Bowman, De Wet and Du Plessis NNO and Others v Fidelity Bank Ltd

• Jurisdiction: South Africa
• Judge: Harms JA, Van Heerden JA, Eksteen JA, Nienaber JA, and Zulman JA
• Judgment Date: 28 November 1996
• Citation: 1997 (2) SA 35 (A)
• Docket Number: 144/95
• Hearing Date: 18 November 1996
• Counsel: S Van Nieuwenhuizen for the appellants M Basslian for the respondent
• Court: Appellate Division

Harms JA:

This appeal concerns the application of the principles of the condictio indebiti. Absolution from the instance with costs was decreed against the appellants, C the plaintiffs, after the close of their case and before the respondent, Fidelity Bank Ltd ('Fidelity') had presented or closed its case. The trial Judge in the Witwatersrand Local Division, Roux J, subsequently granted leave to appeal to this Court. Whether the appellants will ultimately be entitled to judgment is not the issue, but only whether there D was evidence before the Court below upon which a court might reasonably have found for them (Gascoyne v Paul and Hunter 1917 TPD 170 at 173; cf Marine & Trade Insurance Co Ltd v Van der Schyff 1972 (1) SA 26 (A) at 37H et seq, per Jansen JA). Accordingly, the facts set out in this judgment do not represent final factual findings, but rather agreed facts or those that have been established prima facie by the E plaintiffs.

Mabula Lodge was a game farm, hotel and shareblock concern and it experienced financial difficulties at the beginning of 1991. This led to the liquidation of Mabula Investments (Pty) Ltd ('the company'), and to the sequestration of the estates of Messrs Joubert Snr and Jnr, seemingly the driving forces behind the enterprise. The F assets of Mabula Lodge belonged to these three parties and to some others and the liquidation of the three estates, for practical reasons, had to be dealt with as one. The first plaintiffs, three professional liquidators, were appointed as the joint liquidators of the company and they were (at the time of the alleged overpayment - the subject of the G claim) still acting in that capacity. Subsequently, a scheme of arrangement was sanctioned and the company was discharged from liquidation. The first plaintiffs were released from their aforesaid appointment and were instead appointed as the joint receivers of the company. In this new capacity they instituted the present proceedings as first plaintiffs. The second and third plaintiffs are professional trustees and are the H trustees of, respectively, Joubert Snr and Jnr. The company, discharged from liquidation, is the fourth plaintiff.

The liquidators and trustees realised at an early stage that it was in the best interests of the different bodies of creditors to attempt to sell Mabula Lodge as an entity. For this they obtained the consent of the Master of the Supreme Court, who granted it subject I to the agreement of, among others, Fidelity. The reason for the condition was that Fidelity was a secured creditor of the company and the Jouberts. Fidelity was, however, only prepared to consent if it had certainty about what it would receive for its securities from such a sale. For that reason an agreement was concluded between the first, second and third plaintiffs (all acting as either provisional liquidators or as provisional trustees), on the one side, J

Harms JA

and Fidelity on the other. These plaintiffs therein undertook to pay, in the event of a A sale of Mabula Lodge, a net sum in respect of each secured claim. That means that the agreement determined in advance what Fidelity's secured dividend would be, and the plaintiffs were obliged to pay a net value, without the deduction of any administration expenses, upon receipt of the purchase price for Mabula Lodge. This agreement, entered into on or about 17 June 1991, enabled the trustees and liquidators to B determine the minimum price against which they could sell the concern.

The secured indebtedness of the company to Fidelity was R197 344,21 and the amount payable to Fidelity for the security was agreed upon as R150 000. As far as C Joubert Snr is concerned, the corresponding figures were R298 101,53 and R245 000, and in relation to Joubert Jnr, R277 243,93 and R245 000. Fidelity was thus entitled to what the parties called a 'net cheque value' of R640 000 in respect of its three secured claims. Apart therefrom, Fidelity remained a concurrent creditor of the estates of both Jouberts. The cause of those claims was a suretyship creating joint and D several liability. The same amount, namely R453 925,34, was accordingly proved against each of their estates in relation thereto.

Mabula Lodge was sold after some delay and Fidelity became impatient about yet further delays relating to transfer of the assets to the purchaser and the payment E therefor. To allay Fidelity's irritation, a sum of R10 000 was paid on 13 August 1991. It did not have the desired effect. On 13 September Fidelity's attorneys wrote a letter in these terms to the liquidators and trustees:

'We have been advised by our client, Fidelity Bank, to record that:

1.

An amount of approximately R950 000 (italics added) is due to it from the F proceeds of the transfer of the company in liquidation.

2.

The transfer has been unduly delayed and our client has suffered damages and is still suffering damages on a daily basis.

3.

Our client intends recovering the aforesaid damages from the liquidator should the proceeds not be sufficient to settle the damages as well. . . .' G

The original or composition of the higher amount has to date not been explained, not in the pleadings nor during the course of cross-examination. The letter had more than the desired effect. A cheque for the claimed amount was immediately requisitioned and prepared and when transfer was effected on 20 September the payment of R950 000 was made. Taking into account the earlier payment of R10 000, it represented an H overpayment on the agreement of R320 000. Upon the realisation during October of the overpayment, a repayment was requested. This was initially refused, but without any sensible explanation a sum of R100 000 was refunded by Fidelity on 31 January 1992.

Roux J found, on a number of counts, that the plaintiffs had failed to make out a prima I facie case entitling them to the balance of the overpayment, namely R220 000, by way of the condictio indebiti. Counsel for Fidelity, in argument, supported the judgment and I turn to consider the correctness or otherwise of these findings and submissions.

There has been more than one attempt to state or restate the requirements of the condictio indebiti, but these formulations were more J

Harms JA

often than not concerned with the problems of the specific case and have to be read in A that limited context. This case, in particular, does not require a similar exercise. I do wish, however, to point out at the outset that the principles underlying the condictio are not immutable and that, in principle, a party is entitled to rely 'op die analogiese aanwending van die condictio indebiti' (Kommissaris van Binnelandse Inkomste en B 'n Ander v Willers en Andere 1994 (3) SA 283 (A), especially at 333G-H). The rules of the condictio are also not identical for all situations and there is scope for deviation, for instance where deceased or insolvent...