied that undue
delay or expense would otherwise be caused, order that
such a
statement as is mentioned in sub-s. (1) of this section shall be
admissible as evidence....(b) notwithstanding that the
original
document is not produced, if in lieu thereof there is produced a
copy of the original document or of the material part
thereof
certified
to be a true copy in such manner as
may
be specified in the order or as the court may approve, as the case
may be
.'
(My
underlining.)
[31]
In my view the second of the considerations that weighed with Devlin
J was the more compelling one; and, with respect, on
its own, one
which, in the circumstances of that case, impelled the conclusion
reached by the learned judge. I shall therefore
treat of it first.
The requirement that the copy admitted had to be a certified true
copy suggests that, save in respect of an
instance in which the
tendered copy of the original had been brought into existence and
certified to be a true copy before the
loss or destruction of the
original (which was not the case in
Bowskill),
it
would be impossible, if the certifier could not have sight of an
extant original, to satisfy the requirement that the admitted
copy
be certified. In the former instance, that is where the true copy
had been certified as such before the loss or destruction
of the
original, the copy could be admitted if the court was prepared to
approve the manner in which it had been certified. In
the latter
instance, the court would give directions for the certification of
the copy - an exercise it would not undertake if
the original was
not available for inspection by the party to be empowered by the
order contemplated by the provision to do the
certification.
[32]
Section 34(2) of the South African statute has been quoted above. As
mentioned, the difference in wording between it and
s 1(2) of the
English statute under consideration in
Bowskill
is
material. There is no certification requirement. Instead all that is
required is that the copy in question be proved to be
a true copy.
There is no prescription of what evidence should constitute such
proof. It goes almost without saying that the measure
of proof would
be proof on a balance of probabilities.
[33]
In the current case it is not known what has become of the original
document. In the absence of any evidence that it has
been destroyed,
the party seeking to produce it could notionally be expected to
continue searching for it notwithstanding the
time and expense that
would be entailed in such an exercise. No cogent reason has been
suggested as to why the bank should in
the circumstances of this
case be required to do so. I am satisfied that it would cause undue
delay in all the circumstances
of the case if it were required so to
do.
[34]
It is unnecessary in the circumstances of this case to consider what
the position would have been if the evidence had shown
that the
original had been destroyed. What to make of the qualification with
regard to delay or undue expense that would undoubtedly
arise in
such a matter is a question for another case. It may well be that
consideration should be given to improving the South
African statute
along the lines of the 1995 English Civil Evidence Act.
10
[35]
Reverting to the first of the two aforementioned considerations that
weighed with Devlin J in
Bowskill.
With
respect, I do not find it persuasive; certainly not as it might be
suggested as being applicable to construing the South
African
legislation. It is s 34(1) that introduces an exception to the
common law. Section 34(2) allows exceptions to s 34(1)
- not to the
common law. There is, in my view, therefore no reason in principle
to apply a restrictive approach to the construction
of s 34(2). The
plain purpose of s 34 was to facilitate the introduction of
documentary evidence in the circumstances therein
stipulated. There
is no reason to adopt a consciously restrictive approach to the
implementation of the provision. Indeed such
an approach would seem
to run counter to the latitude expressly afforded in terms of s
34(5).
[36]
The issue of the caution with which documents admitted in terms of
the section might properly be treated and the weight to
be attached
to their content, being matters more centrally relevant to the
effect of the statutory departures from the common
law in the
enactment, are discretely provided for in s 34(3) and s 35 of the
Civil Evidence Proceedings Act. The argument that
a restrictive
interpretative approach to the section is indicated by reason of its
departure from the common law is further undermined
by the savings
provisions in s 38 of the Act. These make it clear that the
legislative intention was to afford an extension of
what the common
law permits, and not to alter it restrictively. To my mind a further
aspect that is relevant in construing s
34 of the Act is that it may
be inferred from a consideration of the Act as a whole, and Part VI
thereof in particular, that
the legislative intention was to broaden
the basis allowed by the common law for the admission of evidence.
It may reasonably
be inferred that this object must have been
regarded by the lawmaker as in the public interest; no doubt to
facilitate a less
technically hindered ventilation of issues,
thereby improving the ability of the parties to civil proceedings to
establish the
relevant facts, and concomitantly, that of the courts
to more justly decide civil cases.
[37]
If I have correctly surmised the object of the provisions, it would
be inconsistent with the fulfilment thereof to adopt
an especially
strict or limiting approach to their construction. (Cf.
Constantinou
v Frederick Hotels Ltd
[1965]
3 All ER 847
, in which Lord Denning MR, in the course of dealing
with a narrow question in terms of s 1(3) of the Evidence Act, 1938
- the
wording of which is followed exactly by s 34(3) of the Civil
Proceedings Evidence Act
-
made the general observation that the Evidence Act 'should be
liberally interpreted'.)
[38]
The next issue that requires determination is whether Dr Ferreira
was 'a person interested' in the sense of s 34(3). The
view commonly
expressed in the cases is that the concept should not be too
narrowly defined. Some of the relevant jurisprudence
was recently
reviewed in this court in
Trend
Finance (Pty) Ltd and another v Commissioner for SARS and another
[2005]
4 All SA 657
(C) at para. [40]. A person having a pecuniary or
proprietary interest in the outcome of the proceedings, or in
respect of whose
evidence it might be said that there was 'a real
likelihood of bias', would qualify as 'a person interested'. Of
course, a relevant
interest can only exist if the statement in
question was made when proceedings were instituted or anticipated.
[39]
I shall discuss Dr Ferreira's role in the relevant events in more
detail later in this judgment. Suffice it to say that at
the time
that the affidavit in question was made (February 1998), there was
no indication that the plaintiff might have intended
to institute
proceedings of the nature that ensued when summons was issued four
months later. When the affidavit was made, the
passage oftime that
had already passed since the events most centrally relevant to the
case rendered it improbable that Dr Ferreira
could have anticipated
any such litigation, or indeed the nature of the disputes on which
it came to be founded.
11
The content of Dr Ferreira's affidavit indicates that his object, as
expressly stated in the introductory section of the document,
was to
relate the history of Muller's dealing with the bank from the time
of Ferreira's initial involvement in Muller's affairs
at the
beginning of 1987.
[40]
This is possibly a convenient stage to deal with the evidence of Mr
Kritzinger, the manager of the Johannesburg branch of
Boland Bank at
the time of the realisation process undertaken in terms of the May
1988 agreement. One of the primary purposes
for which the plaintiff
appears to have called Kritzinger was to support Muller's contention
that Dr Ferreira was the bank's
representative, and not his agent,
as contended on behalf of the bank.
[41]
Kritzinger clearly had a more direct and active involvement in the
management of the Muller accounts and the realisation
process than
he was willing to admit to in the course of hisevidence, both here
and in the insolvency enquiry proceedings. At
both hearings
Kritzinger's evidence essentially distilled to a version that he had
little recollection. I can accept that he
did indeed have a very
limited independent memory of events.
[42]
His overriding impression that the accounts were managed and the
realisation process was undertaken under the exclusive management
of
Dr Ferreira and the bank's head office, and in particular, Mr
Hickman, may have had some basis in fact.
12
But contemporaneous correspondence to which Kritzinger was party, as
author, makes it evident that he did indeed play an active,
even if
subsidiary, role in the relevant affairs. It is not necessary to go
into detail in this regard.
[43]
It suffices by way of example to refer to the letter, dated 21 June
1988, written by Kritzinger to Hickman at pp.158-161
of exhibit C3.
This letter was put to Kritzinger by Muller's attorney during the
former's interrogation at the insolvency enquiry.
The letter deals
with a progress meeting in relation to the then partly completed
realisation process attended by Kritzinger,
Muller,
Lubbe,
13
Ferreira and one Scholtz at Muller's Wadeville premises. The content
of the letter exemplifies Kritzinger's active involvement
in the
process. Its content is also difficult to reconcile with his
description in evidence of Ferreira as an employee of the
bank. At
the insolvency enquiry Kritzinger described Ferreira as a consultant
to the bank. Certainly, it is difficult to understand
why Kritzinger
should have been reporting to Hickman in the manner reflected in the
content of the letter under reference if
Ferreira were himself a
bank official.
[44]
Appendix 3 to the agreement sets out the respective roles of the
various individuals involved in the implementation of the

realisation. It is evident from the content of the appendix that
Lubbe was the appointed bank representative and that Ferreira's
role
was a different one. The annexure provides that the services of the
bank and those of Muller himself in the implementation
of the
realisation process were to be rendered without remuneration.
Ferreira, on the other hand, who it would appear was intended
at the
stage of the conclusion of the agreement to become the liquidator of
the companies when they were wound up in terms ofthe
contemplated
scheme,
14
is referred to in the same context as one of the individuals whose
services would give rise to a cost in the process; and it
seems
reasonably clear that the cost was to be a charge on the realisation
account. If the understanding were that Ferreira's
fee would be
payable only at the end of the process, when he had discharged his
mandate, that might explain the correspondence,
to which some
reference was made in the course of the trial, in which he mentioned
having received 'help' from Kritzinger by
way of a R20 000 payment.
Such payment, in the context that I have just identified, with
reference to appendix 3, as being the
most plausible explanation of
Ferreira's role, would have constituted a discretionary advance.
[45]
Whether Ferreira was Muller's agent was a question hotly in
contention between the parties at the trial. The significance
of the
issue went to matters such as the knowledge of facts that could
allegedly be imputed to Muller if it were accepted that
Ferreira had
been his agent; and also to the question of how much weight should
be attached to the content of Ferreira's affidavit
made for the
purpose of the insolvency enquiry if the affidavit were to be
admitted in evidence, either in terms of the Civil
Evidence
Proceedings Act or the
Law of Evidence Amendment Act.
[46
]
I can understand a basis for the description of Ferreira as Muller's
agent. Whether or not he was formally appointed by Muller
and the
latter's then wife, as Ferreira's affidavit suggests, it was only
with the agreement of Muller and the directors of the
affected
entities in the Muller group that Ferreira could have assumed the
role that even Muller acknowledged he in fact discharged.
To that
extent Muller undoubtedly played a role in his appointment. I
consider that it is also clear that in giving instructions
to
Kritzinger on the issue of cheques drawn on the so-called 36T
account, Ferreira must have been acting primarily on Muller's

behalf, being the person in whom the right to the funds in that
account vested in terms of the implementation of the realisation

process. It is improbable that Muller would not have been aware of
the 36T account, as he claimed. The letter by Kritzinger,
dated 9
May 1988, which particularised the allocation of the proceeds of the
R12 million purchase price paid by the bank in terms
of the
realisation agreement, appears on its face to have been addressed to
the postal address nominated by Muller in terms of
the agreement as
the address to which all notices to him by the bank under the
agreement should be sent.
[47]
It is, however, unnecessary to characterise the nature of
Ferrieira's relationship to either the bank or to Muller. It is

evident that Ferreira, a man with a wealth of experience in
banking-related matters, was used by Boland Bank in a number of
matters to resolve problems with corporate clients which had run
into difficulty. The probabilities support the correctness of

