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IN THE HIGH COURT OF SOUTH AFRICA

SOUTH GAUTENG HIGH COURT

JOHANNESBURG

CASE No. 45091/09

REPORTABLE

In the matter between:

HARBINDER SINGH sethi Plaintiff

DELETE WHICHEVER IS NOT APPLICABLE

(1) REPORTABLE: YES / NO

(2) OF INTEREST TO OTHER JUDGES: YES / NO

(3) REVISED.

…………………….. ………………………...

DATE SIGNATURE

and

ABALEGANI SUPPLIES (PTY) LTD First Defendant

ZUNAID ABBAS MOTI Second Defendant

____________________________________________________________

JUDGMENT

____________________________________________________________

WILLIS J:

[1] The plaintiff claims provisional sentence. He relies upon a cheque

made payable to himself “or bearer” in an amount of R5 million drawn

by the second defendant on behalf of the first defendant. The cheque

is dated 3 October, 2009. The cheque was duly presented for

payment. It was returned to the plaintiff, unpaid by the bank upon

which it had been drawn, with the advice “payment stopped”1. In other

words, there had been a countermand of payment2.

[2] It is open to a defendant in provisional sentence proceedings to

contest the underlying causa for the claim.3 As Goldstone J (as he

1 This is the standard advice where there has been a “countermand of payment”. I

refer, immodestly, to my own book, Willis, N. 1981 Banking in South African Law,

Cape Town: Juta’s.

2 Section 73 (b) of the Bills of Exchange Act No. 34 of 1964, as amended, provides

that a bank’s duty to pay a cheque drawn on it by its customer is terminated by

receipt of a “countermand of payment”.

3 See Froman v Robertson 1971 (1) SA 115 (A) at 120F-121E and Barclays National

Bank v Serfontein 1981 (3) SA 244 (W) at 249HE-F. See, also: Radus & Mindel v

Plaza Outfitters 1945 TPD 350; Schweizer Reneke Garage v Meyer 1963 (1) SA (1)

SA 391 (T); Slabbert, Verster & Malherbe (Bloemfontein) Bpk 1963 (1) SA 835(O) at

840 and Malan F.R. and others, 2009, Bills of Exchange, Cheques and Promissory

2

then was) pointed out, if a defendant successfully places the

underlying causa for a claim based on a cheque in dispute, the claim

then becomes illiquid, even though the cheque itself remains, of

course, liquid.4 Once the claim becomes illiquid, provisional sentence

must be refused.5 The defendants, in their affidavit disputing their

liability, have indeed placed the underlying causa in dispute. It is

therefore necessary to consider the facts in contention.

[3] On 5th August, 2008 Rakhee Investments CC (“Rakhee”) sold to

Villa Via Developments Limited (previously known as Zambrotti

Investments 38 (Pty) Limited) a “property” described as “32 sectional

title units in the sectional scheme SS Villa Via, Scheme 43/1995”.

This property or “properties” are situated in Sandown. The transaction

was recorded in a written agreement. In the agreement the purchase

price has been recorded as being R65 million. The agreement further

records, inter alia, that “the seller hereby irrevocably transfers, cedes

and assigns all and/or any benefit licence, title and interest in the

hotel and/or bed and breakfast licence and or authority vested in it

and/or the property, to the purchaser” (my emphasis) and, as a so-

called warranty, that “the property has the zoning rights suitable to

operate a hotel and/or bed and breakfast business” (my emphasis).

The dispute turns, essentially, on the meaning to be attributed to the

word “hotel”.

[4] Rakhee was, at all material times, duly represented by the plaintiff.

He has described himself as “the beneficial owner of each of the

sellers” and has been described by the defendants as “the controlling

mind” of the seller. Although, on the defendants’ version, the date has

not been made clear, it seems that on 5th August 2008 four cheques

totalling R16 million were signed by the second defendant, the natural

Notes, Durban: LexisNexis, p75.

4 Barclays National Bank Ltd v Serfontein 1981 (3) SA 244 (W) at 249G.

5 Barclays National Bank Ltd v Serfontein 1981 (3) SA 244 (W) at 249H-250F.

3

person duly authorised to act on behalf of the first defendant as the

drawer and physically handed over to the plaintiff as the named

payee. In regard to the cheques, the first respondent, an associated

company of the purchaser, at all material times acted for and on

behalf of the purchaser. All the cheques were left payable to the

named payee “or bearer”. Three of these cheques were for R5 million

each and another for R1 million. The cheque which has given rise to

the claim for provisional sentence was one of the three cheques for R5

million each. The cheques in question were post-dated. According to

the plaintiff, the cheques were drawn in this manner and handed over

to him at his request. “As I was the beneficial owner of each of the

sellers, it made sense to have the cheques made out to me personally”.

