CO-OP LTD -vs- AUSSENKEHR FARMS (PTY) LTD
Judgment - Claim based on cheque -Applicability of Section 23 and
28(1) of the Bills of Exchange Act, Act 34 of 1964.
NO. I 1246/95 IN THE HIGH COURT OF NAMIBIA
the matter, between
FARMS (PTY) LTD
Combined Summons the Plaintiff
payment of an amount of N$19 140.00, interest and costs from the
Defendant. The causa
was a cheque drawn by the Defendant in favour of the Plaintiff on the
Karasburg branch of Bank Windhoek Ltd. However when the cheque was
presented it was dishonoured by non-payment and sent back to
Plaintiff marked "Refer to Drawer" .
entered appearance to defend to which the Plaintiff promptly replied
with an application for Summary Judgment which was also defended.
an affidavit, deposed to by one Sheila George, the Administration
Manager and the deputy to the Managing Director of the Defendant, it
seems that the cheque, on which Plaintiff's claim was based,
was signed by one
at the time Defendant's Chief Estates Manager.
said Coet-zee had authority to sign cheques on behalf of the
Defendant and drawn on its Karasburg bank account. The deponent
further stated that, from time to time, rations were bought at the
Plaintiff's Keetmanshoop branch, which purchases were paid for by
cheque, presumably signed by Coetzee on behalf of the Defendant. It
is further stated that no prior credit agreement or arrangement was
made with the Plaintiff. Items bought were collected and at the same
time paid for by cheque. This happened against handing over of an
invoice by one of Plaintiff's representatives.
George further stated that after the cheque was dishonoured no
documentation could be found verifying the purchases. By that time
the said Coetzee was already dismissed from the Defendant's services
because he was involved in the making of various unauthorised
expenditures in regard to funds of the Defendant as well as other
irregularities. Various attempts were made to obtain invoices from
the Plaintiff concerning the transaction of N$19 140.00 but to no
avail. As a result thereof the Respondent now finds itself in a
position where it seems that because of this lack of documentation,
that no consideration or value was received by Defendant in regard to
the amount claimed.
defences raised by the Defendant on the above facts are twofold,
on the facts stated by it, it would be possible by it to raise the
defence that no value was given for the cheque; • and
although the said Coetzee had authority to sign cheques on behalf of
the defendant, that authority was a limited one and that the said
Coetzee acted outside the scope of his authority in that the cheque
is unrelated to any purchases made or expenses incurred on behalf of
regard to the first defence it was pointed out by Mr Grobler on
behalf of the Plaintiff that section 28(1) of the Bills of Exchange
Act, Act no. 34 of 1964 creates a rebuttable presumption that value
was given for the cheque. The section provides as follows:
Every party whose signature appears on a bill is prima facie deemed
to have become a party thereto for value."
section must then be read with section 28(2), 27 and the definition
of "holder" . There can therefore be no doubt that the
Plaintiff will, in the main action, be assisted by this presumption
and that the onus will be on the defendant to rebut the presumption
on a balance of probabilities. Although in Summary Judgment
proceedings, other than is the case in provisional sentence
proceedings, the fact that one party is saddled with an onus may not
play any role to determine whether a bona
defence was proved this may, in the circumstances in which this
defence was raised by the
well play a role.
does not state that no value was given in this instance. Relying on
certain factors the Defendant asked the Court to infer that no value
was given for Ms George stated "that it therefore appears that
no purchase was made by the Respondent from applicant in such amount
or that any other consideration or value was received by the
Respondent from applicant in respect of such amount."
factors on which the Defendant relied for this inference are:
no documentary proof for such a transaction could be found;
Plaintiff, although requested did not or could not provide any such
Coetzee should have known that the funds available in the Karasburg
banking account would not cover a cheque of over N$19 000.00;
it was unlikely that purchases for rations, especially during
January, would be as high as
Coetzee was later dismissed because of
by him and the spending of
money for which he was not authorised.
(a) and (b) can be dealt with together. The fact that no documentary
proof could be found by Defendant is in my opinion not really
significant. For one thing it does not mean that there was not
documentary proof in some or other form which may have been mislaid.
It was further pointed out by Mr Grobler that one normally does not
find an invoice accompanying a cash sale. At most one can expect a
cash slip. That may have been the reason why Plaintiff could not
produce any documentary proof when asked. However there was no
fiduciary relationship between Plaintiff and Defendant and Plaintiff
was under no legal duty to provide such documentation to the
Totemeyer argued that there was an agreement between the parties
that payment would only be effected on the handing over of an
invoice once purchases were made. This argument is based on what was
said by Ms George in her affidavit namely that the driver of the
Defendant was usually sent to collect the purchases and to hand over
a cheque therefore against receipt of an invoice. To elevate what
took place between the driver of the Defendant and a representative
of the Plaintiff to an agreement seems to me to be stretching the
point. If there was such an agreement then the Defendant failed to
give any detail thereof. By whom, where and when this agreement was
concluded was not stated. The driver who could have thrown more
light on this agreement and who could possibly say whether the
amount of N$19 140.00 was in respect of purchases or not and if so,
whether an invoice was handed over, was not required to make an
far as point (c) is concerned the fact whether Coetzee knew or did
not know whether the said cheque would be covered by funds in
Defendant's banking account is of no consequence to the Plaintiff
and Defendant could not take this point any further than to state
that Coetzee should have known this. However this aspect does not
bring the Defendant any closer to the question of whether value was
given for the cheque or not.
regard to point (d) only the barest of information was given. Why
purchases for rations during January would be markedly lower than
during other months was not explained. The Court is furthermore also
not informed of what the normal monthly purchases in regard to
rations were. I am sure if it were significantly lower than N$19
140.00 the Defendant would have said so if only thereby to
illustrate that the amount is so far out that it was not likely to
have been utilized for that purpose. The bare allegations made by
the Defendant did therefore not assist its case.