Muller's evidence that it was the bank's officials who introduced
him to Muller, and that it was at their suggestion that Ferreira

became involved in Muller's business. Ferreira had, up to his
retirement, been the managing director of Merca Bank, in which

Boland Bank had a proprietary interest, and he was closely
acquainted with Messrs Liebenberg and Hickman, who both served, as

representatives of Boland Bank, as directors on the board of Merca
Bank. Indeed a letter by Hickman to Muller in December 1986
confirms
that it was at the bank's instance that Ferreira was introduced to
Muller.
[48]
The tenor of correspondence addressed by the bank to Ferreira once
the realisation process had been decided upon gives the
impression
that, certainly at that stage, he was regarded by the bank's
officials as representing the Muller Group in the implementation
of
the process. It is equally clear from correspondence written by
Ferreira to the bank that he regarded his role to include
advising
the bank on what he considered would be in its best interests in the
carrying out of the agreed plan. On a consideration
of the
conspectus of evidence I am left with the impression that Ferreira
was probably an independent consultant charged with
devising a
resolution to the seemingly intractable difficulties with the Muller
Group accounts to the benefit, if possible, of
both of the
protagonists.
[49]
Reverting, with those considerations in mind, to the Ferreira
affidavit; there is no indication of apparent bias in the document

whatsoever. On the contrary, its narrative content is closely
supported by a number of annexures, the authenticity of which was

not called into question. The content of the affidavit also lends
support to material aspects of the evidence of the plaintiff

himself. There is no plausible indication that Dr Ferreira had any
relevant proprietary or pecuniary interest in any matter related
to
the content of the affidavit, or in the resolution of any dispute
thatmight conceivably arise in respect of the state of the

plaintiff's accounts with the defendant bank.
[50]
I am satisfied by the evidence of Messrs Eybers,
15
Strydom and Tintinger that the photocopy of the affidavit deposed to
by Dr Ferriera on 16 February 1998 is a true copy of the
original
document. In the circumstances I am also satisfied that it falls to
be admitted in evidence in terms of
Part VI
of the Civil Proceedings
Evidence Act, 1965.
[51]
Defendant's counsel argued that if the copy of the affidavit was not
admissible in terms of the Civil Evidence Proceedings
Act, it should
then be admitted in terms of
s 3
of the
Law of Evidence Amendment
Act 45 of 1988
. It is unnecessary in the context of the admission of
the affidavit under the Civil Evidence Proceedings Act to deal with
this
argument.
Rectification
[52]
The plaintiff alleged that the executed deed of agreement did not
correctly reflect the common intention of the parties as
a result of
'a mistake in the drafting of the document in respect of clauses
2.4.5 and 3.4 thereof'. Both of these clauses have
been set out
earlier in this judgment.
[53]
Clause 2.4.5 is merely a recordal; it has no operative function in
the agreement. Consequently, if the deletion of it sought
by the
plaintiff (or indeed the rectification thereof pleaded by the
defendant to include within the concept of 'the Muller Group'
the
plaintiff in his personal capacity) were to be granted, it would not
affect the parties' respective rights and obligations
vis a vis each
other in terms of the contract. The evident reason why the plaintiff
seeks the removal of the provision is that
its content -ostensibly a
recordal of background circumstances - is at odds with his evidence
explaining the underlying reason
for the conclusion of the contract.
[54]
The result of the claim for rectification is dependant on the
determination of the contesting versions of how and why the

agreement was concluded. In particular, the notion that the
agreement provided that the bank would assume (i.e. effectively
write off) a substantial debt by the Muller Group in its books is
plausible only if one accepts Muller's account of the genesis
of the
agreement. The effect of the rectification of the agreement in
themanner claimed by the plaintiff is that the agreement
would fall
to be read as providing that the plaintiff had to settle all of the
liabilities of SA Trucking, SA Trucking (Cape)
Pty Ltd and Transaf
as disclosed to the bank on 30 April 1988, save for those to Boland
Bank, and that the bank would assume
all such liabilities.
[55]
According to the bank, the agreement was concluded to afford a means
of resolving the unsatisfactory debt situation of the
plaintiff and
various of the companies under his control. These problems were
perceived by the bank as being bound up with intractable
cash flow
problems in the transport business conducted by the plaintiff
personally and through the vehicle of various companies
constituting
what was referred to as 'the Muller
Group'.
16
[56]
According to the plaintiff's evidence on the other hand, the
agreement was entered into at the instance of the bank to address

his complaint that the bank had erroneously failed to cancel its
record of his indebtedness in respect of what he chose to call

'fictitious' or 'questionable' hire purchase transactions. The
plaintiff's evidence in regard to the alleged factual basis
for this
contention went as follows.
[57]
He had started transacting business with the Kroonstad branch of
Boland Bank in the early 1980's. The bank had approached
him to
purchase an almost brand new truck which they had repossessed from a
defaulting debtor. The relationship had grown because
Boland Bank
agreed to grant him credit on competitive terms. Some time after an
established relationship with the senior management
of the Kroonstad
branch had come into being, the plaintiff encountered a serious
difficulty with the impoundment by the Railways
Police of a number
of the vehicles in his fleet in about mid 1985. After taking advice
from his attorney, the plaintiff approached
the management of the
bank's Kroonstad branch and concluded an arrangement with them to
sell the vehicles that were liable to
impoundment to the bank. The
bank would in turn immediately on-sell these vehicles on hire
purchase to SA Trucking (Pty) Ltd
and Transaf (Pty) Ltd (which it
will be recalled are companies in the Muller group subject of the
sale recorded in the May 1988
agreement). To this end the plaintiff
signed a number of blank pro forma hire purchase contracts and
provided van Zyl and Boonzaaier
with an EA Muller trading as SA
Trucking invoice book to be completed by the bank officials to
record the sales of the vehicles
involved to the bank. It was left
to the bank officials to calculate the amounts of the purchase price
of each vehicle in respect
of each hire purchase agreement. The
total purchase price of the vehicles involved in the transaction had
to be sufficient to
settle all of the plaintiff's indebtedness in
the books of Boland Bank as at that date. This indebtedness entailed
the plaintiff's
personal indebtedness and that of Two Way Transport
(Pty) Ltd and Heavy Transport (Pty) Ltd in respect of certain hire
purchase
contracts.
[58]
The intended result of this transaction, apart from providing a
means to the immediate release of the impounded vehicles,
was to
transfer all of the plaintiff's personal debt to the bank to SA
Trucking (Pty) Ltd and Transaf (Pty) Ltd. Those companies
would take
over the debt in the form of their liability under the hire-purchase
agreements in respect of the impounded vehicles.
The plaintiff was
to stand as surety for the companies.
[59]
Shortly after the aforementioned scheme was put into place the
plaintiff and the Kroonstad branch bank officials involved

werearrested. A lengthy period intervened during which time the
plaintiff said he had no interaction with the bank or its officials

because of the nature of the bail conditions imposed on him.
17
[60]
After the finalisation of the criminal proceedings, upon the state's
acceptance of a guilty plea by the plaintiff to a charge
described
by him as having been the 'uitgif van 'n vervalste dokument', the
plaintiff arranged a meeting with a senior management
official, one
Mr JAP Hickman, at Boland Bank's head office. The purpose of this
meeting, according to the plaintiff, was to deal
with the fact that
the bank had not implemented the arrangement as it should have done;
more particularly, by not having credited
him with the proceeds of
the sale of his vehicles. Instead the bank was maintaining that the
plaintiff's pre-existing obligations
remained in place and in
addition, and by way of duplication, was also maintaining that SA
Trucking and Transaf were in debt
to the bank in respect of the
aforementioned hire purchase transactions to which they had been
party as purchasers.
In
short the plaintiff appears to have been alleging that the bank was
trying to have its cake and eat it.
18
[61]
The plaintiff testified that during the course of the meeting with
Hickman the bank's chief executive officer, Mr Gert Liebenberg,
was
called into the meeting room. According to Muller, Liebenberg
appeared to grasp the problem immediately. He informed Muller
that
the bank would introduce someone to him who was experienced at
resolving problems of this kind. This person turned out to
be Dr
Charles Ferreira. Shortly after the meeting, so the plaintiff
testified, Mr Hickman informed him that Dr Ferreira would
be the
bank's official on site at the Wadeville headquarters of the
plaintiff's transport business.
[62]
It is convenient to interpolate at this stage that it would appear
from the available documentation that the meeting with
Hickman and
Liebenberg took place on 28 November 1986. Its content was
summarised in a letter by Mr Hickman to Muller, dated
12 December
1986. The letter contains a number of indications that the bank was
very concerned about the unsatisfactory state
of the Muller group's
account. Having referred to certain issues such as Muller's cashflow
problems, the arrears on payment obligations
and the absence of
financial statements, Hickman concluded his letter by saying: 'In
die lig van al die probleme hierbo genoem
en dan meer spesifiek die
finansiele bestuursprobleme het ons die moontlikheid bespreek om dr
Charles Ferreira aan u bekend te
stel. Ek het sedertdien telefonies
met dr Ferreira afgespreek om met u 'n afspraak te verkry.' In his
affidavit, Ferreira testified
that after an initial meeting with
Muller and the latter's former wife he was appointed by them to
assist with the resolution
of financial and management problems in
their business, and in this regard to negotiate with Boland Bank.
[63]
Dr Ferreira became practically involved in Muller's business affairs
in December 1986 or January 1987. He was in possession
of a list of
vehicles, being the vehicles in respect of which the so-called
'questionable' hire purchase agreements had been
entered into. Dr
Ferreira enquired from Muller whether the vehicles (being subject to
the questionable hire purchase agreements)
could be sold and what
the proceeds of such sales would be. Muller estimated that the
vehicles could be sold in the market
for approximately R9 500 000 in
total. A figure of R12 million was however mentioned by Dr Ferreira
and he explained to Muller
that as company tax was 50% at that point
in time, the bank needed approximately R6 million (after tax) 'to
clean their books'.
[64]
Muller then added approximately 47 of his own trucks (not having
been subject to the so-called 'questionable' or 'fictitious'
hire
purchases transactions) so as to make feasible the achievement of
the realisation amount of R12 million required by Ferreira.
The
vehicles in question were, save for one which appears to have been
damaged and written off, those listed in appendix 1 to
the
agreement.
[65]
The scheme to realise the vehicles and thereby 'clean the bank's
books' and resolve Muller's actual and ostensible indebtedness
to
the bank was conceived by Ferreira. Muller contended that Ferreira
had acted as the bank's agent or representative in this
regard.
According to the plaintiff he had no dealings with anyone at the
bank, other than Dr Ferreira, during 1987. He testified
that during
that period Ferreira worked from an office at the plaintiff's
premises in Wadeville outside
Johannesburg.
Ferreira was assisted by a Mr Lubbe (no doubt the Boland bank
representative referred to in appendix 3 to the May
1988 agreement,
as mentioned earlier).
19
[66]
Ferreira's evidence on affidavit was that when he became engaged in
Muller's business affairs he found that Muller's accounting
records,
although not lacking in information, were somewhat chaotic in that
they drew no distinction between Muller's personal
finances and
those of the several companies in the Muller group. One can infer
that Ferreira's initial principal task in order
to redress the
problems he had been engaged to address was to reconstruct sets of
financial accounts. Ferreira found that the
companies in the Muller
Group did not actually trade. Their sole function was to own or
possess the vehicles in the fleet. Any
instalment sale instalments
owed on these vehicles were paid by SA Trucking; i.e. by Muller
personally. No proper internal group
accounting had been kept in
this regard. Ferreira observed that Muller nevertheless appeared to
know precisely what the state
of affairs was within the group; of
what instalments were due, and to whom. Muller was also abreast of
the outstanding balances
due to creditors of the group.
[67]
Ferreira eventually submitted a comprehensive proposal on behalf of
Muller and the Muller Group to Boland Bank in April 1988.
It was set
out in a memorandum from Ferreira to the general management of
Boland Bank, dated 20 April 1988. In that report Ferreira
quantified
the indebtedness of Muller and the Muller Group to the bank as being
in the amount of R11 620 872. The memorandum
would appear to have
been considered at a special meeting of senior management convened
by the managing director, Mr Liebenberg,
on 25 April 1988. The
proposal clearly presaged the terms of the May 1988 agreement. It is
confirmed in Ferreira's affidavit
that at the time of the conception
of the scheme which inspired the May 1988 agreement he believed, on
the basis of advice obtained
from Hofmeyr van der Merwe attorneys,
supported by a partner of accountants and auditors, Theron Du Toit,
Mr S. Rossouw, that
its implementation would bring certain income
tax advantages for Boland Bank.
[68]
The notion of a tax advantage was predicated on the assets of the
businesses acquired in terms of the agreement being acquired
by the
bank by means of dividends
in
specie
upon
the voluntary liquidation of the companies involved. The
considerations involved, which were based on a construction of s
22
of the Income Tax Act, as it then was, and the characterisation of
the acquisition by the bank of the shares and assets as
a scheme of
profit making by a trading company, were addressed in two legal
opinions from Hofmeyr van der Merwe that were produced
in evidence.
Whether or not the tax advice was sound was the subject of some
debate between the expert witnesses, Messrs Barnes
and Greenbaum. I
do not consider it necessary to enter into that debate. Suffice it
to say I have seen nothing in the documentation
produced in evidence
that the bank considered the object of the exercise put in train by
the May 1988 agreement as a scheme of
profit making in the sense
assumed in part of the amplified advice furnished in the memorandum
from attorneys Hofmeyr van der
Merwe, dated 20 April 1988. More
pertinently, there is nothing in the opinions which postulated (at
least expressly) a writing
off of any debt.
[69]
It is not apparent that anything about the scheme contemplated by Dr
Ferreira was inspired by an identified need tocorrect
the effects of
a failure by the bank to account to Muller for the proceeds of the
'questionable' hire purchase transactions,
as alleged by the latter;
nor does it appear in any way to have been directed at accommodating
an assumption by the bank of the
liabilities of SA Trucking (Pty)
Ltd and Transaf (Pty) Ltd, as contended by the plaintiff on the
basis of his construction of
the executed agreement. Indeed, Mr
Rossouw from Theron Du Toit, who gave evidence at the trial,
testified that Ferreira had made
no mention to him of any such
issues when they consulted prior to Rossouw's production of a
letter, dated 19 April 1988, in support
of the tax advice furnished
by Hofmeyr van der Merwe and the scheme of realisation devised by
Ferreira.
20
(Rossouw's evidence explained that a direct realisation of assets by
Muller to reduce his indebtedness to the bank would not
have been
tax efficient, as Muller would have incurred an income tax liability
on any surplus achieved over the written down
book value of the
assets concerned.)
[70]
It appears to me that Dr Ferreira considered the tax advantages
outlined in the opinions provided by Hofmeyr van der
Merwe
to have been a factor which would support structuring the
liquidation of a large part of Muller's business in the manner

proposed and assist to make the proposal more appealing to the bank
than a compulsory liquidation / sequestration. The evidence
is clear
that Ferreira's expectations of the realisation process were, in the
event, overly optimistic, due, according to him,
to Muller having
provided him with inflated estimates of what the assets would
realise and a misdirectedly rosy assessment of
the ease and speed
with which they could be sold. In any event, Ferreira refers to the
Kritzinger letter in his affidavit in
the context of recounting the
implementation of the realisation process. It is apparent that
Ferreira did not perceive any conflict
between the appropriation of
the purchase price as described in the Kritzinger letter and his
understanding of the scheme endorsed
by Hofmeyr van der Merwe, or
the terms of the subsequently concluded May 1988 agreement.
21
I agree with the opinion of Mr Greenbaum, who testified on behalf of
the bank, that it does not appear that the bank acted on
the basis
of the advice furnished by Hofmeyr van der Merwe in the manner that
such advice was construed by the plaintiff's expert
witness, Mr
Barnes.
[71]
Mr Hickman, who was the most senior of the bank's officials directly
concerned with the management of Muller's account at
the relevant
time, testified that the bank's management did indeed have concerns
about the tax implications of the proposal put
together by Dr
Ferreira. Hickman stated the bank's concern was to be assured that
the proceeds of the sale of Muller's fleet
should not be taxable in
the bank's hands because any such taxation would undermine the
set-off effect that was fundamental to
the contemplated redemption
of Muller's indebtedness to the bank to be achieved in terms of any
implementation of the proposal.
[72]
The plaintiff's case was that the effect of clause 3.3 of the
agreement was that Boland Bank would assume the liabilities
of
Transaf (Pty) Ltd and SA Trucking (Pty) Ltd to the bank. Muller
conceded during his evidence that the sum of these liabilities
was
in the amounts of R1 027 989,82 and R5 245 496,09, respectively. The
cogency of this concession was confirmed by the evidence
of a
chartered account, Mr Claude Barnes, who, as mentioned, was called
as an expert witness in the plaintiff's case and had
analysed the
relevant transactional history. It is common ground that the
liabilities in question arose from a number of hire

purchasecontracts concluded by the companies with the bank.
22
[73]
On the day that the agreement was signed by the bank (9 May 1988),
the bank immediately paid the R12 million purchase price
provided in
terms of clause 4. This payment was effected by settling certain
debts owed by Muller and the entities in the Muller
group to Boland
Bank. The appropriation of the R12 million payment by the bank in
May 1988 was described in a letter by the manager
of the bank's
Johannesburg branch which was addressed to Muller at the address
given by him for the purpose of notices in terms
of the agreement.
23
This letter was 'the Kritzinger letter' to which I referred
earlier.
24
(The appropriations described in the Kritzinger letter related,
according to the tenor of the letter, to an indebtedness by Muller

and certain companies in the Muller group in the amount of R11 525
952,38 - that is in an amount close to that reported in Ferreira's