The defendants dispute that the name of the plaintiff had been filled

in on the cheques at the time when they were handed over and

contends that they were left blank. Nothing turns on this as, prima

facie, the bearer of an inchoate cheque has the authority and the right

to fill in details left blank.6

[5] On 22nd August 2008, the seller and the purchaser agreed upon a

so-called “Addendum 1 to the Sale of Immovable Property and Hotel

Business Agreement”. In the addendum, the purchase price is

recorded as being R64 500 000 (i.e. R500 000 less than previously)

and it is recorded that the seller had received a payment of R15

million “by way of cheque”, “as a partial reduction of the purchase

price”.

[6] On 14th October, 2008 the seller and the purchaser entered into a

so-called “Addendum 2 to the Sale of Immovable Property and Hotel

Business”. “Addendum 2” is recorded in a written instrument. In the

second addendum “the property” is described as the 32 sectional

6 See section 18 of the Bills of Exchange Act, No. 34 of 1964, as amended and

Ramsukh v Diesel-Electric (Natal) (Pty) Ltd 1997 (4) SA 242 (SCA) at 249G-250A and

the authorities therein cited.

4

units aforesaid but the following words are added “and includes the

hotel business operated in regard thereto and/or thereon”. The

purchase price remains recorded as being R64 500 000 (i.e. the

amount reflected in “Addendum 1”). The deposit is recorded as being

R5 545 626,56 which includes the cheque for R1 million referred to

previously. This addendum also records that the purchase price of

R64 500 000 includes:

An amount of R15 000 000 (fifteen million rands), by way of

cheque, which cheques the seller hereby acknowledges

receipt of payment, as a partial reduction of the purchase

price, which cheques the Seller (being Rakhee Investments)

hereby acknowledge as being in respect of the hotel

business, furniture and accessories required to operate the

hotel business as at date of occupation

Furthermore, the addendum records a warranty and a “material

representation” that the seller “is in possession of all applicable and

valid licences and/or authorities enabling it to conduct and/or

operate its hotel and/or bed and breakfast business from the

property”. The transfer of the properties took place on 20th March,

2009, the “purchase consideration” in respect thereof being recorded

as R49 500 000.

[7] On 27th August 2009 the Executive Director: Development Planning

and Urban Management of the City of Johannesburg wrote to Hugo

Olivier & Associates, the attorneys then acting for the purchaser in

respect of the zoning of the hotel to advise that Portion 2 of Erf 43

Sandown could not be used for an hotel by reason of its zoning. On

28th August 2009, Knowles Husain Lindsay, the attorneys acting for

the purchaser in its dealings with the seller, wrote a letter to the

seller to advise that the hotel had been sold as a going concern for

R15 million, that the three post-dated cheques (of which one has given

5

rise to this claim for provisional sentence) had been given for the

acquisition of the hotel, that in view of the difficulties in regard to

zoning, the purchaser had elected to cancel the agreement in respect

of the hotel and tendered the return of it (“the hotel”) against the

return of the post-dated cheques. In that letter, Knowles Husain

Lindsay advise that their client, the purchaser, would instruct its

bankers to stop payment on the cheques (which would have included,

obviously, the one which has given rise to the claim for provisional

sentence).

[8] In summary, therefore, the defendants version of events is that the

seller purchased an hotel as a going concern for R15 million, that the

cheque in question was handed over in part payment of this

“purchase consideration”, that the seller had not and could not deliver

to the purchaser the hotel as a going concern and that, accordingly,

the purchaser had validly cancelled the agreement and stopped

payment of the cheque.

[9] Ex facie the affidavits filed on behalf of the defendants, they have

successfully challenged the underlying causa for payment by way of

the cheque. The dispute which has arisen certainly cannot, merely

upon reading the defendants set of affidavits, be found to be so far-

fetched or untenable that the court can reject the defendants’ version.

Moreover, it is clear that the plaintiff, before he issued provisional

sentence summons, was aware of the defendants’ version of events.