(e) raises the possibility of fraud perpetrated by
However there is no allegation that the Plaintiff
was a party to
this fraud or even knew about it. It is
clear that Coetzee, when
he signed the cheque, acted as the
authorised agent of
the Defendant. If
a fraud, which, on the documents, is by no means clear, the
Defendant, in the absence of allegations that the Plaintiff was a
party thereto or had notice thereof, will in my opinion not be able
to recuperate its loss from the Plaintiff. See in this
v Blue Line
1918 TPD 309 and De Villiers and Macintosh, The
Law of Agency in South Africa,
3rd ed. , prepared by J M Silke. See further Rand
Advance (Pty) Ltd v Scala Cafe,
1974(1) SA (D & CLD) on p. 791 G - H.
in mind the speculative nature of the allegations made by the
Defendant and the lack of detail I am not satisfied that the
Defendant showed that it has a bona
on this first leg.
second possible defence, namely that Coetzee exceeded his authority,
was not directly raised on the documents. It can however be inferred
from the allegations of a possible fraud perpetrated by Coetzee.
Again there is a lack of particularity to substantiate this possible
defence. If this defence was properly taken one would have expected
the Defendant to have stated what the authority of Coetzee was. In
the absence of such allegations the Court must accept that Coetzee's
authority was not limited to sign cheques only in regard to the
purchase of rations or to any amount for that purpose. This
conclusion seems to be correct because Ms George declared the
Defendant still willing to pay if Plaintiff could prove that the
cheque was given for the purchase of goods or that Defendant
received other consideration to the value of the cheque. Furthermore
the cheque was signed by Coetzee without any indication that his
signature was put on the cheque in terms of a specific authority.
(See De Villiers and Macintosh: gp_ cit,
3rd ed. by J M Silke, p. 497). The Defendant is therefore also not
assisted by the provisions of section 23 of Act 34 of 1964 whereby
it is enacted that a signature by procuration operates as notice
that the agent has but a limited authority to -sign. (De Villiers
and Macintosh, gp_ cit,
p. 496 .
the allegations made by the Defendant I am not satisfied that it has
shown to have a bona
defence on this issue. Again the defence, if it was taken, is
speculative in nature and lacks particularity.
was lastly submitted by Mr Totemeyer that the Court, in the exercise
of its discretion, will allow the Defendant to defend the action as
it was shown that the Plaintiff has not got an unanswerable claim
against the Defendant.
is no doubt that the Court, even where it came to the conclusion
that a Defendant had not proven a bona
to a Plaintiff's claim, can exercise its discretion in favour of
such a Defendant and allow it to defend the action. However before a
Court will exercise its discretion in favour of a Defendant there
must be some factual basis, or belief, set out which will enable a
Court to say that there was some reasonable possibility that
something will emerge at the trial, that the Defendant would still
be able at the trial to establish its defences. (See Nedoerm
Bank Ltd v Verbri Projects CC.
1993(3) SA 214 at 224 C - F; see also Breitenbach
v Fiat (S A) (Edms) Bpk,
1976(2) SA 226 at 229 F).
problem which the Defendant faces is that it thinks that it has been
deceived by its Estate Manager, Coetzee. However Defendant is not
even sure of this. It is in this regard that "the question of
the onus is in my opinion relevant and in terms of the provisions of
Act no. 34 of 1964 the onus will be on Defendant to rebut the
presumption of value given as provided in the Act. Bearing in mind
the speculative nature of Defendant's allegations in this regard it
seems to me highly unlikely that anything can emerge at a trial
which will establish this defence.
regard to Defendant's second defence it seems to me that this
defence can only succeed if it is proven that the said Coetzee
perpetrated a fraud and that the Plaintiff was a party thereto or
had notice thereof. However there are no allegations to substantiate
this defence. In fact it would seem that Coetzee's authority to sign
cheques was unlimited. There is furthermore also no indication on
the cheque itself that would have alerted the Plaintiff to the fact
that Coetzee was signing as agent with a specific, and consequently
a limited, authority.
the circumstances I am satisfied that it will serve no useful
purpose to allow the Defendant nevertheless to defend the action.
the result the following order is made:
shall be Summary Judgment for the Plaintiff in the amount of N$19
140.00 together with interest at 20% per annum as well as costs.
BEHALF OF THE PLAINTIFF: ADV
Olivier & Co
BEHALF OF THE DEFENDANT: Instructed by: