Barclays National Bank Ltd v Thompson

• Jurisdiction: South Africa
• Judge: Corbett JA, Kotzé JA, Cillié JA, Hoexter JA and Hefer JA
• Judgment Date: 29 May 1985
• Citation: 1985 (3) SA 778 (A)
• Hearing Date: 01 May 1985
• Court: Appellate Division

Hoexter JA:

In the Witwatersrand Local Division the appellant H was the defendant in an action for damages instituted against it by the respondent. In what follows, I shall refer to the respondent as the plaintiff and to the appellant as the defendant. Before the matter came to trial the plaintiff sought an amendment of his particulars of claim. The application for I an amendment, which was resisted by the defendant, was heard by ACKERMANN J. The learned Judge granted an amendment. With leave of the Court a quo the defendant appeals against the order allowing the amendment.

Section 9 of the Currency and Exchange Act 9 of 1933 ("the Act") empowers the State President to make regulations in regard to any matter directly or indirectly affecting banking, J currency or exchanges; and in such regulations to apply any sanctions, civil or criminal, which he thinks

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fit to impose. In terms of s 9 of the Act there were A promulgated, under Government Notice 1111 dated 1 December 1961, the Exchange Control Regulations ("the regulations") set forth in the Schedule to the Notice. Regulation 3 (1) (c) of the regulations reads:

"Subject to any exemption which may be granted by the Treasury or a person authorised by the Treasury, no person shall, B without permission granted by the Treasury or a person authorised by the Treasury and in accordance with such conditions as the Treasury or such authorised person may impose -

(a)

............

(b)

............

(c)

make any payment to, or in favour, or on behalf of a person resident outside the Republic, or place any sum to the credit of such person."

Regulation 22 penalises any contravention of the regulations by C applying thereto a criminal sanction. It provides that every person who contravenes the regulations shall be guilty of an offence and liable upon conviction to a fine not exceeding R10 000, or to imprisonment for a period not exceeding five years, or both such fine and imprisonment.

The chief issue raised by the present appeal is the following. Take the case of a plaintiff resident outside the Republic who D has a claim sounding in money against a defendant who is an incola of the Republic. The plaintiff seeks legal redress by instituting action against the defendant in a South African Court in whose area of jurisdiction the defendant is domiciled. In such circumstances does the absence of Treasury permission, within the meaning of reg 3 (1) (c), for payment by the E defendant to the plaintiff of the amount of the latter's claim, or any portion thereof, entail any disability on the part of the plaintiff either (1) in suing the defendant or (2) in obtaining the Court's judgment in the plaintiff's favour? Within the past decade these two questions have arisen in a number of actions for money claims heard in the Provincial F Divisions of the Supreme Court. The resultant decisions have not all been harmonious. In particular the current of judicial opinion on the subject in the Transvaal has differed somewhat from the views expressed thereon in some of the decisions of the Cape and Natal Provincial Divisions. Before examining the G relevant decisions it is convenient at this stage briefly to indicate the facts of the instant case.

The defendant is a registered commercial bank which carries on business in the Republic and which has its registered head office in Johannesburg. The plaintiff is a person resident outside the Republic. The plaintiff instituted his action for damages in April 1974. In February 1976 the defendant filed a H plea in bar, based on reg 3 (1) (c), to the plaintiff's claim. The defendant pleaded that in respect of the plaintiff's claim no permission had been granted by the Treasury for payment thereof by the defendant to the plaintiff. Accordingly, so it was averred, the plaintiff's action was barred. On 3 December 1982 the plaintiff gave notice of his intention to amend his I particulars of claim by the introduction of a fresh paragraph alleging that on or about 6 January 1976 the Treasury had granted permission to the plaintiff in terms of reg 3 (1) (c) for payment of the claim to the plaintiff. In response to the above the defendant gave notice of its intention to raise the following point of law in its opposition to the amendment sought. The proposed amendment was not competent in law, so J said the defendant, as its effect would be to

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A include a cause of action which had not existed at the time of the issue of the summons. In what fashion ACKERMANN J resolved the opposed application may more usefully be considered after looking at the conflicting decisions to which reference has already been made. To an examination of these I now turn.

B The first case to be noticed is that of Rhodesian Pulp and Paper Industries Ltd v Plastelect (Pty) Ltd 1975 (1) SA 955 (W), to which I shall refer as "the Rhodesian Pulp case". In that case a Rhodesian company carrying on business in that country instituted an action in the Witwatersrand Local C Division against a defendant carrying on business in the Republic for damages for an alleged breach of contract. To the plaintiff's claim the defendant filed a special plea. Averring that the plaintiff was a person resident outside the Republic, and that Treasury permission for the payment by the defendant of the sum claimed had not been obtained, the defendant invoked D reg 3 (1) (c). It pleaded that in the circumstances "it would not be lawful" for the Court to grant the relief sought. The plaintiff excepted to the special plea, asserting that reg 3 (1) (c) did not in law represent a bar to the relief claimed. The question arose whether permission by the Treasury prior to the institution of the action was an essential ingredient of the plaintiff's cause of action. The Court (MOLL J) answered E this question in the affirmative. In the course of his judgment the learned Judge observed at 959F - G:

"Having regard to the wide terms of the said regulations, it seems to me that it cannot be said that an order such as is claimed by the plaintiff could be made by this Court in the absence of the necessary permission from the Treasury. Without more the defendant is not competent to deliver to the F plaintiff, ie to make payment of the said amount to the plaintiff. In the ordinary course an order such as this is made on the basis that immediate effect shall be given thereto."

Counsel for the plaintiff in the Rhodesian Pulp case submitted that reg 3 (1) (c)

"did not have the effect of introducing a further element into the plaintiff's common law cause of action"

G (at 959H - 960A). This submission was rejected by MOLL J, who concluded at 961CD:

"... that it is in the present action necessary that permission from the Treasury or a person authorised by the Treasury should have been obtained prior to the institution of the present action and that such fact ought to have been stated in the plaintiff's particulars of claim."

H Accordingly in the Rhodesian Pulp case the plaintiff's exception to the defendant's special plea was dismissed with costs.

The problem presented by the facts of the Rhodesian Pulp case in the Transvaal in 1974 arose in Natal early in 1975 in an action for provisional sentence which came before MILLER J. The I Natal case is reported as Banco Standard Toita de Mocambique v Corbett Enterprises (Pty) Ltd 1975 (3) SA 300 (D). I shall refer to this decision as "the first Banco Standard case". In that case the plaintiff was a commercial bank resident in Mocambique and the defendant a company resident in Durban. The plaintiff's summons for provisional sentence did not allege that Treasury permission within the meaning of reg 3 (1) (c) in J respect of the payments claimed by the plaintiff had been granted. The defendant raised as a

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special defence that in the absence of such permission the A plaintiff was not in law entitled to claim payment of the amounts set forth in the summons. MILLER J found himself in agreement at 305H - 306A

"... with the conclusion reached in the Rhodesian Pulp and Paper case supra that it is a good defence to a claim for payment of money to a person resident outside the Republic that the necessary permission of the Treasury to make such payment B has not been granted."

However, the line of reasoning which led the learned Judge to the said conclusion was different from that adopted by MOLL J in the Rhodesian Pulp case. MILLER J reasoned that a judgment granted in favour of the plaintiff would be an ineffective one. Having referred (at 305A - C) to a judgment creditor's ordinary rights to proceed to attachment and sale in execution C of a judgment debtor's property, the learned Judge proceeded to say at 305C - H:

"But when, as in this type of case, the creditor's right to put the judgment to use for purpose of actual recovery of what is due to him is beyond the Court's control or protection because his rights in that regard are entirely dependent upon the decision of another (the Treasury), the judgment lacks effectiveness.

It appears to me that this is the only ground upon which the D Court would be justified in refusing, because of absence of Treasury permission, to enter judgment for a plaintiff who has established that a debt is owing and due. There is no statutory bar to the exercise by the Court of its jurisdiction to enter judgment for a plaintiff who has established that the debt in respect of which he claims is due and payable, but of its own volition the Court will not, generally, enter judgment, or make an order, the right to enforce which it cannot protect. It has E been repeatedly stated that, save for the principle of submission, 'the basic principle of jurisdiction is effectiveness'. (See Sonia (Pty) Ltd v Wheeler 1958 (1) SA 555 (A) at 563; Eilon v Eilon 1965 (1) SA 703 (A) at 725F - G; Thermo Radiant Oven Sales Ltd...