aforementioned submission to the bank on 20 April 1988.) Muller was
unable to dispute that the Kritzinger letter had been sent
to him.
At some stage in his evidence, albeit when testifying on a different
point, Muller claimed not to be a goodreader and
not to be inclined
to give particular attention to documents. He claimed, however, that
the first time he had witting insight
into the content of the
Kritzinger letter was during the insolvency enquiry in the late
1990's. (Even if Muller's evidence in
this regard were to be
accepted, it still begs the question why the appropriation of the
R12 Million purchase price could not,
and was not, addressed by him
effectively much earlier. That is a question to be addressed in the
consideration of the defendant's
special defence of extinctive
prescription, with which I shall deal later.)
[74]
The scheme of payment and appropriation described in the Kritzinger
letter was strictly not in accordance with the scheme
provided in
the agreement for the settlement of the purchase price. In my view
nothing turned on this in the overall implementation
of the
realisation exercise because of the reconciliation between the 37T
and 38T accounts undertaken at its completion.
25
This was also the opinion of Mr Greenbaum.
[75]
Mr Muller's evidence in respect of the background to the May 1988
agreement was directly contradicted by the testimony of
Mr
Francois
van Zyl, who had been the manager of the Kroonstad branch of Boland
Bank at the time the so-called 'questionable' hire
purchase
transactions were effected. Van Zyl had been transferred to Springs
in 1986 and had thereafter resigned from Boland
Bank to go into
business with a colleague at the end of 1989. He was not involved in
the meeting that Muller had with Hickman
and Liebenberg and he had
no role on behalf of the bank in the realisation scheme devised by
Ferreira.
[76]
Van Zyl recalled that the main reason for the conclusion of the hire
purchase contracts was to afford Muller protection against
seizures
by the Railways Police. With Boland Bank becoming the owner of the
vehicles involved, and Muller's companies the hire
purchasers
thereof, the transport operation would be freed from exposure to the
seizure of vehicles on the road. These seizures
caused Muller's
business damage because the disrupted deliveries wrought havoc to
the efficiency of his operations, with adverse
effect on the
business's cash flow.
[77]
Van Zyl testified that he was persuaded by Muller's attorney, Mr
Eugene Marais, as to the viability of the hire purchase
scheme
proposed. The proceeds of the sale of some 15 to 18 vehicles by
Muller
to the bank were, according to van Zyl, deposited in a fixed deposit
account in Muller's name which was in turn used to
provide security
for the obligations to the bank of the hire purchaser companies in
the Muller Group. Van Zyl also ventured that
some of the proceeds
had been applied to settle other accounts in respect of which Muller
or his companies were indebted to the
bank. Van Zyl was adamant that
there had been full counter-prestation by the bank. He pointed out
that as a consequence of a
suggestion by officials in the bank's
head office that he had exceeded the limits of his authority in
concluding the relevant
hire purchase contracts, and of his
subsequent arrest in relation to allegations that he and Muller had
falsified the dates of
certain of the transactions to procure the
release of certain vehicles seized by the Railway Police, a detailed
internal audit
of the Kroonstad branch had been carried out,
apparently at the instance of Mr Liebenberg, the managing director.
No material
irregularities were uncovered in the audit.
[78]
Van Zyl's evidence was not entirely clear in all respects. I
consider that he cannot really be criticised on this account
having
regard to the passage of 25 or so years between the relevant events
and the trial. In general, and despite the attention
drawn to his
two convictions of offences involving dishonesty, he impressed me as
impartial and, subject to the understandable
effect of the
intervening passage of more than 20 years since the relevant events,
dependable.
[79]
Van Zyl confirmed the evidence of Hickman and Ferreira, which finds
objective support in the bank's accounting records, to
the effect
that by 1985 Muller was experiencing significant cashflow
difficulties, which reflected in the Muller Group falling
into
arrears on its periodic payment obligations to the bank. This
evidence on the other hand highlights the implausibility of
the
suggestion by Mr Barnes that clause 2.4.5 of the May 1988 agreement
had been worded as it was in order to create a false
impression to
the revenue authorities. Mr Barnes's hypothesis does not explain on
any approach why Muller should have entered
into a transaction for
the realisation of his business for an indeterminable sum merely to
correct an alleged error in the bank's
books. (I must confess that I
was in any event unable to understand Mr Barnes' reasoning in
support of the suggestion, which
was that clause 2.4.5 had been
worded to (falsely) paint a picture that the Muller Group was in
difficulty so as to render more
plausible the bank's decision to
liquidate the companies 'instead of merely selling the assets' and
using the proceeds to settle
the outstanding debt to the bank'.)
[80]
The plaintiff's counsel tackled van Zyl with the content of a
memorandum produced by one of the bank's attorneys in late
1988 in
the context of exchanges with the Receiver of Revenue in
Bloemfontein in respect of general sales tax assessments that
had
been levied by the Inland Revenue department on the Bank arising out
of the contentious hire purchase transactions. The submissions

advanced on the bank's behalf in this memorandum suggested that the
transactions had in fact not been hire purchase sales, but
loans
instead. Van Zyl had no knowledge of the memorandum, and testified
that he had not been consulted in regard to the matter
by either the
attorney concerned, by Dr Ferreira, or by the bank's senior in-house
legal officer, Mr Van der Merwe, all of whom
appear to have had a
role in formulating the bank's submissions to the Receiver. He
disputed the correctness of the suggestion
in the memorandum that
the hire purchase transactions concluded by him arising out of
Muller's aim to avoid the impoundment of
his vehicles had not been
genuine and were merely disguised loans to Muller. Van Zyl's
evidence was consistent with that of the
plaintiff himself in this
regard. Van Zyl's evidence is also consistent with that of Muller on
the number of transactions involved
- between 15 and 18; and not 69,
as set out in the memorandum.
[81]
In the circumstances it is not clear to me what assistance the
plaintiff's counsel sought to derive from the memorandum.
It is
apparent from the documentary evidence that Ferreira must have
considered that the realisation process that was the central
feature
of the rescue package he had been mandated to devise would be
assisted by the 'conversion' of the hire purchase transactions
into
loans. An argument with the revenue authorities on the proper
characterisation of the transactions does not affect the question
of
the existence of the underlying debt, howsoever characterised.
[82]
There is evidence that a proposal about re-characterising the debt
from hire purchase debt to one based on loans secured
by notarial
bonds had been put to the bank's board of directors during June 1987
and accepted in principle. It is also clear
that Muller and his
former wife were privy to this strategy, as they signed aletter,
dated 11 June 1987, requesting its implementation.
26
The content of the letter, which deals with a number of other
issues, and in itself contains indications of continuing liquidity

problems being experienced by the Muller Group, states that the
request was made arising out of discussions between Charles Ferreira

and the executive managers ('uitvoerende bestuurders') of Boland
Bank. Ferreira's view might well have been inspired by the fact,
if
it was a fact, described in the memorandum to the Receiver of
Revenue that the sales were not recorded as sales in Muller's

accounts. Nothing much can be inferred from that omission, however,
if regard is had to the description by Ferreira in his affidavit
of
the state of Muller's accounting system. The content of the
memorandum by the bank's attorney to the Receiver of Revenue on
the
sales tax dispute does not advance the plaintiff's case that the May
1988 agreement was directed at remedying a non-payment
to him by the
bank of the proceeds of the purchase from him by the bank of
vehicles for the hire purchase transactions. It merely
goes to
argument as to the correct legal characterisation of those
transactions; as to whether they consisted of sales properly
so
called, or loans.
[83]
Mr Muller dismissed the documentation that suggested that the reason
for the involvement of Ferreira and the scheme to realise
his assets
to redeem his indebtedness to the bank was the Muller Group's
inability to service its debt as 'window dressing' devised
by the
bank's officials to disguise the fact that Muller had in fact been
swindled by reason of the Bank's failure to set off
the payments due
to him in respect of the assets allegedly acquired by it from him in
terms of the so-called questionable transactions.
As Mr
Carstens
SC,
who appeared for the bank, justifiably contended, Muller's
assertions in this respect amounted to an allegation of fraudulent

conduct by the bank. It is trite that fraud is not readily assumed
(cf. e.g.
Gates
v Gates
1939
AD 150
at 155;
Loomcraft
Fabrics CC v Nedbank Ltd and Another
[1995] ZASCA 127
;
1996
(1) SA 812
(A) at 817G-H). It is inherently improbable that the bank
would have engaged in the chicanerous subterfuge conjured by
Muller's
evidence. No plausible reason for its officials to have
done so was demonstrated, and no objective basis to question the
genuinenessand
integrity of the bank's documentary records was
proven.
27
On the contrary, it was Muller's version that impressed as
inherently most improbable. There is no documentation, or indeed
anything whatsoever, to support his claim to have raised the bank's
alleged failure to credit him with the proceeds of the questionable

transaction sales in 1986.
[84]
Muller may to a certain degree lack sophistication, but the evidence
irrefutably demonstrates him to be a shrewd and astute
businessman.
His own evidence showed him to be a man who was not afraid to
litigate to protect and advance his rights, or what
he might
perceive to be his rights. He testified to having taken one matter
to the Appellate Division during the 1980's. I am
unable to accept
that in the circumstances described in his evidence before this
court Muller would not have promptly insisted
on a proper accounting
for the questionable transactions and a rectification of the bank's
accounts if that was what he considered
to be his due. For the same
reason I have no doubt that he would have been contemporaneously
aware of the conduct and results
of the realisation process and
that, in the course thereof, he probablyknew about and understood
what was recorded in Kritzinger's
aforementioned letter of 9 May
1988.
[85]
The free residue of R474 047,62 that remained after the setoff
exercise described in the Kritzinger letter was transferred
into a
current account conducted in Boland's books in Muller's name. This
account was referred to in evidence as the '36T account',
as an
abbreviated form of the applicable account number.
28
Two of the debts redeemed in the set-off were the aforementioned
debts of Transaf (Pty) Ltd and SA Trucking (Pty) Ltd. Muller

contended that this was in breach of the agreement and that the
amounts should have remained credited to him as part of the R12

million purchase price payable by the bank. He was supported in this
view by Mr Barnes. Mr Barnes' approach was premised on his

understanding of the realisation exercise as a tax scheme by Boland
and by his interpretation of the abbreviation 'v/gesette

finansiering' in Boland's accounting records.
[86]
Barnes formed the opinion that the abbreviation denoted 'vrygesette
finansiering' (Eng. released financing). Under cross-examination,

however, Barnes had to concede that he had never come across the
expression 'vrygesette finansiering' in any previous context.
When
his attention was drawn to the use by bank officials (in fact by Mr
Kritzinger the manager of the Johannesburg branch of
Boland Bank at
which the 36T and two other relevant accounts - the 37T and 38T
accounts - were conducted) of the expression 'voortgesette

finansiering' (Eng. extended or continued financing), he was
constrained to concede that his interpretation of the abbreviation

might have been incorrect. Why Barnes should have construed the
abbreviation in the manner in which he did is by no means clear
to
me. Indeed, in my judgment, it was somewhat indicative of an
a
priori
approach
to the case by the witness. After all, the agreement itself
contemplated that there might be a need for the bank to continue
to
finance Muller and his operations after the conclusion of the
realisation process. In any event his concession destroyed the
first
basis asserted in his summary of evidence for his construction of
clause 3.3 and 3.4 of the May 1988 agreement.
[87]
There was no evidence that the agreement was implemented in a manner
consistent with any intention by Boland Bank to take
a tax advantage
of the nature postulated by Barnes. The realisation process
certainly did not take place in the expeditious manner
or in a way
to achieve completion within the tax year, as appears to have been a
material aspect of the attractiveness of the
mooted scheme. (Indeed
the realisation process appears to have been brought to a somewhat
contrived conclusion, when another
company of which Muller had
control, SA Trucking Plant Hire and Rental Company, purchased 82
unsold units for R3 075 000, of
which R3 million was financed by
Boland Bank. It goes without saying that this transaction in itself
brought about a situation
quite inconsistent with the notion
propounded by Muller that the common intention was that at end of
the realisation process
he and the bank would go their separate
ways. This, of course, in addition to the express provisions in the
May 1988 agreement
itself that contemplated a continuing
debtor-creditor relationship between Muller and the bank after the
completion of the realisation
process.)
[88]
Mr Barnes in fact conceded that the writing off of Muller Group owed
debt by Boland was not a necessary feature of the propounded
tax
advantage scheme. There is not a single reference anywhere in the
contemporaneous documentation to which attention was drawn
in
evidence to suggest any consideration whatsoever by the bank of the
voluntary incurrence of a tax loss by a writing off of
debt. It
seems a most improbable scenario that the complicated realisation
process should have been undertaken by Muller and
Boland Bank if the
principal basis for the exercise was, as Muller alleged, the mere
correction of a failure by the bank to credit
him with the proceeds
of the so-called questionable transactions. The allegedly
fundamental role of these transactions finds
no support in the
voluminous documentation consisting, amongst other things, of
accounting records, minutes of meetings, or correspondence
that was
put in by both parties during the course of this part of the trial.
Mr Hickman testified that he had not heard of the
allegations made
by Muller based on the questionable transactions until his
involvement, many years after his retirement, in
pre-trial
consultations in late 2008 and early 2009. Mr Hickman stressed that
Muller's allegation that he had not been accounted
to in respect of
the hire purchase contracts was just not credible in the context of
the double entry accounting system used
by the bank. Had Muller not
been accounted to, the Kroonstad branch's books would not have
balanced.
[89]
I find it beyond belief that Muller should have consented to the
liquidation of a substantial part of his business merely
for the
purpose, as he would have it, of correcting an erroneous reflection
of the state of his financial affairs in the books
of Boland Bank.
Muller's attempts to address this difficulty in cross-examination by
referring to 500 criminal cases pending
against him at the instance
of the Railways police in the Balfour magistrate's court and the
proprietary demands of his then
wife in the pending divorce
proceedings in which they were involved were bald and singularly
unconvincing. Mysterious references
to a 'red file' on Muller's
affairs allegedly kept by Mr Hickman, or even the expungement by the
Master (on grounds that were
not identified in the evidence) of
certain significant claims advanced by Boland Bank against Muller's
insolvent estate might
hint at possible grounds for the exploration
of certain avenues, but in the vague manner in which they arose in
the evidence
they did nothing to advance the plaintiff's case. The
most readily comprehendible rationale for the scheme reflected in
the agreement
was the orderly winding up of a commercially insolvent
business in a manner that would maximise returns on the sale of
assets
and avoid some of the costs of a judicially ordered
compulsory liquidation.
[90]
It should be mentioned that three banking accounts in Boland Bank's
books were opened in connection with the exercise that
followed on
the conclusion of the May 1988 agreement. These have already been
referred to earlier in this judgment. They were
the 36T account, the
37T account and the 38T account. The 36T account was apparently
established to contain the R3 million facility
contemplated in terms
of the agreement to make provision for the redemption of Muller's
overdraft at the Wadeville branch of
the Standard Bank. The 37T
account was used as the business's operational account during the
realisation period. It was referred
to as 'the administration
account'. The 38T account was the account to which the proceeds of
the sales of the vehicles sold during
the realisation process were
credited. It was the account debited with the R12 million purchase
price due by the bank in terms
of the May 1988 agreement. The 38T
account was also referred to as 'the realisation account'.
[91]
I have already mentioned the manner in which the realisation process
was brought to a conclusion under the supervision of
Dr Ferreira by
the sale of the remaining vehicles to SA Trucking Hire and Rental
(Pty) Ltd for R3 075 000. According to a report
written by Dr
Ferreira to the manager of Boland Bank's Johannesburg branch, dated
3 July 1989, the proceeds generated by this
sale were applied to
settling the debit balances on the 37T (the businesses had run at a
loss during the realisation period)
and the 38T accounts, which were
then closed. A remaining indebtedness in the sum of R9 813,72 was
debited to the 36T account.
It is quite clear from the tenor of the
3 July 1989 letter that it was regarded by Dr Ferreira as a final
accounting by him to
the bank in respect of the outcome of the
realisation process. The final paragraph of the letter, which was
accompanied by various
schedules, went as follows: 'Ek vertrou dat
hierdie inligting vir u duidelik is en ek sal dit met Mnr E.A.
Muller bespreek en
verder aan u rapporteer, indien nodig.'
[92]
The impression that the report by Dr Ferreira represented the
conclusion of the realisation process under the agreement is

supported by the evidence by Muller that it was at about this time
that he was informed by Mr Kritzinger that all the debt had
been
settled. His evidence was to the effect that Kritzinger had written
him a letter to this effect, but no such letter was
produced in
evidence. In a sense one can understand that Kritzinger might, in
the context described, have given Muller to understand
that the debt
which had given rise to the realisation process had been settled.
That indeed was the effect reported in Dr Ferreira's
letter to the
bank of 3 July 1989. It would, however, have been opportunistic of
Muller to construe any such advice as tantamount
to an intimation
that he was no longer indebted to the bank. On the contrary, the
realisation agreement expressly contemplated
such continuing
indebtedness, and that it would arise in regard to the overdraft
facility extended in terms of the agreement.
As I have explained,
that facility was in the 36T account; and it is indeed in that
account that the indebtedness that Muller
professes surprise at
being confronted with by Mr Hickman, sometime in 1990, existed.
[93]
Muller's evidence with relation to the alleged receipt by him of a
letter from Kritzinger to the effect that he had settled
his debt to
the bank was in any event inconsistent with his evidence that he had
in fact been led by Ferreira to believe that
at the end of the
process he could expect to be in receipt of a payment of between
five and six million Rand. The point of referring
to this
inconsistency is to emphasise the remarkable failure by Muller in
the circumstances described by him to take any action
to ascertain
and enforce what he considered, or had been led to believe, were his
rights. The most appropriate action would have
been that which he
instituted in the current proceedings eight to nine years later,
namely for a statement and debatement of
account and payment of such
amount as might be shown to be due to him on such debatement.
[94]
What Mr Muller did instead was to apply for additional facilities
from the bank. It is significant that that application
was supported
by a statement, to which he owned with his signature on 22 January
1990, in which the history of his relationship
with the bank is
reviewed. In the application, in which the realisation process is
described as a 'consolidation', the following
material admissions
are made:
That
at the end of February 1988, Muller owed Boland Bank R12 million
and Standard Bank R3 million.
That
at the end of the 1988 financial year 'it was decided to
consolidate for a number of reasons, the most important being:
-the
age of [his] trucks.
-high
interest rates on short term loans (HP.s).
-problems
encountered in obtaining suitable transport permits
-at
this time Mr. Muller was divorced from his wife and had to pay her
an amount of R1 million
3.
A total of 100 trucks (without trailers) were sold and an amount of
R12.9 million was realised. At this time Mr Muller was
under the
impression that he had repaid his entire obligation to Boland Bank.
The bank, however, had continued to debit Mr Muller's
account with
interest and due to the disputes arising from this had turned down
his application for a long-term bond on his fixed
properties in the
Wadeville area.
Notably,
Muller would appear to acknowledge in these statements that the
realisation process had occurred in the context of liquidity

constraints and an overall indebtedness to Boland Bank of about R12
million. This is wholly inconsistent with the position advanced
by
him in evidence at the trial. Equally notably, the statement in
support of the application for additional finance does not
contain
any assertion that the realisation (or 'consolidation') process was
directed at addressing an erroneous state of affairs
in the bank's
books of account.
[95]
Shortly after the institution of proceedings in this action, in
1998, the bank's attorneys commissioned KPMG forensic and

investigative accountants to undertake a 'reconstruction' of the
realisation account 'as it was originally intended in clause
6.3 in
the agreement of sale'. It is apparent from the KPMG report, a copy
of which was annexed to the summary of Mr Barnes's
evidence, that
its compilers consulted with Dr Ferreira in the course of producing
it. In this connection, in a letter to KPMG,
dated 6 February 1999,
Ferreira
confirmed the content of his affidavit made on 16 February 1998.
There is no suggestion in the KPMG report that the realisation

exercise was not carried out essentially in accordance with the
agreement. The KPMG analysis confirmed that at the conclusion
of the
realisation process, there was a shortfall of more than R3 million.
[96]
As to the meaning of 'liabilities' in clause 3 of the agreement, I
consider that the amendments effected to the draft signed
by Muller
in April 1988 reflected in the actually concluded agreement signed
by both parties a week or so later are significant
indicators of the
parties' common intention.
[97]
In this regard, the insertion of the recordal in clause 2.4 is
important. As I have already observed, with reference to clauses

2.4.4 - 2.4.6, quoted in paragraph
[4],
above, those provisions give a clear indication of the apparent
object of the conclusion of the agreement; namely to 'enable
Muller
to settle his debts' to his 'major creditor', Boland Bank. They also
point clearly to the reason for the exercise; being
the liquidity
problems experienced by 'the Muller Group' which had resulted in it
finding it difficult 'and more recently impossible
to meet its
monthly payments to Boland'. I have also remarked earlier on the
poor draftmanship. It is evident if regard is had
to the sub-clause
as a whole that the references therein to Muller must comprehend
Muller and the Muller Group and those to the
Muller Group must
include Muller personally. Clause 2.4 is significant because its
content is entirely incompatible with the
plaintiff's case; while at
the same time being congruent in important respects with the
situation that falls to be inferred from
contemporary documentation
and the evidence of witnesses such as van Zyl, Hickman and Ferreira.
[98]
Seen in that context it seems most improbable, in my view, that the
common intention was that the exercise was to facilitate
the writing
off in Boland Bank's books of real or putative indebtedness to it by
Muller or the Muller Group.
[99]
Clause 2.4 is also significant in that it records (in clause 2.4.2)
that 'the assets of the Muller Group are substantial,
having an
approximate value of R26 000 000 (Twenty Six million Rand)'. It was
no doubt this estimation of value which gave rise
to the evident
possibility contemplated in the agreement that the realisation
exercise might render a surplus that would fall
to be shared between
Muller and the Bank. As already mentioned, however, clause 4.4.3
of the agreement contemplated that any
surplus would be insufficient
to settle Muller's liabilities and provided for the affording by the
bank of a R2,5 million facility
to assist him in this regard.
Coupled with the R3 million facility contemplated in terms of clause
4.4.2 in respect of the transfer
to Boland of Muller's indebtedness
to the Wadeville branch of Standard Bank, it is evident that a
significant continued exposure
by Muller to the bank after the
completion of the realisation exercise was expressly contemplated.
This is inconsistent with
the underlying theme of Muller's version
which is to the effect that it was contemplated that at the end of
the exercise he and
the bank would each be in a position to go their
'own merry way'. (It is evident that such an optimistic result could
have eventuated
only if the realisation proceeds exceeded R12
million by a considerable margin.)
[100]
The addition of clause 3.4 to the signed agreement is also
significant. Clause 3.3 and 3.4 have been quoted in paragraph
[13],
above. As mentioned there, the draft signed by Muller at the end of
April did not contain a clause 3.4. In my view the intended
effect
of the insertion of clause 3.4 is reasonably (and
I
use the qualification advisedly) clear if, and only if, the
provisions of clauses 3.3 and 3.4 of the agreement are read (as
they
must be) in the context of the deed of contract looked at as a
whole. The plaintiff's counsel's approach to the construction
of
clause 3.3, which purported to be predicated on the re-statement of
'the golden rule of interpretation' in the oft cited passage
from
Coopers
& Lybrand v Bryant
[1995] ZASCA 64
;
1995
(3) SA 761
(A) at 767E-768E, was flawed in my view by reason of its
failure to pay sufficient regard to the rest of the instrument.
[101]
Construed in the correct manner it seems evident that the intention
was that the only liabilities of the three companies
referred to in
clause 3.3 at date of transfer to the purchaser would be the amounts
owed by them to Muller arising out of his
settlement of the
companies' liabilities to third parties.
29
The assumption of those liabilities by Boland Bank would result in
Boland Bank becoming liable to Muller for the redemption of
the
resultant credit loan accounts. That liability would, however, be
only notional because of the acquisition at face value
by the bank,
in terms of clause 4.2.1 of the agreement, of Muller's loan claims
against the companies. The intended result would
be that after the
execution of the sale Boland Bank would be the only creditor of the
companies (except in respect of any operational
expense related debt
incurred in the running of the businesses during the realisation
period, which was to form a charge on the
realisation account). This
intended result is understandable in the context of the scheme that
the companies should be voluntarily
liquidated at the instance of
Boland Bank and their assets then distributed to the bank as a
liquidation dividend
in
specie.
[102]
Clauses 3.3 and 3.4 make no sense at all in the context of the
evident object of the transaction identified earlier (with
reference
to clauses 2.4.4 - 2.4.6) if construed to connote that Boland Bank
would assume the debt owed to it by the three companies.
That would
entail a writing off of the debt, not a repayment of it.
Significantly, Dr Ferreira's memorandum to the bank, apparently

telefaxed on 20 April 1988, contains no suggestion of any such
incidence. Although not entirely comprehensible to Messrs Barnes,

Greenbaum or Hickman in all respects, the memorandum discernibly
sets out the conceptual proposal which led on to the conclusion
of
the May 1988 agreement.
[103]
The plaintiff accepted that he bore the onus of proving that the
agreement fell to be rectified in the respects claimed.
In this
respect the plaintiff's counsel referred to Brand JA's summary of
applicable principle in
Soil
Fumigation Services Lowveld CC v
Chemfit
Technical Products (Pty) Ltd
2004
(6) SA 29
(SCA) at 38J - 39B:
'
It
is a settled principle that a party who seeks rectification must
show facts entitling
him
to that relief ' in the clearest and most satisfactory manner' (per
Bristowe J in
Bushby
v Guardian Assurance Co
1915
WLD 65
at 71; see also
Bardopoulos
and Macrides v Miltiadous
1947
(4) SA 860
(W) at 863 and
Levin
v Zoutendijk
1979
(3) SA 1145
(W) at 1147H - 1148A). In essence, a claimant for
rectification must prove that the written agreement does not
correctly express
what the parties had intended
to
set out therein. (See e.g.
Meyer
v Merchants' Trust Ltd
1942
AD 244
at 253.)'
In
Meyer
v Merchants' Trust Ltd
at
the place cited it was stated -
'Proof
of an antecedent agreement may be the best proof of the common
intention which the parties intended to express in their
written
contract, and in many cases would be the only proof available, but
there is no reason in principle why that common intention
should not
be proved in some other manner, provided such proof is clear and
convincing.'
[104]
For the reasons given, I have not been satisfied that clauses 2.4.5
should be deleted, or that clause 3.4 needs to be rectified
as
claimed by the plaintiff. I furthermore find that it has not been
proven that the 'liabilities' intended to be assumed by
the bank in
terms of clause 3.3 of the May 1988 agreement included the
liabilities of SA Trucking (Pty) Limited in the sum of
R5 245 496,09
and of Transaf (Pty) Limited in the sum of R1 027 989,82; put
otherwise, it has not been proved that the intended
effect of clause
3.3 and 3.4 was to write off the indebtedness of the two companies
in the books of Boland Bank. In my judgment
the agreement, properly
construed, provided for the indebtedness of Muller and his companies
in the amount of approximately R11,5
million to be redeemed through
the realisation and appropriation of the assets, as defined, for a
net amount of not less than
R12 million during a contemplated period
of three months of the effective date.
[105]
The rewording of clause 3.4 of the deed of agreement in the manner
sought by the plaintiff would not be incongruent with
my view of the
proper construction of the word 'liabilities' in clause 3.3 thereof.
However, no practical purpose will be served
by granting the relief
sought by the plaintiff in this respect if the result is not to give
the word 'liabilities' in clause
3.3 the meaning that the plaintiff
would seek to attach to it. For the reasons given earlier, a
rectification of clause 3.4 as
sought would not give that result.
[106]
An order will therefore be made dismissing claim A.
Prescription
[107]
Turning now to the issue of prescription. The period of extinctive
prescription applicable to the plaintiff's claims under
claims B and
C is three years.
30
These claims, being the money claim founded on the debatement of
account in terms of claim B, including, insofar as might emerge
on
such debatement, any claim for the purchase price (claim C), all
arise from the execution of the realisation process in terms
of the
May 1988 agreement. Therefore, subject to the incidence of
s 12
of
the
Prescription Act 68 of 1969
, the debt became due, and
prescription started to run, upon the completion of the realisation
exercise.
[108]
The defendant specially pleaded that a period in excess of three
years had intervened since the alleged debts had become
due and that
the plaintiff's claims had therefore been extinguished by
prescription. (It hardly needs mention that the onus of
establishing
that the alleged claims have prescribed burdened the defendant.)
The plaintiff replicated to the special plea.
In hisreplication,
Muller pleaded that (i) the realisation process was concluded only
on 15 December 1994 when the 36T account
was closed;
31
(ii) (in the alternative to (i)) that the defendant 'wilfully
represented to the plaintiff that the full amount of the realisation

was utilised to liquidate the plaintiff's debt' to the bank; and
(iii) (in the further alternative) that the plaintiff only became

aware of the fact that the proceeds of the realisation process
(described in the replication as 'the purchase price') were utilised

to pay the liabilities of Transaf (Pty) Ltd and SA Trucking (Pty)
Ltd, in the amounts of R1 027 989,82 and R5 245 496,09,
respectively,
for which Boland Bank was in fact itself liable.
[109]
Section 12 of the Prescription Act provided (before its amendment in
terms of s 68 of Act 32 of 2007), insofar as currently
relevant:
12
When
prescription begins to run
(1)
Subject to the provisions of subsections (2) and (3),
prescription shall
commence
to run as soon as the debt is due.
(2) If
the debtor wilfully prevents the creditor from coming to know of the
existence of the debt, prescription shall not commence
to run until
the creditor becomes aware of the existence of the debt.
(3) A
debt shall not be deemed to be due until the creditor has knowledge
of the identity of the debtor and of the facts from
which the debt
arises: Provided that a creditor shall be deemed to have such
knowledge if he could have acquired it by exercising
reasonable
care.
[110]
I shall deal firstly with the date upon which the debt became due.
[111]
I reject the opinion of Mr Barnes that the realisation process in
terms of the May 1988 agreement could not be said to have
been
completed while the 36T account remained in operation. This evidence
was volunteered in the context of the debit balances
on the
realisation (38T) and operations (37T) accounts having been
transferred to the 36T account, which thereafter continued
to
operate for several years. It is plain from the express terms of the
May 1988 agreement that the realisation process was completed
when
all 'the assets' (as defined) had been realised. That followed from
the definition in the agreement of the term 'completion
date'. It
was not in dispute that this occurred during March 1989.
[112]
The finalisation of the realisation process was reported on to the
bank by Dr Ferreira in a letter dated 3 July 1989, in
which he
stated that he would be discussing the content thereof with Muller.
Muller would in any event have been well aware of
the completion of
the realisation exercise by reason of his own direct involvement in
the process, culminating in the purchase
of the last of the
unrealised assets by entities controlled by himself. Muller's
evidence was to the effect that he thereafter
sought to ascertain
from Mr Hickman - Ferreira by then having no further active role in
matters - when he could expect to be
paid the amount of about R5,5
million he was expecting after the completion of the realisation
process. He queried how he could
still be indebted to the bank, as
it claimed. Muller would not have been addressing any such enquiries
to Hickman if he did not
understand the realisation process to have
been completed.
[113]
Muller certainly had no reasonable grounds not to appreciate that
the realisation process was complete when all the assets
to be
realised had been sold. That much was expressly recorded in the May
1988 agreement. (To the extent that Muller claims to
have been
denied insight into the signed text of the agreement until
1998,
it bears pointing out that the text of the draft signed by him in
April 1988 does not differ materially in this respect.)
[114]
It is unnecessary for present purposes to determine the exact date
of the completion of the realisation process. It appears
most
probable that that the relevant date was during March 1989, but it
is without doubt that it was some time in that year,
before 3 July
1989.
[115]
In my judgment there is no merit in the plaintiff's reliance on
s
12(2)
of the
Prescription Act. In
Jacobs
v Adonis
1996
(4) SA 246
(C), it was found, albeit
obiter,
that
the expression 'wilfully' was not necessarily restricted to
connoting a fraudulent intention by the debtor to deceive. Assuming

the correctness of this construction, the expression 'wilfully
prevents' nevertheless unambiguously indicates the doing of

something by the debtor deliberately
32
with the intention of thereby preventing the creditor from coming to
know of the existence of the debt. The adverb 'wilfully',
in the
context in which it is employed in
s 12(2)
of the Prescription
Act,pertains to the verb 'prevent'. The wilfulness concerned must,
for the provision to apply, be directed
to an act of prevention by
the debtor. The mere conveyance of an incorrect version of the facts
by the debtor, without any intention
thereby to prevent the creditor
from coming to know of the existence of the debt, would not bring
the provision into play. The
plaintiff has not proved any
intentional act by the plaintiff to prevent him coming to know of
the existence of the debt. It
is understandable therefore that
s
12(2)
was only lightly touched upon in the plaintiff's heads of
argument.
[116]
The reliance by the plaintiff on
s 12(2)
of the
Prescription Act is
in any event something of a red herring if the circumstances are
such that Muller could have acquired knowledge of the debt by
the
exercise of reasonable care. Professor M.M. Loubser identifies the
corollary of this axiom in
Extinctive
Prescription
(Juta,
1996) at p.102, with his observation that 'It will usually be
unnecessary to determine the precise ambit of
s 12(2)
because in
terms of
s 12(3)
the prescription period will in any event not begin
to run while the debtor is [for good reason] ignorant of the
identity of
the debtor and of the facts from which the debt arises.
33
[117]
Muller's evidence is to the effect that he was given the run around
by bank officials, most notably Mr Hickman, in the period
from 1990.
According to him, he was also unable to obtain satisfactory
explanations from Dr Ferreira, whom he said he visited
for this
purpose at Ferreira's home in Johannesburg. The proper and available
course, if Muller's evidence in this regard is
to be accepted, would
have been for him at that stage to institute action for a statement
and debatement of account and for payment
of any amount proven due
to him as a consequence thereof.
[118]
The plaintiff contended that it was only in the context of his
examination of the papers at the enquiry into the affairs
of his
insolvent estate in 1998 that he could first reasonably have
acquired knowledge of the facts from which the alleged debt
arises.
In argument in support of this contention the plaintiff's counsel
relied heavily on the judgment of the Supreme Court
of Appeal in
Minister
of Finance and others v Gore NO
2007
(1) SA 111
(SCA). That matter concerned a claim instituted in
January 1999 by the liquidator of a company which before its winding
up had
tendered unsuccessfully for the award of a government tender
contract. The claim was one for damages arising out of the
fraudulent
and corrupt conduct of certain State employees who had
dishonestly secured the award in favour of another tenderer in 1994.
A
certain Mr Rabie, who would appear to have had a proprietary
interest in the unsuccessful tenderer, and who was the principal
witness on behalf of the liquidator plaintiff at the trial, was
convinced that the successful tenderer must have obtained the
award
through some or other chicanery. I do not think it necessary to
detail the course of subsequent events which are described
in the
judgment, but it is evident from a consideration of them that the
allegations made by Rabie in a series of unsuccessful
endeavours to
expose the fraud were predicated on no more than a shrewd suspicion;
this, despite his conscientious endeavours
to get to the truth of
the matter. It was only in a report of a forensic investigation
undertaken by a government team in 1998,
that Rabie eventually found
evidence to bear out his suspicion. The Court found (at para. [25])
that Rabie had 'acquired the
minimum knowledge need to institute
action only at the end of 1998'. Applying
s 12(3)
of the
Prescription Act, prescription
was found only to have commenced to
run from that point.
[119]
At para. [17] of the judgment in
Gore
the
Court pointed out that the SCA and the late Appellate Division had
'in a series of decisions, emphasised that time begins
to run
against the creditor when it has the minimum facts that are
necessary to institute action. The running of prescription
is not
postponed until a creditor becomes aware of the full extent of its
legal rights, nor until the creditor has evidence that
would enable
it to prove a case "comfortably".'
Van
Staden v Fourie
1989
(3) SA 200
(A) at 216B-F; the minority judgment of Harms JA in
Drennan
Maud & Partners
v
Pennington Town Board
[1998] ZASCA 29
;
1998
(3) SA 200
(SCA) ([1998]
2 All SA 571)
at 212-213 (SA) and
Nedcor
Bank Bpk v Regering van die Republiek van Suid-Afrika
[2000] ZASCA 154
;
2001
(1) SA 987
(SCA) 9[2001]
1 All SA
107)
at para.s [11] and [13] were cited in support of the proposition.
[120]
In the current matter Muller professes that he was dissatisfied with
the result of the realisation process; in particular
he could not
understand why the Bank was claiming that he remained indebted to
it, whereas he had been led by Ferreira to expect
that he would
receive payment of more than R5 million at the conclusion of the
process. I have already found that theevidence
does not support
any proper basis for Muller's alleged apprehension, but accepting
for present purposes the cogency of his evidence
in these respects,
he had an available remedy. It was the same remedy that he chose to
use when action was instituted in 1998:
a claim for an accounting, a
debatement of such accounting and for payment of whatever sum
appeared thereupon to be due to him.
He had the knowledge necessary
to institute proceedings in pursuance of that remedy. Cf.
Absa
Bank Bpk v Janse van Rensburg
supra,
loc cit.
34
He was aware that his claim lay against the bank; he knew it was
premised on the agreement he had signed; and the outcome of
the
realisation process that had been carried out in terms of that
agreement. He was also aware of the purchase price fixed in
terms of
the agreement and, to the extent that he may have thought it fell to
be paid outside of the realisation process, he
knew or should have
known that it was payable when the realisation process was
completed. He knew, or should have known that
the realisation
process ended on 'the completion date' as defined in the agreement
(it mattered not whether he had regard to
the April draft or the May
1988 agreement signed by both parties) and that he was
thereuponentitled to an accounting. The provisions
of
s 12(3)
of the
Prescription Act offer
the plaintiff no succour in the
circumstances.
[121]
In the result the defendant has established that claims B and C, if
they had any basis in fact, were extinguished by prescription
during
1992, many years before action was instituted in 1998.
35
Claim
D
[122]
Claim D is in respect of the repayment to Muller of certain sums of
money allegedly mistakenly paid by him to the bank after
the
conclusion of the May 1988 agreement. These payments were made
allegedly as a consequence of certain misrepresentations made
to him
by officials of the bank. The claim is pleaded in the form of a
condictio
indebiti.
The
amount claimed was amended twice during the course of the
plaintiff's counsel's opening address. The effect of those
amendments
was substantial. The sum claimed was amended from R18 309
579 to R11 780 980, and then to R15 780 980. (In the original
particulars
of claim, the amount claimed under this head had been
R15 534 192. My attention was drawn by the bank's counsel to trial
particulars
furnished by the plaintiff which, on analysis, gave a
total in yet a different sum in respect of the claim.)
[123]
In the course of giving the reasons for making the ruling for a
separation of issues in terms of
rule 33(4)
, I mentioned other
unsatisfactory features concerning the state of preparedness of this
claim for trial and concluded '[I]t is
not convenient for the court
to embark on [the trial of] a claim that has not been clearly
formulated or adequately defined and
in respect of which the first
defendant will no doubt press for [yet] further particulars.' I
therefore stayed the trial in respect
of claim D until after the
determination of the issues identified for trial separately and
initially in terms of the ruling made
in terms of
rule 33(4).
I
indicated in the ruling that I would give directions in this
judgment in respect of the disposition of any outstanding issues
in
respect of claim B and in respect of the trial of claim D.
[124]
The upholding of the bank's special plea of extinctive prescription
has disposed of claim B. It seems appropriate that the
plaintiff
should be directed, if he wishes to pursue claim D, to convene a
pre-trial conference with the first defendant's legal

representatives to identify and address the matters necessary to
enable the trial of the claim on the basis of an appropriate
state
of preparedness for trial by both parties. When the parties are
satisfied that the claim is ready for trial, which shall
not be
before any requests for yet further trial particulars and/or further
discovery (if such are to be directed) have been
satisfied, they may
apply in chambers to the Judge President for the early allocation of
a date for the hearing. Having regard
to the passage of time, it is
clearly desirable that if this claim is to go to trial, that should
happen as soon as practicably
possible.
Costs
[125]
Both sides argued that costs should follow the result. I agree that
this is appropriate. The employment by the parties of
two counsel
was reasonable having regard to the substantial volume of evidential
material that had to be traversed and the relative
complexity of
some of the issues. In the context of the employment by the
plaintiff of Mr Barnes, as an expert witness, it was
reasonable for
the first defendant to have availed of the services of Mr Greenbaum.
I intend to allow Mr Greenbaum's qualifying
fees as part of the
bank's taxable costs of suit.
Order
[126]
The following orders will issue:
1.
Claims A, B and C in terms of the amended particulars of claim are
dismissed with costs.
2. The
costs award in favour of the first defendant shall include the costs
of two counsel and the qualifying fees of Mr Hilton
Greenbaum.
3. The
plaintiff is given leave, subject to compliance with the directions
given in paragraph
[124]
of
this judgment, and if so advised, to enrol claim D for hearing.
A.G.
BINNS-WARD
Judge
of the High Court
Order
[126]
The following orders will issue:
1. Claims
A,
B
and
C
in
terms of the amended particulars of claim are dismissed with costs.
2. The
costs award in favour of the first defendant shall include the costs
of two counsel and the qualifying fees of Mr Hilton
Greenbaum.
3. The
plaintiff is given leave, subject to compliance with the directions
given in paragraph [124] of this judgment, and if so
advised, to
enrol claim D for hearing.
A.G. BINNS-WARD
Judge of the High Court
1
The provisional order of sequestration granted on 30 June 1997 was
made final on 18 August 1997.
2
Cf.
Gralio
(Pty) Ltd v DE Claassen (Pty) Ltd
1980
(1) SA 816
(A) at 824B-C.
3
The underlining is in the original. Appendix 1 listed 106 trucks and
gave an indication of at least 104 trailers of various identified

types. It contained no reference to any road transportation permits.
4
In the plaintiff's heads of argument it is contended that the amount
owed by the defendant to the plaintiff is in the sum of
R6 520
598,64 as set out in the report of the accountant called by the
plaintiff, Mr Claude Barnes. This allegation begs the
question why a
debatement of account was claimed, or is being persisted with. But
nothing turns on this anomaly.
5
In its plea the defendant alleged that it had already accounted to
the plaintiff through his representative, Dr Charles Ferreira.
As
apparent from the discussion elsewhere in this judgment, the proper
characterisation of Ferreira's role in the realisation
process was a
matter in contention between the parties.
6
It was later clarified that the word including should be read as
'includes' or 'included'
7
'
Section 1(1) and 1(2) of the Evidence Act, 1938 (c 28).
8
In this regard the authors refer to s 8 of the English Civil
Evidence Act, 1995, which provides:
8
Proof of statements contained in documents
(1)
Where
a statement contained in a document is admissible as evidence in
civil proceedings, it may be proved-
(a)
by
the production of that document, or
(b)
whether
or not that document is still in existence, by the production of a
copy of that document or of the material part of it,
authenticated
in such manner as the court may approve.
(2)
It
is immaterial for this purpose how many removes there are between a
copy and the original.
(An
affidavit such as that made by Dr Ferreira in the current matter
would in England and Wales by admissible as evidence by
reason of
the provisions of s 2 of the English Civil Evidence Act.)
9
Bewysreg
at
p. 498.
10
See footnote
8,
above.
11
Cf.
Da
Mata v Otto
1972
(3) SA 858
(A) at 866H-867C.
12
In the particulars for trial furnished by the defendant it was
alleged in answer to the question 'Who on behalf of the first

defendant conducted the realisation account?' that this had been
done by 'Various officials of the first defendant under the

supervision of J.A.P. Hickman'.
13
It was common ground that Lubbe was a Boland Bank official seconded
to work fulltime at the Wadeville premises during the realisation

process.
14
The Master declined to appoint Ferreira as liquidator because he was
registered as the secretary of the companies.
15
Incorrectly
described as 'Eyvers' in the transcript of evidence.
16
It would appear that Muller and the companies had traded
indiscriminately under the umbrella of the designation 'SA
Trucking'.
17
Muller
claimed that the period involved was of about a year or more;
whereas Mr Francois van Zyl, the manager of the Kroonstad
branch at
the time, who was also criminally charged, said it was no more than
6 months, between November 1985 and April 1986.
Van Zyl impressed me
as having a more coherent recollection of the time periods involved
than Muller. Van Zyl was not aware at
the time of the bail
conditions described by Muller, but confirmed that there had been no
contact by him with Muller during this
period and that Muller had
informed him about the bail conditions after the completion of the
criminal proceedings.
18
I
gained the impression from Muller's evidence that he appeared to
consider that the effect of the criminal proceedings was to

characterise the hire purchase contracts concluded in terms of the
scheme devised by him and the bank as invalid. The basis for
any
such impression was not explained. It appears from the evidence of
Mr Van Zyl (the then manager of the bank's Kroonstad branch),
who
was also criminally charged and convicted of a single count of
'uitgif van 'n vervalste dokument', that the basis of the
charge was
the falsification of the date of the transaction and not the
transaction itself.
19
See
clauses 3.1.5 and 11 of Appendix 3 to the May 1988 agreement, and
para.s 6 and 7 of Dr Ferreira's affidavit.
20
Rossouw
was appointed as the liquidator of the companies in the Muller group
that were placed into voluntary liquidation in the
course of the
implementation of the May 1988 agreement.
21
See
para. 11 of Dr Ferreira's affidavit.
22
The
defendant made an admission to this effect recorded in the minutes
of a pre-trial conference held between the parties' respective
legal
representatives on 21 November 2008.
23
It
is not in dispute that the participation mortgage bond
('deelnemingsverband') liability referred to in the Kritzinger
letter
remained in place (as indeed indicated in the text of the
l
2
e
4
tter).
24
See
para.
[13].
25
It will be recalled that in terms of clause 4.3, the payment of the
purchase price was to occur 'as and when realisation of the
Muller
Group is effected and cash received via the realisation process in
terms of clause 6.'
26
In a letter to Hickman, dated 20 November 1987, Ferreira enclosed
draft financial statements as of 30 June 1987 in respect of
SA
Trucking (Pty) Ltd, Heavy Transport and Plant Hire (pty) Ltd and Two
Way Transport (Pty) Ltd and commented thereon,
inter
alia,
as
follows: 'Die meeste van die huurkoopooreenkomste moet gekanseleer
word, retrospektiewelik, en vervang word deur notariele
verbande. As
u dus die verandering van sekuriteite goedkeur, sal die notas
dienooreenkomstig verander maar die syfers sal nie
in totaal
verander nie.' At that stage Ferreira would appear, judged by the
content of this letter, to have had in mind a consolidation
of all
Muller's debt, including amounts owed to other banks, in Boland
Bank's books, on the basis that the consolidated debt
would be
redeemed by monthly payments commencing at R50000 per month in 1988
and rising to R100000 per month in 1990 and following
years.
27
These included the agenda of the board of directors' meeting at
which the bank considered the proposal put up on Muller's behalf
by
Ferreira in April 1988. The motivation set out in the agenda
document makes no mention whatsoever of the writing off of debt,
or
the assumption by the bank of any of the debtor companies'
liabilities.
28
It was in this account that the facility to settle Muller's exposure
to the Wadeville branch of the Standard Bank referred to
in clause
4.4.2 of the May 1988 agreement was provided.
29
It would appear from the information in Ferreira's proposal letter
of 20 April 1988 that these liabilities were relatively

insubstantial. There was no evidence as to whether Muller in fact
settled these liabilities. In answer to a question directed by
the
bank's legal representatives at a pre-trial conference, the
plaintiff stated that he had not paid all liabilities of the
relvant
companies prior to the effective date (1 May 1988).
30
See
s 11(d)
of the
Prescription Act.
31
In
this connection it should be mentioned that the plaintiff's
estate was provisionally sequestrated on 30 June 1997; provisional

trustees appointed on 14 July 1997; a final order of sequestration
was made on 18 August 1997 and the appointment of the trustees

pursuant to the final order occurred on 20 October 1997. The
plaintiff relies on the provisions of
s 13
of the
Prescription Act,
which
delay the completion of extinctive prescription in certain
circumstances, including when the creditor is under some or other

legal impediment affecting its ability to institute proceedings to
enforce its claim, to allege that the three year period of
extinctive prescription had not expired when summons was served on
29 June 1998 by reason of the legally disabling effect of the

intervention of the plaintiff's insolvency before 14 December 1997.
In view of the finding, made later in this judgment, that
the
realisation process was completed during 1989, it is unnecessary to
consider this aspect of the plaintiff's reply to the
special
defence.
32
Subject to the rider that there must be an accompanying intention to
prevent the creditor obtaining knowledge of the existence
of the
debt, I agree with the suggestion expressed in Loubser,
Extinctive
Prescription
(Juta,
1996) at pp.101 -102 'that positive misrepresentation or active
conduct will usually be required for the application of
s 12(2)
, but
inaction or non­disclosure will be sufficient where a fiduciary
relationship exists between the debtor and creditor
which imposes an
affirmative duty of disclosure on the debtor.'
33
The words within square brackets are my own.
34
See para.
[18],
above.
35
This conclusion rendered the determination of the plaintiff's claim
for rectification strictly unnecessary. I nevertheless considered

that, in the peculiar circumstances of the case, it would be in the
interests of justice to deal fully with the rectification
issue,
certainly to the extent that it bore on the existence of the alleged
debt in the first place.