[10] It is trite that the general rule set out in Johannes Van Der

Linden’s Verhandeling over de Judicieele Practijcq of Vorm van

Procedeeren,7 first published in 1794, still holds good: extrinsic

evidence, beyond the document itself, is not permissible to establish a

claim for provisional sentence.8 The plaintiff could not therefore, in the

provisional sentence summons, file a founding affidavit. He did,

7 Vol 1, Book 2, Chapter 6, section 13.

6

however, file a replying affidavit, as he was entitled to do, in terms of

Rule 8 (5). In this affidavit, the plaintiff alleges that, by the time the

second addendum had been signed, the purchaser had already been

conducting the so-called Villa Via business. According to the plaintiff,

this “Villa Via business” had always been understood, between the

parties, as the “hotel business”. The plaintiff goes on to say that,

nevertheless, the properties upon which this “hotel business” operates

have not ever been an hotel in the sense recognised by the City of

Johannesburg. The “hotel” has always consisted of luxury suites

typically having two bedrooms, two bathrooms (one of which is en

suite) and an open plan kitchen/lounge/dining-room. These suites are

fully furnished. The suites are and, at all material times, have been let

out as such. No provision of food or drink has ever been made by the

business to these units. These facts have, at all material times, been

well known to the defendants. This business, according to the

plaintiff, has been operating for several years without objection by the

City of Johannesburg. The suites in respect of which this business is

conducted are “sandwiched between major Sandton hotels including

the fairly recently developed Radisson Hotel, the Hilton Hotel, The

Courtyard, Hotel, the Don Apartments, the Balla Laika Hotel and the

Holiday Inn Hotel”. The defendants always knew that these properties

were not and would not be licensed by the City as “an hotel”.

Addendum 2 was recorded as it was so that certain of the units would

be sold as a going concern (which they were), and would accordingly

be “zero-rated for purposes of registration of transfer”. The deal in the

second addendum was structured so that a portion of the purchase

price was for the purchase of an “hotel” as a going concern which

would, furthermore, have saved the defendants a considerable amount

of VAT (Value Added Tax). The second addendum had been agreed to

by the plaintiff to assist the purchaser in saving money. Moreover, the

sale of the hotel business could not, as a matter of fact and law, be

8 See, for example, Union Share Agency and Investment Ltd v Spain 1928 AD 74 at

79 and Rich and Others v Lagerwey 1974 (4) SA 748 (A) at 755H.

7

severable from the sale of the units upon which the “Villa Via

business was conducted”: once the units were transferred to the

purchaser, the purchaser, ipso facto, acquired “the hotel business.”

There is nothing further that the seller could deliver other than what

has been transferred on 20th March, 2009 and the purchaser, at all

material times, has been fully aware of this. According to the plaintiff,

there has been no misrepresentation or breach of contract by the

seller whatsoever: the purchaser has, at all material times, known

exactly what this “Villa Via business” entailed. There is, furthermore,

no need for the purchaser to obtain any licence for the “Villa Via

business” to continue as it always has, a fact of which the defendants

were at all times fully aware. Finally, the plaintiff submits that, as

matter of law, in terms of the Businesses Act, No 71 of 1991, an

application for rezoning can only be made by the owner of that

business. Now that transfer has taken place, it is beyond the power of

the seller to secure a rezoning: this can only be done by the

purchaser. The version of the plaintiff, in his replying affidavit,

certainly places the defendants’ version in a very different perspective.

The defendants at one stage applied to file a further, supplementary

affidavit in answer to the plaintiff’s replying affidavit but, before I

could even consider the matter, they withdrew this application.

[11] In Barclays National Bank Ltd v Serfontein9 Goldstone J referred

with approval to the judgment of Erasmus J in De Bruin v Munro (1)10

to hold that a plaintiff in provisional sentence proceedings is obliged

to establish his cause of action in the summons, and may not do so in

his replying affidavit.

[12] Perhaps aware of his difficulties, Mr Watt-Pringle, who together

with Ms Lundström appeared for the plaintiff, relied very heavily on the

following:

9 Supra at 249B.

10 1971 (4) SA 624 (O) at 628B-E.

8

(i) the dictum in Froman v Robertson11 by Corbett JA (as he then

was) that the onus rests on the defendant to establish any of his

special defences (such as a lack of causa) on a balance of

probabilities; and

(ii) the plaintiff was, he submitted, a holder in due course, and

accordingly entitled to the special protection afforded by the

Bills of Exchange Act, No. 34 of 1964, as amended (“the Bills of

Exchange Act”) provides.

I shall deal with the question of onus more fully later on but I accept

that it informs or “colours” Mr Watt-Pringle’s submissions in

connection with the plaintiff being the holder in due course.

[13] There can be no question that the payee of a bearer cheque (such

as the one in question) may qualify as a holder in due course.12 The

question in this case is: does this particular plaintiff enjoy the special

protections provided for in the Bills of Exchange Act? It is important

to remember that the law of bills of exchange (which includes

cheques13) derives from the law merchant and that our Bills of

Exchange Act is, in effect, a codification of the law merchant in regard

to these instruments. The same position obtains in many other

countries around the world. It is easy to forget that the law merchant

preceded not only the electronic transfer of funds which nowadays

dominates our commercial exchange but also the motor vehicle and

the steam engine. The law merchant is closely linked to aspects of

chivalry, with its love of ritual (residually apparent, for example, in

“presenting” a cheque for payment), codes of honour (a cheque should

be “as good as gold”, for example) and so on. It would have often taken

many hours, if not days and weeks to ride, clip-clop on horseback to

present cheques and other similar instruments for payment. The

11 1971 (1) SA 115 (A) at 120B.

12 See Ramsukh v Diesel Electric (Natal) (Pty) Ltd 1997 (4) SA 242 (SCA) at 249A.

13 The Bills of Exchange Act defines a cheque as a bill of exchange drawn on a bank

payable on demand.

9

difficulties in presenting cheques for payment had the result that,

generally, cheques would change hands many, many more times than

they do so now. Despite its somewhat arid appearance, the Bills of

Exchange Act represents a drama, vivid in colour and character. It

might not have the literary quality of Geoffrey Chaucer’s Canterbury

Tales but, behind that formidable exterior, lurk tales that are no less

arresting of our attention. One may delight in the seemingly dry sense

of humour of Holmes JA when he said in regard to certain features of

the law relating to cheques that “one is dealing with an evolved

mystique of hieroglyphs”.14 Nevertheless, implicit in his observations

may be detected a sense that, as objects of law, cheques can be

regarded with a sentiment that approaches affection once one has

some understanding of their history. The “hieroglyphs” were part of

“the code” – the code of honour. The point of this discursus is to

explain that the special protection for the holder in due course arose

precisely because a cheque or bill of exchange could have changed

hands many times over such that the ultimate holder was quite

oblivious of its history. If a cheque was to be “as good as gold”, honour

required, in such circumstances, that it should be paid.

[14] Section 27(1) of the Bills of Exchange Act provides that:

A holder in due course is a holder who has taken a bill,

complete and regular on the face of it, under the following

circumstances, namely –

(a) he must have become the holder of it before it

was overdue, and if it had previously been

dishonoured, without notice thereof; and

(b) he must have taken the bill in good faith and for

value, and at the time the bill was negotiated to

him, he must have had no notice of any defect in

the title of the person who negotiated it.

14 In Standard Bank of SA Ltd v Sham Magazine Centre 1977 (1) SA 484 (A) at 501H.

10

Mr Watt-Pringle submitted that the probabilities were overwhelming,

especially as the defendants carefully avoided mentioning the date on

which the plaintiff took the cheque, that this occurred on 5th August,

2008, the date upon which the first written agreement between the

purchaser and the seller was signed. Mr Watt-Pringle submitted that,

whatever might appear in the second addendum to this agreement, it

has been quite clear that on the date when the plaintiff took the

cheque, the plaintiff, at that time (i.e. on 5th August, 2008), was in

good faith and took it for value. Accordingly, so the argument went,

the plaintiff was entitled to payment on the cheque.

[15] Section 36 (b) of the Bills of Exchange Act provides that a holder

in due course

…holds the bill free from any defect in the title of prior

parties as well as from mere personal defences available to

prior parties among themselves, and may enforce payment

against all parties liable on the bill

The reference to “prior parties” in this section links up with what I

have said about the ratio for the special protection for a holder in due

course: a bill may have changed hands several times over such that

the ultimate holder is unaware of the underlying causa. In this case,

on the plaintiff’s own version of events, there was no payee prior to

him. Indeed he was the first person and only person to have taken it

as holder. Accordingly, he cannot, in terms of section 36 (b), hold the

cheque free from the defence available to the defendants of there being

no underlying causa once the cheque was presented for payment. I am

fortified in this view by reference to the well-known case of Moti and

Co v Cassim’s Trustee.15Although the court had to deal with a different

issue from the one before me, Innes CJ said16:

15 1924 AD 720.

16 At 732.

11

Moreover, as was pointed out in Herdman v Wheeler (1902 1

KB 361), the issue of a note by delivery to the payee is a very

different thing from its transfer thereafter from hand to

hand. In the one case the parties are simply bound by their

own contract; in the other the transferee may acquire w a

better title than the transferor possessed; and that is the

result of negotiation, not issue.

In Karabus Motors (1959) Ltd v Van Eck,17 Watermeyer J (as he then

was), after referring to Moti v Cassim’s Trustee and the fact that

“plaintiff and defendant are immediate parties” said: “That being so

defendant may set up against the defendant any defence which would

have been available to him had the action been brought on an

ordinary written contract”.18 In Viljoen v SIK Investment Corporation

(Pty) Ltd19the court adopted a similar opposition and specificall

referred to Karabus v Van Eck with approval.20 Both Karabus v Van

Eck and Viljoen v SIK Investment Corporation were approved in the

Supreme Court of Appeal as having been consistently applied in the

South African courts and as having “the weighty support of the House

of Lords” in the Ramsukh v Diesel-Electric case.21

[16] From the above, more particularly Goldstone J’s judgment in

Barcalys v Serfontein, the law appears to be clear that a plaintiff in

provisional sentence proceedings cannot rely on his replying affidavit

to establish a cause of action. In any event, even if one were to have

regard thereto, one must not lose sight of the observation, made by

Grosskopf J (as he then was) in C.G.E. Construction Co v

Administration, Cape and Another22 that the granting of provisional

17 1962 (1) SA 451 (C).

18 At 453B-C.

19 1969 (3) SA 582 (T).

20 At 585A-G.

21 1997 (4) SA 242 (SCA) at 248C-D.

22 1976 (4) SA 925 (C) at 927A.

12

sentence required “the production of strong prima facie proof of debt”.

On the other hand, there seems to be little point in having a replying

affidavit in such proceedings if it is simply to be disregarded, more

especially as the plaintiff, save in certain exceptional circumstances

not relevant to this case, may not rely on evidence extrinsic to the

document itself in order to succeed: no founding affidavit would have

been permissible.

[17] In summary, the court has the following conundrum before it:

(i) the plaintiff is the named payee of a bearer cheque;

(ii) in their affidavit, disputing liability on the cheque, the

defendants have established, on the probabilities, that the

plaintiff is not entitled to the special protection of a holder

in due course and have established a defence on the

merits of the plaintiff’s claim for payment;

(iii) the replying affidavit of the plaintiff casts considerable

doubts on the probabilities of the defendants’ success

and, considering the claim for provisional sentence as a

whole, may be said to shift the probabilities in the

plaintiff’s favour considerably;

(iv) the plaintiff may not, however, rely on a replying affidavit

to establish his cause of action;

(v) it is in the nature of provisional sentence that a plaintiff

does not rely on a founding affidavit but upon a liquid

document upon which the liability of the defendant

appears to be self-evident;

(vi) ordinarily, the only way in which a defendant can escape

provisional sentence is by way of affidavit;

(vii) it is not clear whether the onus of the defendant referred

in Froman v Robertson is one to be discharged solely in

the affidavit to be filed in terms of Rule 8 (5) of the High

Court Rules or whether it is to be discharged in some

13

“overall” way, by regard being had to all the affidavits (in

Froman v Robertson Corbett JA certainly referred to the

replying affidavit,23 although the defendant’s case appears

to have foundered, in the end, on its own deficiencies);

(viii) if the defendants are required to discharge the onus

regard being had to their affidavit only in this particular

case, they will have succeeded but this, as will be

apparent, may visit injustice upon the plaintiff;

(ix) if the onus is to be discharged by the defendants in an

overall way (by looking at the complete set of all the

affidavits before the court) the probabilities are almost so

evenly balanced that it is hard indeed to make a decision

as to where they lie;

(x) It is difficult indeed to decide “the probabilities” where, as

here, neither version in the respective sets of affidavits is

inherently improbable – these versions need to be subject

to cross-examination, whereupon the criteria set out in

Stellenbosch Farmers’ Winery Group Ltd and Another v

Martell et Cie and Others,24 can come into operation;

(xi) Obviously, if the probabilities were exactly even then the

defendants would have failed to discharge the onus and

provisional sentence should be granted25;

(xii) In any event, a finding that the defendants have failed to

discharge the onus (after looking at the complete set of all

the affidavits before the court) would, at best, be made

with such a marginal degree of certainty as to where the

probabilities lie that, to grant provisional sentence, may

visit injustice upon the defendants and, moreover, would

23 At 123B

24 2003 (1) SA 11 (SCA) at para [5]

25 See, for example, Strachan & Company v Murray 1939 WLD 93 at 100; Allied

Holdings Ltd v Myerson 1948(2) SA 961 (W) at 966; Fisher v Levin 1971 (1) SA 250

(W) at 253D.

14

have the result of allowing the plaintiff to establish his

claim by way of his replying affidavit.

[18] In Rich and Others v Lagerwey,26 Wessels JA, delivering the

unanimous decision of the then Appellate Division referred the

judgment of De Wet JP in Extension Investments (Pty) Ltd v Ampro

Holdings (Pty) Ltd27 and observed as follows in respect of the learned

Judge President’s judgment: “After surveying the relevant authorities

and considering the practice of the Courts, he concluded that a Court

has no such inherent power (to hear viva voce evidence in provisional

sentence cases). I am in respectful agreement with this conclusion”.28

Wessels JA went on to say that, other than where the verity of the

defendant’s signature (or that of his agent) was in dispute, “I would

observe that, having regard to the nature and purpose of provisional

sentence proceedings, a Court would exercise such a power only in

very exceptional circumstances”.29

[19] Since the cases of Stellenbosch Farmers’ Winery Ltd v Stellenvale

Winery (Pty) Ltd30 and Plascon-Evans Paints Ltd v Van Riebeeck

Paints,31 decision-making by the courts when a final order is sought in

motion proceedings and there are disputes of fact on affidavits has

generally been hugely facilitated. Where provisional orders are sought,

the position is not quite as straightforward. That the question of

deciding probabilities where a dispute falls to be decided by affidavit is

not always an easy one as was recognized by the then Appellate

Division when it decided the well known case of Kalil v Decotex (Pty)

Ltd and Another.32 In Kalil v Decotex Corbett JA (as he then was)

26 1974 (4) SA 748 (A)

27 1961 (3) SA 429 (W)

28 At 756D

29 At 756F-G

30 1957 (4) SA 234 (C).

31 1984 (3) SA 623 (A).

32 1988 (1) SA 943 (A).

15

referred to some of the difficulties that may arise for a court in

deciding whether either provisional or final orders for the winding-up

of a company should be made. Corbett JA, delivering the unanimous

judgment of the court in that case, pointed out that a refusal of a

provisional order of winding-up represents a final decision against the

applicant and, if such a decision is always to be made purely on the

affidavits, injustice may be done to an applicant.33 The Learned Judge

said that where there is a dispute on the affidavits in a situation such

that the probabilities cannot be decided by reference to all the

affidavits,34 the court should retain a discretion to refer the matter to

oral evidence.35 Later, I shall give my reasons why I do not consider

that the refusal of provisional sentence necessarily entails the making

of a final order. The “Kalil v Decotex solution” of referring the dispute

to oral evidence is problematic, however, because, as I have

mentioned before, the position is clear that it is only in exceptional

circumstances that a dispute relating to the grant of provisional

sentence should be referred to oral evidence. In any event, Rule 8 (7)

may envisage that oral evidence is to be heard only as to the

authenticity of the defendant’s signature (or that of his agent) and the

agent’s authority.

[20] In deciding how to deal with this matter, I am mindful of the fact

that the effect of granting provisional sentence is quite drastic: the

defendant must pay the amount claimed together with taxed costs,

although he may require the plaintiff to provide security de

restituendo (see Rule 8 (10), read with Rule 8(9)). I accept, however, as

Mr Watt-Pringle has submitted, that provisional sentence is not as

drastic a remedy as summary judgment and that, of course, different

criteria must apply in deciding whether or not to refuse or grant

provisional sentence from those that apply in summary judgment

33 At 979F-H.

34 See 978E.

35 See 979F-G.

16

applications. Indeed, Mr Watt-Pringle, on more than one occasion,

submitted that I could not treat the defendants’ set of affidavits in the

same way as would be the case if the defendants were resisting an

application for summary judgment. This submission gave me cause

for reflection. Mr Watt-Pringle is correct that there must be a

difference in approach to the two procedures. First, the consequences

of granting the orders sought are respectively different in provisional

sentence and summary judgment proceedings. Secondly, the question

arises as to why different proceedings would exist, if they were to be

determined in the same way?

[21] Referring to various other cases Grosskopf J, in Koornklip

Beleggings Bpk v Allied Minerals Ltd36 said that “Affidavits in summary

judgment matters are customarily treated with a certain degree of

indulgence”. In broad terms, Grosskopf J’s judgment appears to have

been endorsed by the Supreme Court of Appeal in Soil Fumigation

Services Lowveld CC v Chemfit Technical Products (Pty) Ltd.37 I think it

is true to say that here in the South Gauteng High Court, in

Johannesburg, the case of Breitenbach v Fiat38 is generally taken as a

cautionary note that a court should be careful not to be too indulgent

in summary judgment proceedings. Breitenbach v Fiat has been

described in the Soil Fumigation Services Lowveld CC v Chemfit

Technical Products (Pty) Ltd case as “the classic exposition”.39 In

Breitenbach v Fiat Colman J, delivering the judgment of the Full

Court, said that:

What I have set out in that regard (referring to the

suggestion of the creator of Pooh-Baah (a member of the

English Bar, as well as a satirist) that ‘corroborative detail’

36 1970 (1) SA 674 (C) at 678E.

37 2004 (6) SA 9 (SCA) at para [9]. The SCA also referred, with approval, the

judgment of Corbett J (as he then was) in Stassen v Stoffberg 1973 (3) SA 725 (C)

which, in turn, also broadly endorsed the Koornklip Beleggings case.

38 1976 (2) SA 226 (T).

39 At paragraph [24].

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could ‘give artistic verisimilitude to an otherwise bald and

unconvincing narrative’) is not a demand for, or an

encouragement to present, lengthy and prolix affidavits in

summary judgment cases. All that is required is that the

defendant’s defence be not set out so baldly, vaguely or

laconically that the Court, with due regard to all the

circumstances, receives the impression that the defendant

has, or may have, dishonestly sought to avoid the dangers

inherent in the presentation of a fuller or clearer version of

the defence which he claims to have.

In Maharaj v Barclays National Bank Ltd 40 Corbett JA, delivering the

unanimous judgment of the court, said in regard to the requirement

that a defendant in summary judgment proceedings should disclose

fully the nature and grounds of his defence and the material facts

upon which it is founded that

… while the defendant need not deal exhaustively with the

facts and the evidence relied upon to substantiate them, he

must at least disclose his defence and the material facts upon

which it is based with sufficient particularity and completeness

to enable the Court to decide whether the affidavit discloses a

bona fide defence… At the same time the defendant is not

expected to formulate his opposition to the claim with the

precision that would be required of a plea; nor does the Court

examine it by the standards of pleading.

