Barclays Bank International Ltd v African Diamond Exporters (Pty) Ltd
Jurisdiction | South Africa |
Judge | McEwan J |
Judgment Date | 19 October 1976 |
Citation | 1977 (1) SA 298 (W) |
Hearing Date | 16 October 1976 |
Court | Witwatersrand Local Division |
McEwan, J.:
The plaintiff claimed payment of the sum of R136 502,61 in a condictio indebiti. The plaintiff is a company incorporated in England which carries on business as a banker. Its head office is in London. The defendant company is a A diamond merchant and diamond exporter. Its principal place of business was at the relevant time at 401/4 Diamond Exchange Building in Johannesburg. The principal shareholder and managing director of the defendant is Mr. Joseph Bronner ("Bronner"). It appears that the defendant is virtually a "one-man" company. Whenever therefore in the course of this B judgment reference is made to steps taken or letters written by Bronner it must be assumed, unless the context indicates otherwise, that he was acting on behalf of the defendant.
Transactions on behalf of the plaintiff in this country were normally handled by the Simmonds Street, Johannesburg, branch of Barclays National Bank Ltd. For brevity the term "Barnat", C which was often used in the evidence and argument, will be used to describe that branch. The defendant's banker is Nedbank Ltd. The defendant dealt with the Diamond Exchange Branch of that bank, which is in the building where the defendant's office was at the relevant times. References in this judgment to "Nedbank" will be references to that branch, unless otherwise indicated.
Before I summarise the facts that give rise to the plantiff's D claim, I must refer to reg. 3(1) of the Exchange Control Regulations, 1961, which were made in terms of sec. 9 of the Currency and Exchange Act, 9 of 1933, and published in Government Notice R1111 of 1961 ("the regulations").
The plaintiff's summons included an alternative prayer for a declaration that the plaintiff was entitled to payment of the E sum claimed with interest and taxed costs when the plaintiff had obtained the permission of the Treasury in terms of the regulations for the defendant to make such payment to the plaintiff. Long after the issue of the plaintiff's summons in this case MOLL, J., gave judgment in the case of Rhodesian Pulp and Paper Industries Ltd. v Plastelect (Pty.) Ltd., 1975 (1) SA 955 (W) F . The effect of that judgment is set out in the headnote, namely that before a plaintiff outside the Republic of South Africa institutes action for payment of money against a defendant who is within the Republic, he must obtain permission from the Treasury or a person authorized by the Treasury in terms of the Exchange Control Regulations and the fact that such permission has been obtained ought to be stated G in the plaintiff's particulars of claim.
When the judgment came to the notice of the plaintiff, the plaintiff on 3 February 1975 applied through its bankers to the Treasury for the necessary permission. The defendant, being aware of the plaintiff's intention to apply for such permission H and purporting to act in the interests of the national economy, caused a memorandum to be sent on 7 February 1975 to the Treasury by Nedbank setting out reasons why permission should be refused. Bronner disclaimed responsibility for this memorandum, saying that it was initiated by his attorney.
The necessary permission was granted on 5 February 1975. The original authority, as conveyed verbally by telephone reads:
"In the event of any award being made in favour of Barclays Bank International Ltd., we are prepared to authorize the transfer of the amount involved. However, we require a fresh application to be submitted after the award has in fact been made".
McEwan J
The plaintiff thereupon gave notice to amend its particulars of claim by alleging that permission had been granted. The amendment was opposed. In a judgment delivered on 4 March 1975 MELAMET, A. J. (as he then was), gave leave to amend the summons (see 1976 (1) SA 93 (W)). He held that an order A granting the amendment would have the effect of constituting virtually a new summons from the date of amendment and technically the consent of the exchange control authorities would have been obtained before the new summons became effective (see pp. 97H to 98A). He made an appropriate order as to the costs of the amendment, which were to be borne by the plaintiff (see p. 99A).
The claim was then amended. The defendant took an exception, B the effect of which was that the summons was bad in law because it was necessary to allege that the requisite permission of the Treasury had been obtained before the institution of action and that had not been alleged in the C summons. The exception was dismissed by VERMOOTEN, A.J., on 1 May 1975 (see 1976 (1) SA 100 (W)).
