23rd
July it was R110 062.94 in credit. On 25th July it was overdrawn
by R233 850.30 as a result of a cheque for R286 200.10 payable to
Namibia Sugar Packers being debited and on 26th July the overdraft
increased to R544 082.70 as a result of the sum of R3 09 005.55 plus
a R10 charge being debited in respect of the counterfeit notes.
On 27th July the overdraft was reduced to R144 082.70 with the
transfer of R400 000 from the call account. The call account
was opened on 29th June with a deposit of R500 000 and the only
withdrawal in July was the withdrawal of R4 00 000 which was
transferred to the current account in order to reduce the
overdraft.
I
will now highlight some of the answers given by the plaintiff during
cross-examination. He was asked about the averment in the original
particulars of claim that immediately prior to the exchange
transaction the bank knew or should have known that the "Plaintiff
would use the sum of R309 005.55 for any legal purpose he deemed
meet." The plaintiff denied giving any such instruction to his
lawyers. He gave his lawyers the same account as that given to the
Court, he said. However, it was not until further particulars dated
23rd October, 1991 were delivered that an averment was made that the
sum received in exchange for the notes was paid over to a third
party.
The
plaintiff was also asked about a statement which he made to the
police on 26th July, 1990. According to the statement Jeremia,
although his name is not mentioned, asked the plaintiff on 22nd
July, 1990 if he had enough rands to exchange US$119 700 and
the plaintiff then offered to exchange the dollars the
following day at the bank. The plaintiff took the dollar notes
from Jeremia and on Monday, 23rd July he went to the bank and
exchanged them for R308 359.80. That figure is obviously
incorrect by about R645. The statement continues:
"I
took the money and went to my business where I handed over the R3 08
359.80 to the person. This was the man who rented the office from
me. After I had handed over the money to him, the man gave RIO 000
to me. I am still in possession of the R10 000. At about 13:00 the
same day I was invited to a meal at the Guest House. I left the man
to whom I had handed over the money, there at my business and went
to the Guest House. I arrived back at my business at about 14:00 and
found that the man was not in his office. Up to this date I have not
seen him again. On Wednesday 90.7.25 at about 14:00 Johannes who
works at the First National Bank, told me that the dollars that I
had exchanged, were forged."
The
plaintiff agreed that this was what he had told the police except
for the last sentence in which reference is made to Johannes
(obviously this is Johannes Shivolo) informing him on Wednesday,
25th July that the dollars were forged. The plaintiff said that he
could not recall saying such a thing to the police. The plaintiff
reiterated that the first time that he heard that the dollars were
forged was on Thursday, 2 6th July which was, of course, the day
when the statement was made. The only explanation the plaintiff
could offer for what is set out in the statement was that there
might have been a misunderstanding between himself and the police
due to his lack of fluency in Afrikaans. A few lines later the
statement continues:
"On
90.7.25 I for the first time heard at the bank that the dollars were
forged."
Again
the plaintiff said that this might have been as a result of a
misunderstanding between himself and the police officer who took the
statement because he did not go to the bank until 26th July and it
was only on that day that he discovered that the dollar notes were
forged.
Towards
the beginning of the statement reference is made to Jeremia
appearing at the plaintiff's business with two men the day after
Jeremia was given an office there but nowhere in the statement is
there a reference to two men arriving on Monday, 23rd July with
the US$19 700 or of two men waiting with Jeremia while the notes
were exchanged or of RIO 000 being given to Jeremia who in turn
handed that sum to the plaintiff. The statement is singularly
silent on the role played by the two unknown men in the
transaction and the plaintiff was asked about this peculiarity.
He said that it may have been a mistake by the police officer who
took the statement or it may have been that he
himself had not clarified it and told the right story. When
pressed on this he said that maybe the police officer and himself
had not understood each other.
Another
statement made by the plaintiff on 6th August, 1990 was also put to
him. According to that statement the earlier statement was incorrect
when it stated that the dollars had been received from Jeremia. They
had been received from a person introduced as Kloppers and the rands
received in exchange had been handed to a certain Gideon who gave
the plaintiff RIO OOO. However, the plaintiff had little or no
recollection of this second statement and insisted that he did not
know the names of the two men who came with Jeremia that Monday
morning. In fact later in cross-examination he denied that he gave
the two names to the police and as the officer who took the
statement is dead there the matter must lie.
Another
matter upon which the plaintiff was cross-examined was his earlier
testimony that Jeremia asked him to exchange the dollars and he
obliged because he hoped that in the future the two men might become
customers. It was pointed out to the plaintiff that this was not
entirely consistent with what is set out in the further particulars
of the particulars of claim where the following appears:
"The
two coloured males, who were at that stage unknown to plaintiff,
expressed an interest in purchasing goods from Plaintiff through
medium of paying for such goods with United States Dollars and
Plaintiff informed them that he had no knowledge whatsoever of
Dollars and was only prepared to sell goods to them in Rand. It was
then agreed that the Dollars would be handed by these two coloured
males to Plaintiff, which was duly done in the presence of Jeremiah
Bualala, and Plaintiff would then attend upon the Defendant for
purposes of cashing the Dollars and converting them into Rands.
Subsequent to Defendant having paid to Plaintiff the Rand value of
the said Dollars, the Plaintiff returned and in the presence of
Jeremiah Bualala he paid to the coloured males the Rand value of the
Dollars. The coloured males stated that they would return and
purchase the goods with the Rand value which they had received from
the plaintiff in respect of the Dollars but they never returned
again."
The
plaintiff was asked why he had not given this account in his earlier
testimony and he said that he had just responded to the questions
which had been asked and rather curiously he agreed, when it was put
to him, that he truth of what he said was determined by the nature
of the question being asked. Perhaps he did not mean this
literally.
Another
matter upon which the plaintiff was cross-examined was his evidence,
and he was adamant about this, that the document authorising
transfer of R400 000 from his call account to his current
account was signed on Wednesday, 25th July, 1990 and not on 27th
July as would appear from the face of the document. The
plaintiff begrudgingly accepted that there was in existence in July,
1990 an overdraft limit on his current account of R355 000. In
fact this is clear from the customer record kept by the branch. He
also agreed that on 25th July his current account was well within
that limit. It was only on 26th July when the sum of R309 005.55
was debited to the current account that the
overdraft exceeded R355 000. To explain why he signed the
transfer authorisation on 25th July when his overdraft was not
in excess of its limit the plaintiff said that he thought the bank
was requesting such authorisation in order to cover cheques
issued by him in respect of purchases of sugar from Namibia Sugar
Packers. Reference was made to cheques dated 3rd July, 1990 for
an amount of R170 431.75, 7th July, 1990 for an amount of R171
619.20, 20th July, 1990 for an amount of R286 200.10, 28th July,
1990 for an amount of R115 651.70 and 31st July, 1990 for an
amount of R300 723. The first two cheques had been debited to
the current account early in the month and the last two had
not been drawn when the transfer authorisation was signed and
this was pointed out to the plaintiff. His reply was that he knew
he would make the purchases in question and the transfer was
supposed to cover these purchases. However, when it was further
pointed out that this explanation would require clairvoyance on the
part of the bank he said he had no answer but insisted he was
telling the truth when saying that the transfer
authorisation was signed on 25th July. The plaintiff was also
asked about further particulars which state that at the time when
the request to transfer funds was made the bank did not inform
the plaintiff that his accounts had been debited and credited
in respect of the dollar transaction. It was pointed out that
if the further particulars were correct the authorisation could
not have been signed on 25th July because the debits and credit were
not made until 26th and 27th July. All the plaintiff could do
was to insist that he was telling the truth. What this part of
the cross-examination led to was the suggestion that the
document authorising transfer of funds was executed on 27th July at
which time, on his own version, the plaintiff knew that the dollar
notes were counterfeit. That it was given to confirm the
plaintiff's acceptance that R3 09 005.55 had been debited to his
current account and his acceptance that R400 000 would be
transferred from his call account to cover the overdraft
thus created in excess of the agreed limit. This the plaintiff
denied reiterating that the transfer was to cover the purchase of
sugar.
The
defendant called a number of witnesses including an agent in the
employ of the United States Secret Service who had examined a
sample of the notes which the plaintiff
exchanged
on 23rd July, 1990. I
need
not set out his evidence. It is clear that the notes were
counterfeit and although the quality is, in the agent's opinion,
fair to poor he agreed that it would be difficult for someone
without his training to detect the fact that they are counterfeit
notes.
I
come now to the evidence of Patrick Shoopala, the official at the
Oshakati branch of the bank responsible for foreign exchange in
July, 1990. He recalled the plaintiff coming to the branch on 23rd
July, 1990 with US$19 700 in US$100 notes and said that it was the
largest amount of dollar notes the branch had ever received. The
notes were in a cardboard box and he opened it and showed the notes
to the manager, Wilkie. There had been what the bank called "urgent
spreadings" issued by the bank's head office warning that
counterfeit notes were circulating in the country and accordingly he
and Wilkie examined the notes. The notes looked as though they were
genuine but Wilkie said he was not sure and informed the plaintiff
of his uncertainty. He suggested to the plaintiff that the amount
due on exchange be credited to his call account until the dollar
notes were cleared. However, the plaintiff said he wanted the amount
in cash and Wilkie agreed to this but told the plaintiff that if
something happened the bank would have to withdraw the amount from
his account. The plaintiff nodded his apparent assent. Shoopala then
calculated the amount due and gave it to the plaintiff and the notes
were sent to Windhoek. The only other evidence of any note given by
this witness in evidence-in-chief was that the plaintiff
was asked where he had obtained the dollar notes but he did not
mention where.
Shoopala
was cross-examined on his evidence concerning "urgent
spreadings" and it was apparent that his recollection in this
regard was rather hazy. However, a later witness, John Martin, who
was at the time the bank's resources manager at Windhoek, not only
confirmed that "urgent spreadings" dealing with
counterfeit notes had been sent out before 23rd July, 1990 but he
produced two sent out in 1989. One dated 11th April, 1989 warned
branches to exercise special caution when negotiating US$100 notes
as a large number of forged notes of this denomination were in
circulation and instructed branches to contact a Mr Grosse-Weischede
at the Windhoek branch before cashing them. One dated 9th April,
1989 referred in similar terms to US$50 notes and stated that if
doubt existed Grosse-Weischede should be consulted.
Shoopala
was also asked whether, in view of the uncertainty surrounding the
notes, head office was contacted. He could not remember but it is
clear from other evidence that neither head office nor
Grosse-Weischede was contacted. The witness was pressed on this and
agreed that the failure by the branch to advise head office of the
suspicions about the notes could have led to a loss of over R300
000. It was put to him that if he and the manager really had
entertained doubts it was inconceivable that head office would not
have been alerted. The witness had no answer. Shoopala was also
questioned on his evidence that the notes were accepted on a
collection basis. He insisted that they were and re-emphasised that
the plaintiff wanted cash. As he was a creditworthy customer the
bank agreed. However, later in cross-examination the witness agreed
that the notes were not accepted on a collection basis. By this I
think he probably meant that they were not accepted on a true
collection basis.
Shoopala
was also cross-examined on an affidavit which he made on 26th July,
1990 during police investigations. In that affidavit he said:
"I
thoroughly checked the dollars but I could detect no signs of the
notes being counterfeit. I even compared the notes with dollar notes
that I had in the bank but could see no difference. Even my Bank
Manager, Mr Wilkie, checked the notes and he could also not find any
difference."
Shoopala
was asked how this married up with his evidence-in-chief and he said
that the fact that they could see no difference between the notes
brought by the plaintiff and other notes did not mean that they were
sure that they were not counterfeit. He thought that he had told the
police that they had not been sure about the notes but he had no
recollection of this.
Another
matter upon which Shoopala was cross-examined was the transaction
whereby the plaintiff's call account was debited and the sum debited
was then credited to his current account. He agreed that he and
another bank employee, Johannes Shivolo, signed the debit form on
the call account for R400 000 on 27th July and that on the same day
a deposit slip for that amount was completed and signed by Shivolo.
He said that this had been authorised by the plaintiff and his
signature was therefore not required. Shoopala said that he was not
aware of the reason for the transfer and he signed the withdrawal
slip at the instance of Shivolo who showed him the plaintiff's
authorisation.
Shoopala
was also asked to explain the lack of documentation surrounding the
exchange transaction. He agreed that if the dollar notes were
accepted on a collection basis and there was doubt whether they were
genuine or not it could be expected that something would be put in
writing. However, he was unaware of that being done. It was put to
Shoopala that the whole transaction was a major blunder. Nothing had
been put in writing and head office had not even been informed of
the suspicions entertained by the branch. Shoopala had no answer.
Another
document put to Shoopala was an internal head office memorandum
setting out a brief history of what had happened. It was stated in
this memorandum that the counterfeit notes were deposited to the
credit of the plaintiff's account in the books of the Oshakati
branch. Shoopala agreed that that statement did not reflect the true
position and he was unable to give any explanation.
Parts
of Shoopala's evidence under cross-examination were distinctly vague
but this could well have been due to lapse of time. He was not sure,
for example, whether head office had been notified of the
receipt of the notes but when referred to his affidavit of
26th July was able to confirm that head office had indeed been
notified by telex. Shoopala did not impress me as a particularly
reliable witness and his competence at his job was also called in
question. It became apparent that he was not entirely conversant
with the form required to complete a foreign exchange transaction.
Before
leaving Shoopala's evidence mention must be made of his evidence in
re-examination that he did not see anything wrong with the notes and
that if they had seen anything wrong they would not have continued
with the transaction. This was very much in line with his affidavit
dated 26th July, 1990 but not in accordance with his earlier
evidence-in-chief that Wilkie was not sure about the authenticity of
the notes.
Another
of the bank's witnesses who testified as to the exchange transaction
was Oscar Halidulu. He was head of the foreign exchange and
investment department at the branch and after the plaintiff had
brought in the dollar notes he was called by Shoopala. His
evidence-in-chief as to what then took place corresponded for the
most part with the account given by Shoopala. He said that Wilkie
expressed doubts as to whether the notes were genuine and asked the
plaintiff whether they could be sent to Windhoek on a collection
basis and in the meantime their Namibian equivalent would be
credited to the plaintiff's account. However, the plaintiff insisted
on being given cash. Wilkie then agreed but told the plaintiff that
if the notes were not good there would have to be a refund. Halidulu
said that from what took place it was impossible to say whether any
refund would take the form of cash or a debit but he heard no
objection from the plaintiff. The plaintiff was then paid in cash
and the dollar notes were parcelled and sent to Windhoek. He himself
sent a telex to head office notifying it of the consignment.
Halidulu said that he was not involved in the subsequent debiting of
the plaintiff's account.
Halidulu
was cross-examined on the difference between his evidence and that
of Shoopala with regard to the reaction of the bank employees to the
appearance of the notes. Whereas Shoopala had said that there was
merely a degree of uncertainty whether the notes were genuine
Halidulu insisted that Wilkie had not only expressed doubts
concerning the authenticity of the notes but had said that there was
a great possibility that they were not genuine.
Halidulu
was also questioned on the apparent lack of concern at branch level
to notes which had a great possibility of being counterfeit. Why
were they not accepted on a collection basis when standing
instructions required that to be done in the case of all US dollar
notes? Halidulu's answer was that that was a matter for the branch
manager who had a general discretion. Also, why was head office not
informed that suspect notes were being consigned? Halidulu's answer
was again that that was a matter for Wilkie and he was surprised
that no such notification had been made. As with Shoopala this
witness was also not conversant with all the requirements of
exchange control regulations and the need for certain forms to be
used when exchanging foreign bank notes.
I
now come to the evidence of Johannes Shivolo who, in July, 1990 was
the marketing executive at the Oshakati branch. As I understand it
part of his duties was customer relations and it was he who was sent
by Wilkie to go and see the plaintiff after the branch had been
informed that the plaintiff's dollar notes were in fact counterfeit.
His instructions were, he said, to obtain a written instruction so
that the bank could transfer R4 00 000 from the plaintiff's call
account because his current account was overdrawn. He explained to
the plaintiff that he had been told to obtain his written
instructions so as to debit his call account and credit his cheque
account but the witness could not remember whether he had made any
mention of the fact that the dollars previously exchanged by the
plaintiff had been returned because they were counterfeit. Shivolo
said that he wrote out the following on a plain piece of paper while
in the plaintiff's office:
"Request
to transfer
1990/7/27
The
Manager FNB Oshakati
Please
transfer R4 00 000.00 from my call acc to my current"
and
the plaintiff then signed his name. Shivolo denied arriving with a
document already written as first alleged by the plaintiff in his
evidence and he denied asking the plaintiff to sign a blank document
as later alleged by the plaintiff. He just wrote the document at the
plaintiff's office, he said, gave it to the plaintiff and the
plaintiff signed it where he, Shivolo, had made a mark with a
cross.