If one bears in mind the decisions referred to in this paragraph, it

seems that the difference between the approach of a court to a

defendant’s affidavit in provisional sentence proceedings and

summary judgment proceedings is that a greater degree of precision

and exhaustiveness is to be expected in the former than the latter.

40 1976 (1) SA 418 (A) at 426C-E.

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[22] In the present matter, the defendants have indeed set out their

defence with a high degree of precision and exhaustiveness. Although

the defendants’ version invites a few questions, it has been put before

the court with clarity, amplified by not inconsiderable supporting

documentation. What is in dispute is the veracity of this version. As

their version reads, the defendants’ set of affidavits resisting

provisional sentence establishes the probabilities in their favour. As I

have already said, their version cannot be found to be so far-fetched

or untenable that the court can reject it as it stands. On the other

hand, as I have also already said, the plaintiff’s replying affidavit casts

doubt on these probabilities to a considerable extent. The plaintiff’s

version may perhaps raise questions as to whether or not the plaintiff

was a party to a tax fraud. On the other hand, parties may lawfully

structure their commercial arrangements in a way that one or both of

them, by tax avoidance, minimises tax. If the plaintiff’s version is true

and the transaction was lawful, then the plaintiff should succeed in

obtaining judgment in his favour.

[23] As I have mentioned earlier, the defendants at one stage applied

to file further supplementary affidavit in answer to the plaintiff’s

replying affidavit but then thought better of it. In this case, it does not

matter how many sets of affidavits are filed. The matter, ultimately,

will have to be decided largely on findings as to credibility. Thus one

goes round in circles. The only practical solution, it seems to me, is to

refer the matter to trial.

[24] To add to the difficulties in adjudicating the matter, it seems that

some confusion may have arisen as to whether or not a judgment

refusing provisional sentence precludes the plaintiff from proceeding

by way of an illiquid summons.41 Provisional sentence (or

namptissiment or handvulling), although of French origin, is part of

41 See Barclays National Bank Ltd v Wollach 1986 (1) SA 355 (C) at 359G-G.

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our inheritance from Roman-Dutch common law.42 Although Rule 8

(6) refers to a court giving “final judgment” in provisional sentence

proceedings, it seems, however, to have been clear enough that a

judgment granting provisional sentence has, as its very name implies,

been regarded in the old authorities as being provisional only.43

Particularly in view of the fact that the former Appellate Division has

decided that proceedings for provisional sentence are interlocutory in

nature,44 I prefer the view of the learned author Malan45 that

provisional sentence is a form of interim relief. Consequently, it seems

to follow that, ordinarily, a plaintiff in respect of whom provisional

sentence has been refused should not necessarily face a bar to

proceeding by way of ordinary trial action. On the other hand, there

may be situations where it would be appropriate in provisional

sentence proceedings to dismiss the plaintiff’s claim entirely: for

example, where a defendant presents an apparently watertight

defence to which the plaintiff does not reply.

[25] In my view, it would not only be practical but also obvious that, in

order to do justice in this particular case, the matter should proceed

to trial. By adopting this approach, one can make sense of allowing

replying affidavits in provisional sentence proceedings. Moreover, an

expeditious referral to trial, in appropriate circumstances, will also

reconcile the tension that may seem to exist in our law at present as

to the process which a court should follow where a good defence has

42 See the judgment of Grosskopf J(as he then was) in C.G.E Rhoode Construction Co

v Provincial Administration, Cape and Another 1976 (4) SA 925 (C) at 927A-928D

and the judgment of Goldstone J in Barclays National Bank v Serfontein 1981 (3) SA

244 (W) at 249H. See, also: Dendy, M. Step-by-Step Provisional Sentence Proceedings.

2003 (June) De Rebus 29.

43 Ibid.

44 Oliff v Minnie 1952 (4) SA 369 (A) at 374 G.

45 Malan, F.R. and others. 1986. Provisional Sentence on Bills of Exchange, Cheques

and Promissory Notes, Durban: LexisNexis, p196. See also De Vos, W. 1986 The

Course of Proceedings Upon the Refusal of Provisional Sentence, TSAR 233-5.

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been put forward but has been matched by a reply that, in turn, casts

a different light on the matter. Thus:

(a) the plaintiff cannot rely on a replying affidavit to

establish his cause of action; but

(b) the replying affidavit can avoid the action being

dismissed in its entirety.