In both instances leave to appeal was refused. Undaunted the defendant has still relied upon a special plea in bar, the effect of which is that if the Treasury had granted the permission referred to by the plaintiff (which was not admitted) such permission was not valid in law, because the plaintiff was obliged in terms of the regulations to obtain D Treasury permission before the institution of action.
At the trial the plaintiff led the evidence of Mr. J. H. Postmus, an official of the South African Reserve Bank who was concerned with the administration of the regulations. He stated that prior to the judgment in the Rhodesian Pulp case, supra, it was the practice to give the necessary permission in cases E of this kind after an award had been made by the Court concerned. His first inclination after the application was made was to turn it down, but after he had discussed it with his colleagues it was decided to grant it. It was thus proved that in fact the requisite permission had been granted.
In addition, in the course of cross-examination, Mr. Postmus F produced a copy of Government Notice R.1555 of 15 August 1975, which reads:
"In terms of reg. 3 of the Exchange Control Regulations published under Government Notice R.1111 of 1 December 1961, as amended, the Treasury hereby exempts any person from the obligation to obtain, as a pre-requisite to the institution of any court action in connection with a transaction mentioned in sub-reg. (1) (c), permission to make such a payment to or in favour of or on behalf of a person resident outside the G Republic, or place any sum to the credit of such person".
It was suggested in argument that the previous decisions in the present case were interlocutory and that consequently it is still open to the Court to uphold the defendant's special plea in bar to the plaintiff's amended particulars of claim (see Blaauwbosch Diamonds Ltd. v Union Government (Minister of H Finance), 1915 AD 599 at p. 601).
The necessary background of evidence has now been provided, so that the sole point is one of law. In my view it would be undesirable to express a different view of the law at this stage of the case, from that which has already been applied. In any event, however, I find that the reasoning of MELAMET, A.J., (to which I have made brief reference) is by no means so clearly wrong that I should depart from it. In my view, the dismissal of the exception was an almost automatic consequence of that reasoning.
McEwan J
It has been suggested further that the effect of Government Notice R.1555 of 1975 is to make the point academic. The argument is that the Notice refers to a procedural matter and therefore is effective immediately even in relation to pending A or proceeding cases. That point was considered and not upheld by VAN WINSEN, J., in the case of McConnell v SA Stevedores Service Co. (Holdings) (Pty.) Ltd. and SA Railways and Harbours, which is now reported in 1976 (2) SA 126 (C). A typewritten copy of the judgment was made available during the hearing. It was not argued fully before me whether or not the B learned Judge's reasons for not upholding the point were correct. Such reasoning appears to me, however, to follow naturally from the reasoning in the previous cases, including the Rhodesian Pulp case. However, as I said, the point may require reconsideration as the decision appears to nullify what to my mind was the clear intention of the framer of the Notice. It may be that the framer of the Notice did not appreciate the C point made by MOLL, J., that a litigant claiming payment of money must allege and prove that he is a person competent to receive such payment (see the Rhodesian Pulp case at p. 95F) and that the Notice may be ineffective to assist a plaintiff who pleads and attempts to rely upon the exemption when he institutes his action. I prefer to leave the point open, D particularly in the light of the fact that the Full Bench of Natal Provincial Division has recently thrown doubt on the correctness of the decisions in the Rhodesian Pulp case and McConnell's case (see Banco Standard Toita de Mocambique v Corbett Enterprises (Pty.) Ltd., 1976 (2) SA 196 (N)).
On the first ground mentioned by me, however, in my view the E special plea should fail and it is accordingly dismissed.
I shall now set out the main facts of the story from which the plaintiff's claim and the defences to it arise.
H In June 1972 Bronner received an enquiry on the letterhead of Antwerp Distributing Co. ("Antwerp") with an address in Azusa, California. The letter was signed by John Schwartz and George Kuetgens ("Kuetgens"). The writers stated that they were expanding their business in diamonds and were looking for sources of supply of cut and uncut diamonds. Correspondence followed. Bronner checked upon references furnished to him, including certain mutual acquaintances. Among the references received was a letter dated 8 August 1972 from the assistant manager of Wells Fargo Bank, Azusa, to the manager of Nedbank (exh. 142). As further references to this letter will be made, it may be desirable to set out the text in full. It reads:
"In response to your request of 31 July we have maintained a commercial checking account for the above referenced party" (i.e. Antwerp of Azusa) "since October 1971. The account...
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Commissioner for Inland Revenue v First National Industrial Bank Ltd
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