Circulate to Magistrates: Yes / No Reportable: Yes / No Circulate to Judges: Yes / No IN THE HIGH COURT OF SOUTH AFRICA (Northern Cape Division) Date heard: 2005 11 25 Date delivered: 2005 12 02 Case no: 293\05 In the matter of: SCANIA SOUTH AFRICA (PTY) LTD PLAINTIFF versus THE AL 2 VERVOER TRUST DEFENDANT Coram: JUDGEMENT : 1. The plaintiff has instituted an action for provisional sentence for an amount of R2 417 036.40 based upon an acknowledgement of debt executed by the defendants on 17 October 2001 in their capacities as trustees of the Al2 Vervoer Trust. The
Page 2 acknowledgement of debt reflects the indebtedness of the said trustees in the sum of R2 892 205.30, but a lesser amount is being claimed since certain payments have been credited on the defendants account. 2. In addition to the aforementioned acknowledgement of debt, the defendants also signed on the same date a resolution to enter into an acknowledgement of debt with Scania SA (Pty) Ltd in respect of monies due to Scania SA (Pty) Ltd for arrear rentals, repairs and maintenance and an open account for the vehicles rented from Scania. In addition thereto, both defendants also signed in their per sonal capacities, deeds of suretyship on 17 October 2001 in respect of the aforementioned trust s indebtedness to the plaintiff. It is not in issue that the acknowledgement of debt, which is the liquid document relied upon by the plaintiff for provisional sentence, had been duly executed by the defendants as trustees, nor is the authenticity of the defendants signatures on the acknowledgment of debt in issue. 3. The defendants have raised the following defences through the answering affidavit of the first defendant: a) The first defendant has alleged that no payment had been made in terms of the acknowledgement of debt on or after 1 December 2001. He avers further that the full amount in terms of the acknowledgement of debt had consequently
Page 3 become due and payable on 2 December 2001 and that the plaintiff s action had become prescribed, given the fact that summons had only been issued on 24 March 2005. b) On the merits the first defendant has contended firstly that he had been informed by one Gibert of the plaintiff s company that the acknowledgement of debt was required by the plaintiff purely for internal purposes and that Gibert had undertaken not to enforce the acknowledgement of debt. It was further alleged by the first defendant that it was on this basis that he and his wife (second defendant) had signed the acknowledgement of debt. c) The second defence raised on the merits by the first defendant concerns the computation of the outstanding amount, in that it is alleged that the first defendant has no knowledge of how the amount claimed in the summons is made up and arrived at. d) Thirdly the first defendant has raised a counterclaim as a defence, which counterclaim allegedly arises from the repudiation of an oral agreement. This counterclaim is said to have been issued against Citibank under case number 02/2004 in this Court. 4. With regard to the defence of prescription, supra, Mr. Snellenburg for the defendants has, very wisely in my view, chosen not to advance much argument thereon. It is clear from the papers before me that a number of payments had been made in respect of the arrear accounts which form the subject matter of the acknowledgement of debt. These payments were made on 5 November 2001, 21 January 2002, 3 May 2002, 3 June 2002, 16 July 2002 and 17 December 2004. In an affidavit in rejoinder filed on behalf of the defendants (with the permission of this Court in an earlier order), it has been admitted that further payments were made between January 2002 and December 2002. They contend
Page 4 that all these payments had been allocated to other accounts and that such payments bear no relation at all to the acknowledgement of debt. It was also stated in the said affidavit that the fact that the amounts paid correspond exactly with the amount stipulated as monthly payment in the acknowledgement of debt, is a mere coincidence. I find this explanation singularly unpersuasive, to put it mildly. It is highly improbable in my view that the amounts paid would coincidentally match those stipulated in the acknowledgement of debt. Furthermore and in any event, it is quite enlightening that in respect of one such payment made via internet banking, the following note appears: Arrears account. It is also clear from the papers before me that the trust had been conducting another account on an ongoing basis with the plaintiff. I am consequently satisfied that there is absolutely no merit in the defence of prescription which had been raised by the defendants herein. 5. With regard to the first defence on the merits, namely the circumstances under which the acknowledgement of debt had been signed, it must be noted at the outset that in proceedings such as these, I have to consider the probabilities of the matter on the papers before me. It is not possible to determine the veracity of the averments contained in the conflicting versions of the parties in this regard. In considering the probabilities on this defence, the following matters stand out:
Page 5 a) Firstly, it is quite surprising that the defendants also signed a resolution and deeds of suretyship on the very same day on which the acknowledgement of debt had been executed. According to the first defendant, Mr Gibert of the plaintiff company, had requested him to sign the acknowledgment of debt in order to appease Scania s head office in Sweden whose officials were due to visit South Africa during that time. According to him this document would have been used for internal purposes only to show that the trust has acknowledged its indebtedness to the plaintiff. This version does not explain the need for further documents such as the resolution and deeds of suretyship to be executed. b) Secondly, if the first defendant s averments are correct, it would be tantamount to Gibert perpetrating fraud upon, at the very least, his company s head office in Sweden so as to mislead them with regard to the fact of the trust s indebtedness and payment arrangements to the plaintiff company. I find it hard to believe that an employee in a position as senior as Gibert would go to these lengths to assist the trust with which he had no more than a normal business relationship. c) In the third place, it is conceivable that, if the first defendant s contentions in this regard are correct, the plaintiff company would have adopted the same modus operandi in respect of other clients whose accounts were in arrears with the plaintiff, in order to appease the head office officials who were due for a visit to South Africa at that time. It makes no sense whatsoever that a company like the plaintiff would conduct its business in this manner, namely to collate acknowledgements of debt, resolutions and deeds of suretyship left right and centre from its clients instead of collecting the monies due to it from such clients. In the circumstances therefore I have no hesitation in rejecting this defence advanced by the defendants as highly improbable.
Page 6 6. The second defence raised concerns the calculation of the outstanding amount. It is trite in our law that a plaintiff in provisional sentence proceedings is entitled to claim less than the face value of the liquid document (in casu the acknowledgement of debt), without having to offer any explanation for it. In the present matter the plaintiff has set out fully the computation of its claim in its summons and also in its replying affidavit in terms of Rule 8(5). The plaintiff has thus gone further than it is required to do in law in explaining that the amount claimed in the provisional sentence summons is the amount originally reflected in the acknowledgement of debt less the total of all amounts paid subsequently by the defendants. The important enquiry is simply whether the acknowledgement of document in fact reflects an acknowledgement of indebtedness for an ascertained amount of money. See in this regard: Harrowsmith v Ceres Flats (Pty) Ltd 1979(2) SA 722 (T) at 743 G H. Rich and others v Lagerwey 1974(4) SA 748 (A) at 754. Consequently I am of the view that this particular defence on the merits is also devoid of any substance whatsoever. 7.1 In the third place the defendants rely on a so called counterclaim against Citibank as a defence. In this regard the first defendant has alleged in his answering affidavit that at a meeting attended by representatives of the plaintiff, the defendants and Citibank