Although
Shivolo could not recall whether the matter of the US dollars had
been raised he said, in terms, that neither he nor the plaintiff
spoke about the purchase of sugar.
To
round off the evidence adduced on behalf of the defendant I will
refer briefly to the testimony given by two of its managerial staff.
John Martin is at present the branch manager at Grootfontein but in
1990 was resources manager at Windhoek. His evidence touched on
various procedures laid down by the bank but I intend to mention
only a couple. He said that despite the "spreadings" from
head office the Oshakati branch could have carried out the foreign
exchange transaction without reporting to head office but he thought
it strange that there was no prior communication. Had he been faced
with the situation which confronted Wilkie he would have decided
what course to take having regard to the standing of the client.
When asked what he, as a branch manager, would have done if the
branch's biggest customer had presented US$119 000 for exchange and
insisted on cash he said he would have cashed them. He would have
done it on trust.
The
matter of how a similar transaction would have been dealt with by
Martin was taken further with him in crossexamination. He said
that if suspicion existed about the notes then the proper course
would be to phone in and ask for instructions. He agreed that not to
do so would be reckless. If the notes did not look genuine or if, as
was stated by Halidulu, there was a great possibility that they were
counterfeit, Martin was in no doubt that he would only have taken
the notes on a collection basis. After head office discovered that
the notes were counterfeit Wilkie was about to be reprimanded but
this was not pursued once it was learnt that the client's account
had been debited.
The
other official to whose evidence I will briefly refer is Josef
Grosse-Weischede who, in 1990, was head of the foreign exchange
department at head office. He confirmed that if a branch is not sure
of the authenticity of foreign notes the usual practice is for head
office to be contacted but that practice was not followed in the
present case. He also said that following an incident such as an
acceptance of counterfeit US$119 700 he would expect internal memos
between head office and the branch concerned but the Oshakati branch
file contained none. That he found surprising. On the question
whether a bank is entitled to debit a client's account only if he
agrees the witness was of the view that this was not the position.
It is sufficient if the client is advised and then, if he objects,
the matter would be referred higher.
In
final submissions Mr Bertelsman, for the defendant, launched a
strong attack on the credibility of the plaintiff's testimony as to
the source of the dollar notes.
Mr
Bertelsman pointed to the inconsistencies which emerged between what
was alleged in the pleadings, what was said in evidence-in-chief,
what was said while under cross-examination and
what was set out in the plaintiff's statements to the
police. Also, the contradictions made by the plaintiff in his
evidence when dealing with this aspect of the matter. If in
truth the plaintiff was an innocent businessman duped by
two criminals none of these inconsistencies and
contradictions would have appeared, submitted Mr Bertelsman.'
In response Mr Joubert, for the plaintiff, asked
rhetorically why a wealthy businessman should have become
knowingly involved in an illegal transaction and
there is, of course, some force in this point. But
it would be naive to think that wealthy businessmen
never involve themselves in illegal
transactions. Sometimes the temptation to increase their
wealth is simply too great. What I find
particularly puzzling is why the plaintiff should go to such trouble
to assist two unknown men. To do so he had to pay a visit to the
bank, wait while the transaction was completed and
whilst on his way to the bank and on his way back had to take
responsibility for a substantial sum of cash. Why do all this
when he could have told the two men to exchange the dollars at the
bank themselves. One does not need a bank account to exchange
foreign currency.
In
his evidence-in-chief the plaintiff said that he agreed to assist
the two men because he regarded them as potential customers but this
does not explain why he did not tell them that they could
complete the transaction themselves and return to his store.
Nor does it explain why in the further particulars it was alleged in
terms that the two men actually expressed an interest in purchasing
goods and paying with US dollars and that it was this that motivated
the plaintiff to go to the bank. And we know that, according to the
plaintiff, no purchases were made when he returned with the local
currency. Instead the plaintiff was given RIO 000. He was asked why
he should be the recipient of such generosity but all he could
reply, rather lamely I thought, was "a person can give you just
money." A person can but usually a person does not.
It
is true that once the plaintiff learnt that his call account was to
be debited he went to the police and handed to the police a sum of
RIO 000 and I bear that in mind. But nonetheless at the end of the
day I regard the plaintiff's account of how it came about that he
took US$119 700 to the bank as highly suspect. Although the evidence
of Shoopala and Halidulu is open to criticism on various matters
which I will refer to shortly they both said that the plaintiff
remained silent when asked where the dollar notes came from. I think
it perfectly normal that such a question should have been asked of a
regular customer seeking to exchange a large quantity of US dollar
notes and I am satisfied that the question was asked. The
plaintiff's silence is yet another reason to question the account
which he gave to the Court.
As
I have said, the evidence of Shoopala and Halidulu is also open to
criticism in various respects. Shoopala said that the dollar notes
looked genuine but Wilkie was not sure of their authenticity. This
has to be contrasted with what he said in his affidavit dated 26th
July, 1990, namely that Wilkie checked the notes but could find no
difference between them and other dollar notes in the bank's
possession. I also have regard to his evidence in reexamination
that he did not see anything wrong with the notes and had they seen
anything wrong they would not have proceeded with the transaction.
And both Shoopala's testimony and his affidavit have to be
contrasted with the evidence of Halidulu. He first said that Wilkie
expressed doubt as to whether the notes were genuine and then, under
cross-examination, said that Wilkie thought there was a great
possibility that they were not genuine. The plaintiff's evidence was
that Shoopala and Wilkie said that the notes were alright.
In
view of the "urgent spreadings" "advising caution
when accepting US$100 notes I should have thought Wilkie and
Shoopala would have subjected the notes to careful scrutiny before
accepting them and if there had been any doubt in their minds as to
their authenticity head office would have been contacted. But no
such step was taken. Nor was head office advised of the doubts
entertained at branch level when the notes were sent to head office.
In all the circumstances, I prefer the evidence of the plaintiff on
this issue. It is quite apparent from the evidence before me that
the staff at the Oshakati branch were slack in their approach to
their work. They were not even aware that basic forms had to be used
when exchanging foreign currency over a certain limit. The
probabilities are, in my judgment, that when one of their best
customers came in with a large number of dollar notes they threw
caution to the wind in order to please and simply accepted that the
notes were genuine. A strong hint of this is to be found in the
evidence of Shoopala himself when he agreed in reexamination
that the plaintiff was regarded with respect and that the fact that
the plaintiff was special influenced the bank's position. In my
judgment, no question arose of the plaintiff being informed that if
the notes were not genuine his account would be debited. It was only
when head office discovered that the notes were counterfeit that the
question of debiting the plaintiff's account arose. And then later,
when the instant action was launched, Shoopala and Halidulu saw fit
to avoid criticism by their superiors by concocting the account
which they gave to the Court.
I
now come to the debiting of the plaintiff's account. The defendant's
case is, in the first place, that it was agreed on or about 23 rd
July, 1990 that if the notes were not genuine the defendant would be
entitled to debit the plaintiff's current account and make a
corresponding transfer from his call account. I have already
rejected that defence on the facts. An alternative defence avers
that the defendant became entitled to utilise funds available in the
plaintiff's call account in order to recoup the amount paid to the
plaintiff in exchange for the counterfeit notes. The part of the
plea which raises this defence is a little confusing because it
refers also to the agreement made on 23rd July, 1990 but I think
this is probably due to caution on the part of the pleader. What
is being averred, as I
understand
it, is that the defendant was entitled, as a matter of law, to
repayment if the notes were counterfeit and the defendant was
entitled to exact repayment by making a debit on the current account
and then combining current and call account and setting off the
debit against the call account which was in credit. Other bases for
recouping the money paid out were advanced in argument. A further
defence avers that on 27th July, 1990 the plaintiff actually
authorised or ratified the transfer of R4 0 0 000 from his call
account to his current account in order to cover the amount of R309
005.55 which had been debited to it and to reduce the overdraft and
it is this plea with which I will now deal.
I
have already summarised the evidence relating to the written
instruction dated 27th July, 1990 and signed by the plaintiff and I
do not intend to repeat it in any detail. On the plaintiff's version
he was informed by Wilkie that the dollar notes were counterfeit on
26th July, 1990 and that he, Wilkie, intended to debit the
plaintiff's account with the amount received in exchange for them.
The plaintiff testified that he protested and told Wilkie that he
did not accept that. The written instruction to transfer R400 000
from call account to current account had nothing to do with the
threatened debit because it had been signed the previous day on 25th
July. However, the plaintiff's evidence concerning the written
instruction was completely unsatisfactory. At first the plaintiff
said that the document was complete save for his signature when it
was brought to him and then he said that it was blank save for a
cross indicating where he should sign. In my judgment, the first of
these two accounts was no mere slip by the plaintiff. He suddenly
realised the pitfall which lay ahead in the shape of the date on the
document and concocted the account of the document being blank in
order to avoid that pitfall. He suddenly saw the problems which
would arise if he admitted signing a document dated 27th July
authorising the transfer of R400 000 because the next question would
inevitably be why authorise such a transfer when you had already
been informed by the bank manager that he intended to make a debit
to cover the amount paid by the bank for the counterfeit dollars?
You must have realised that the transfer was being made for that
purpose and you authorised it.
I
have considered the evidence of both the plaintiff and Shivolo
with regard to the written instruction dated 27th July, 1990 and I
have no hesitation in preferring that of Shivolo. I find
that the document was written out and signed on 27th
July. I do not find anything sinister in the fact that the bank's
usual withdrawal and deposit slips were not used and I
reject the plaintiff's evidence that he thought the
bank was requesting him to authorise the transfer to
cover cheques issued for the purchase of sugar. He had been informed
on 26th July that a debit would be made on his account to cover the
payment made for the counterfeit dollars and whether he was
expressly told by Shivolo what the written authorisation was for -
Shivolo could not recall whether the matter of the US dollars had
been raised - I am satisfied that when the plaintiff
signed the written
authorisation
on 27th July he knew perfectly well that he was authorising the
debit that Wilkie said he would make. It is a clear inference from
this that the plaintiff did not protest the debit when it was raised
by Wilkie on the 26th. At that stage the plaintiff accepted his
liability to repay the bank and it was only later that he revised
his views. And I find nothing mysterious in the fact that the
authorisation was for the transfer of R400 000 and not R309 005.55.
With the debit of R309 005.55 the plaintiff's overdraft on his
current account went up to R542 855.89 and I can well understand
that Wilkie would have thought it sensible, both from the point of
view of the bank and that of the plaintiff, that a greater and
rounder sum be transferred.
I
therefore find that the document dated 27th July, 1990 was drawn and
signed with the express purpose of authorising or ratifying the
debit of R309 005.55 to cover the repayment to the bank of the money
received for the counterfeit dollars. And it follows from this
finding that the plaintiff's contractual claim must fail.
As
the matter was canvassed I will also deal with the defendant's plea
that regardless whether authorisation had been obtained from the
plaintiff it was entitled to exact payment by debiting the
plaintiff's current account and then utilise funds available in the
call account in order to extinguish the plaintiff's liability.
The
starting point of Mr Bertelsman's submissions on this part of the
defendant's case was this. He submitted that the true nature
of a transaction in terms of which a customer
exchanges foreign currency at his bank for local currency is one of
an agreement of sale. He relied on S
v Katsikaris,
1980(3) 580 (A) at 590 C. Mr Joubert, however, submitted that
the true nature of such a transaction is one of barter and he, in
turn, relied upon certain observations in The
Legal Aspect of Money
by Mann (5th Ed.) at p. 196 and a certain passage in
Goode's Payment
Obligations in Commercial and Financial Transactions
at p. 5. I have read the passages referred to and I do not
consider they support the proposition advanced by Mr
Joubert. In the first publication referred to the
following appears at p. 196:
"If
a Londoner exchanges a pound sterling note against 10 French francs
at Cook's in London, or if he requests his banker to convert a sum
of pounds sterling into 1 000 USA dollars or to pay dollars to his
American creditor, nobody will hesitate to draw the inference that
this customer buys francs and dollars as a commodity and that the
delivery of the foreign money is the subject matter of a sale."
And
the following appears in the second mentioned publication at p. 5:
"If
I order 100 United States dollars from my bank in readiness for a
visit to the United States, my account being debited with the
sterling equivalent at the date the dollars are made available to
me, it is clear that I receive the dollars as a commodity, not as
money, for I am buying them, not borrowing them. Again, if as a
London currency dealer I purchase francs in exchange for marks, the
transaction is one of barter, the exchange of one commodity for
another."
The
distinction which must be made, as I see it, is between a
transaction where one commodity is exchanged for another and a
transaction where money is paid for a commodity or received for a
commodity. The former is barter whereas the latter is a sale and the
transaction between the plaintiff and the defendant clearly fell
into the latter category.
To
continue with Mr Bertelsman's submissions, he submitted that the
plaintiff was only entitled to payment in terms of the agreement of
sale if the dollar notes purchased by the defendant were genuine.
They were not. They were worthless counterfeit notes and the
defendant was entitled to repayment of the amount paid to the
plaintiff unless he could put up a case that the dollar notes were
sold voetstoots
or that the defendant agreed to accept the risk of the transaction.
This is not the plaintiff's case on the contractual claim.
Mr
Bertelsman then pointed to the fact that the relationship of the
plaintiff and defendant was one of banker and customer and, as such,
debtor and creditor. This was accepted in the landmark case of Foley
v Hill
(1843 - 60) All E R Rep. 16 and has also been accepted by courts
applying the Roman-Dutch system of law. See: Standard
Bank of SA Ltd v Oneanate Investments (Pty) Ltd.
1995(4) SA 510 (C) at pp. 530 - 531 and the various cases cited
therein.
Mr
Bertelsman then relied on the specialities of banking law and
submitted that the defendant had a right to set-off one account
against the other. He referred in particular to Halesowen
v Westminster Bank Ltd.
1970(3) All E R 473 where
Lord
Denning M.R. said at p. 477
F:
"
suppose a customer has one account in
credit
and another in debit. Has the banker a right to combine the two
accounts so that he can set-off the debit against the credit, and be
liable only for the balance? The answer to this question is: Yes,
the banker has a right to combine the two accounts whenever he
pleases, and to set-off one against the other, unless he has made
some agreement, express or implied, to keep them separate."
Winn,
L.J. agreed. Buckley, L.J., though dissenting on
another point, also agreed on the point under consideration. Lord
Denning M.R. went on to point out that where a bank opens two
accounts for a customer, one of which is a loan
account
and the other is a current
account, there is usually an implied agreement that the bank will
not combine the two accounts or set-off one against the
other without the consent of the customer. Otherwise no
customer could have any security in drawing a cheque on his
current account. But that was not the position in the
instant case. The plaintiff had a current account and a call
account and there has been no suggestion made in the evidence that
there was some agreement, either express or implied,
that the defendant, as a matter of banking law, would
not have a right to combine the two accounts and to set-off one
against the other. Mr Joubert did not refer the
Court to any authority on this special rule relating to bank
accounts and I am unable to see any good reason not to apply it.
The
foregoing submission was made to meet the eventuality of a finding
that the debit to the current account was unauthorised. I
have
found that that was not the case. Mr
Joubert
argued that lack of authority to make the debit alters
the position with regard to combining accounts but in the
circumstances of this case I do not think it does. A banker has
an unquestionable right to retain a credit balance on
a customer's account against a debt due from that customer. See
Paget's Law
of Banking
(9th ed.) at p. 411. He is entitled to set-off one debt against
another. The debit to the current account followed by a transfer
from the call account were mere book entries made to achieve that
result. I therefore hold that as a matter of law
the defendant was entitled to combine the plaintiff's
two accounts and to set-off one against the other or to set-off the
plaintiff's indebtedness against the credit balance in his call
account. This is a further ground for dismissing the plaintiff's
contractual claim.
Turning
now to the alternative claim in delict it is clear that the
plaintiff bears the onus of proof. It is alleged that the plaintiff
asked the defendant's employees to advise him whether the dollar
notes were genuine and they negligently advised him that they were.
Alternatively, the employees negligently failed to inform the
plaintiff that they were unable to determine whether the notes were
genuine or not. So far as the first allegation is concerned I am not
satisfied on the evidence that the plaintiff did indeed ask for
advice whether the notes were genuine. I have already said that I
regard the plaintiff's account of how it came about that he took the
counterfeit dollar notes to the bank as highly suspect and I think
it unlikely that he would have raised any question of their
authenticity or lack of
Ismael v First National Bank of Namibia Ltd (I 1141/93) [1996] NAHC 29 (14 November 1996);