[26] Precedent for referring provisional sentence proceedings to trial is

to be found in Cohen v Louis Blumberg (Pty) Ltd and Another46 and also

Fichardt’s Estate v Mitchell and Others,47 Roberts v Willet,48 Ottico

Meccania Italiana v Photogrammetic Engineering (Pty) Ltd,49 Cronje v

Cronje,50 and Lesotho Diamond Works (1973) (Pty) Ltd v Lurie.51

[27] Nevertheless, in all these cases, other than the Cohen v Louis

Blumberg matter, the approach of the court has been either to

postpone or suspend the provisional sentence proceedings, pending

the outcome of the trial. I prefer the approach of Ramsbottom J in the

Cohen v Louis Blumberg case. Should the plaintiff’s claim be good,

“converting” the provisional sentence proceedings into a trial action

will minimise the prejudice which the plaintiff will suffer in being

deprived of the speedy relief of provisional sentence. That was the

objective of Friedman J (as he then was) in the Ottico Meccania case.52

Besides, unless the decision to “convert” provisional sentence

proceedings into a trial action (in contradistinction to postponing or

suspending the provisional sentence proceedings) is a purely

discretionary matter, I am bound to follow Ramsbottom J’s decision

46 1949 (2) SA 849 (W) at 853.

47 1921 OPD 152.

48 1928 CPD 529.

49 1965 (2) SA 276 (D).

50 1968 (1) SA 134 (O).

51 1975 (2) SA 142 (O).

52 See at 290D.

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unless I am convinced that it was wrong, the reason being that

Ramsbottom J’s decision was delivered in this division and the other

decisions elsewhere.53 The format of Ramsbottom J’s order in the

Cohen v Louis Blumberg case also has the advantage of singular

clarity. The parties could not complain that they were confused as to

the steps that should be followed. Accordingly, I shall broadly and

respectfully follow the format of Ramsbottom J’s order in Cohen v

Louis Blumberg.

[21] In the result, the following order is made:

(a) Provisional sentence is refused;

(b) The provisional sentence summons is to stand as the

summons in the principal case;

(c) The defendants’ set of affidavits resisting provisional

sentence is to serve as an appearance to defend;

53 In Ex parte Hansmann 1938 WLD 89 at 93, Schreiner J (as he then was) said: “I

am bound to follow a Transvaal decision in preference to the decisions of other

provinces, at all events unless I am completely satisfied of the incorrectness of the

Transvaal decision”. The Appellate Division disagreed with this decision but on a

different issue (the extraterritorial jurisdiction of courts functioning within South

Africa) in the case of Estate Agent’s Board v Lek 1979 (3) SA 1048(A) at 1068-1069C.

The stare decisis point in Ex parte Hansmann was expressly followed in Klaassen v

Benjamin 1941 TPD 80 at 93, Feun v Pretoria City Council 1949 (1) SA 331 (T) at

354, Mockford and Others v Gordon and Abe Gordon (Pty) Ltd 1949 (3) SA 1173 (W)

at 1174, Simpson v Simpson 1951 (3) SA 828 (W) at 830A, Sebastian and Others v

Malelane Irrigation Board 1953 (2) SA 55 (T) at 59G, R v Philips Dairy (Pty) Ltd 1955

(4) SA 120 (T) at 122D, S. A. Clay Industries ltd v Katzenellenbogen 1957 (1) SA 220

(W) at 224H and R v Mnguni 1958 (4) SA 320 (T) at 322F. The reason for Ex parte

Hansmann having disappeared from view in recent years seems to have to do with a

somewhat misleading reference in the noter-up as “not approved” in the of Estate

Agent’s Board v Lek case. It is instructive to read, in general terms, the affirmation

of the principle of stare decisis in Collett v Priest 1931 AD 290 at 301, Bloemfontein

Town Council v Richter 1938 AD 195 at 232, R v Nxumalo 1939 AD 580 at 586 and

Commissioner for Inland Revenue v Estate Crew and Another 1943 AD 656 at 680,

culminating in the landmark case of Harris & Others v Minister of the Interior &

Another 1952 (2) SA 428 (A) at 452.

22

(d) The plaintiff is to file a declaration within 15 days of

this order;

(e) After the filing of the declaration, the ordinary Rules of

the High Court as to the filing of further pleadings are

to apply;

(f) The question of the costs of these proceedings is

reserved for determination at the trial.

DATED AT JOHANNESBURG THIS 18th DAY OF

FEBRUARY, 2010

N.P. WILLIS

JUDGE OF THE HIGH COURT

Counsel for the Plaintiff: Adv. C.E. Watt-Pringle SC (with him, D.N.

Lundström)

Counsel for the Defendants: Adv. A.E.Bham SC (with him, G.Ameer)

Attorneys for the Plaintiff: Bouwer, Kobeli & Morabe

Attorneys for the Defendants: Knowles Husain Lindsay Inc

Date of hearing: 4th February, 2010

Date of judgment: 18th February, 2010

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