Page 7 officials, an oral agreement had been reached in the following terms: a) That the Al 2 Vervoertrust would take over 13 Scania truck tractors in terms of an instalment sale agreement between the trust and Citibank. b) That the trust would be entitled, once a truck tractor has covered 800 000 kilometres or has reached the age of 5 years, whichever occurs first, to trade same in for a new similar Scania truck tractor from the plaintiff. c) Once the trade in as aforementioned had occurred, the instalment sale agreement to be concluded would be cancelled against payment of an amount of R240 000.00. d) Once the events referred to in (b) and (c) above had taken place, the parties would conclude a new instalment sale agreement on the same terms in respect of a new Scania truck tractor. e) That the plaintiff would sell the Scania truck tractor to the trust by way of a separate discounting agreement with Citibank and that Citibank would provide financing to the trust to purchase the Scania truck tractor from the plaintiff. f) All thirteen truck tractors were then subsequently purchased by the trust in terms of instalment sales agreements concluded on 24 December 2001 with Citibank subject to the conditions set out hereinabove. 7.2 The first defendant further contended that the trust had suffered damages inasmuchas Citibank had repudiated the abovementioned agreement by failing or refusing to permit the trust to trade in a Scania truck tractor on a new one once the old truck tractor had reached 800 000 kilometres and by failing or refusing to enter into a new instalment sale agreement with the trust in respect of a new Scania truck tractor. The damages sued for under case
Page 8 number 02/2004 against Citibank amounts to R4 521 932.00. 7.3 The fundamental problem with this defence is that there is no indication: i) How the amount claimed against Citibank is calculated and arrived at; and ii) How the fact of a claim against Citibank affects the present plaintiff, if at all. 7.4 Mr. Snellenburg has quite fairly conceded that he has serious problems with regard to this particular defence. While it is indeed averred by the first defendant in his answering affidavit that a similar claim is to be issued against the plaintiff herein, same has not materialised at this stage. This so called counterclaim is based upon a transaction extraneous to the one which underlies the acknowledgement of debt. In such circumstances, provisional sentence would be granted where the defendants had failed to establish the probabilities of success in their favour on the socalled counterclaim. See in this regard: Reichenberg v Röntgen 1983(3) SA 745 (W) at 750 H. In this regard the defendants bear the onus to show on a preponderance of probabilities that the plaintiff is unlikely to succeed in discharging the onus on it in the principal case, and they also bear the onus to prove on a preponderance of probabilities their counterclaim as a defence to an action for provisional sentence. See in this regard generally the discussion in Erasmus Superior Court Practice, at B1 82 and Malan et al Provisional Sentence on Bills of Exchange, Cheques and Promissory Notes at 192.
Page 9 In the circumstances I am of the view that this third defence is also completely lacking in any merit. 8.1 Mr. Snellenburg has, as a last resort, contended that I should in any event exercise my discretion in postponing the action for provisional sentence sine die and order that the summons in the provisional sentence action would serve as summons in the principal action and that defendants answering affidavit would serve as notice of intention to defend the principal action so that the defendants are granted an opportunity to defend same. In this regard he has referred me to Lesotho Diamond Works Ltd v Lurie 1975(2) SA 142 (O) at 148 H 149 A. 8.2 I agree with the submission of Mr. Rossouw for the plaintiff that this would be improper, to say the least. In Ottica Meccanica Italiana v Photogrammetric Engineering (Pty) Ltd 1965(2) SA 276 (D) at 288 F 289 C, Friedman J had set out fully the legal principles pertaining to provisional sentence matters. In applying those principles in the present matter, I am satisfied that the defendants have not made out any defence whatsoever either in limine or on the merits. The defendants have admitted the authenticity of the signatures attached to the liquid document, namely the acknowledgement of debt. In addition thereto, I am satisfied that the sum claimed is for an ascertained amount of money and that the indebtedness of the defendants have been proved in the amount claimed. 9. The following order is made: a) I grant provisional sentence against the defendants in the sum of R2 417 036.40 together with interest as follows:
Page 10 From 1 April 2002 16,0% From 18 June 2002 17,0% From 13 September 2002 18,0% From 17 June 2003 16,5% From 18 August 2003 15,5% From 10 September 2003 14,5% From 17 October 2003 13,0% From 15 December 2003 12,5% From 16 August 2004 12,0% b) The defendants are ordered to pay the costs. SA MAJIEDT JUDGE ADVOCATE FOR THE PLAINTIFF : ADV P ROSSOUW ADVOCATE FOR THE DEFENDANTS : ADV N SNELLENBURG ATTORNEY FOR THE PLAINTIFF : HAARHOFF S ATTORNEY FOR THE DEFENDANT : DUNCAN & ROTHMAN DATE OF HEARING : 2005 11 25 DATE OF JUDGEMENT : 2005 12 02