Anglo African Factors (Pty) Ltd v P & I Engineering

JurisdictionSouth Africa
JudgeNestadt J
Judgment Date30 September 1983
Citation1984 (2) SA 501 (W)
CourtWitwatersrand Local Division

Nestadt J:

This is an action for provisional sentence in the sum of R18 500. It is based on a cheque for this amount drawn by the defendant in favour of Interlease Ltd or bearer. The cheque is dated 6 November 1982. The plaintiff is the holder. It was presented for payment but payment was stopped.

In its answering affidavit opposing provisional sentence a D number of defences are relied on. During argument however, Mr Sapire, on its behalf, confined defendant's opposition to only one of them, which, in a nutshell, is that the defendant is not liable to the payee and that the plaintiff, having taken the instrument subject to equities, stands in no better position.

The defence against the payee rests on the following E allegations contained in defendant's answering affidavit:

"4.

Defendant has such defences arising as follows:

(a)

On or about 25 June 1982 I, acting on behalf of defendant, entered into an agreement with one Panayotis Kachrilas, a director of Interlease Ltd ('Interlease') who represented Interlease in his capacity as such in terms of which it was agreed that F the defendant would deliver to Interlease three cheques dated 16 September 1982, 6 November 1982 and 25 November 1982, for amounts of R18 500, R18 500 and R7 500 respectively and that Interlease would in consideration therefor deliver to the defendant cheques for the same amounts drawn on the same dates.

(b)

The cheques drawn by defendant aforesaid were delivered to Interlease whilst Interlease delivered to defendant the G corresponding cheques, copies whereof are annexed hereto marked 'B, 'C' and 'D'.

(c)

It was agreed between the said Kachrilas, representing Interlease, and the defendant, on whose behalf I acted, that the defendant would be obliged to meet the cheques given to Interlease only in the event of the cheques drawn by Interlease in favour of defendant being met on presentation.

(i)

H I submit that the plaintiff is not entitled to payment of the cheque on which this action is based as in terms of the agreement between defendant and Interlease the defendant was not obliged to meet the said cheque unless Interlease honoured the corresponding cheque which had been drawn by it in favour of defendant."

(I pause to mention that it is the cheque referred to in para 4 (a) and dated 6 November 1982 which is the one on which the plaintiff sues.) It is further averred that the payee was placed in liquidation and that none of the cheques that it drew in favour of the defendant were met.

Nestadt J

The contention that this defence is available against the plaintiff is based on the fact that the cheque is crossed and marked "not negotiable". In these circumstances, so it is said, s 80 of the Bills of Exchange Act 34 of 1964 is operative. It provides:

"If a person takes a crossed cheque which bears on it the words A 'not negotiable', he shall not have, and shall not be capable of giving, a better title to the cheque than that which the person from whom he took it had."

Plaintiff's counter to this is a denial that s 80 applies. On its behalf Mr Fine submitted that the papers showed that the cheque had been given by the defendant for the purposes of enabling the payee to raise money, ie in order to accommodate B it, that plaintiff had discounted the cheque and that in the circumstances s 26 applied, with the result that the plaintiff was not affected by the alleged defence against the payee.

The factual basis for this submission is contained in the following passages in the plaintiff's replying affidavit:

"10.

Ad para 4 (a), (b) and (c):

(a)

The facts contained herein are not within my knowledge and I am unable to dispute such facts.

(b)

By failing to disclose to this honourable Court the precise nature or purpose of the transaction between defendant and Interlease, the defendant has failed to take this honourable Court into its confidence.

(c)

However, I state that the facts deposed to by Souris show clearly that the said transaction was an accommodation transaction D as envisaged by s 26 (1) of Act 34 of 1964. I further aver that this is so despite the fact that defendant avoids any reference to the word 'accommodation' when describing the transaction.

(d)

At the time that the cheque was endorsed over to the plaintiff by Interlease, plaintiff gave value therefor in that plaintiff discounted the cheque in the normal course of its business and pursuant E to its normal and usual discounting terms as contained in the agreement concluded between plaintiff and Interlease on 22...

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2 practice notes
  • Sundelson v Knuttel
    • South Africa
    • Invalid date
    ...to him. (At 521E-F.) The appeal was thus dismissed. Annotations: Reported cases Anglo African Factors (Pty) Ltd v P & I Engineering 1984 (2) SA 501 (W): not followed D Barlow Motor Investments Ltd v Sman 1993 (1) SA 347 (W): compared Bloems Timber Kilns (Pty) Ltd v Volkskas Bpk 1976 (4) SA ......
  • Outsurance Insurance Company Ltd v Blakes-Maphanga Incorporated
    • South Africa
    • Transvaal Provincial Division
    • 27 February 2006
    ...the fees were collection monies held in trust by the attorney. In Deeb v Pinter, Shane & Stoler v Munro-Scott t/a House of Bemadi 1984 (2) SA 501 (W) it was held that where an attorney sued for his fees the cause of action was a contractual mandate and not the bill of costs (see dictum at 5......
2 cases
  • Sundelson v Knuttel
    • South Africa
    • Invalid date
    ...to him. (At 521E-F.) The appeal was thus dismissed. Annotations: Reported cases Anglo African Factors (Pty) Ltd v P & I Engineering 1984 (2) SA 501 (W): not followed D Barlow Motor Investments Ltd v Sman 1993 (1) SA 347 (W): compared Bloems Timber Kilns (Pty) Ltd v Volkskas Bpk 1976 (4) SA ......
  • Outsurance Insurance Company Ltd v Blakes-Maphanga Incorporated
    • South Africa
    • Transvaal Provincial Division
    • 27 February 2006
    ...the fees were collection monies held in trust by the attorney. In Deeb v Pinter, Shane & Stoler v Munro-Scott t/a House of Bemadi 1984 (2) SA 501 (W) it was held that where an attorney sued for his fees the cause of action was a contractual mandate and not the bill of costs (see dictum at 5......

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