Commercial Union Trade Finance v Republic Bottlers of SA (Pty) Ltd t/a Booth's Bottle Store

• Jurisdiction: South Africa
• Citation: 1992 (4) SA 728 (D)

Commercial Union Trade Finance v Republic Bottlers of SA (Pty) Ltd t/a Booth's Bottle Store
1992 (4) SA 728 (D)

1992 (4) SA p728

Citation	1992 (4) SA 728 (D)
Court	Durban and Coast Local Division
Judge	Broome J
Heard	February 21, 1992
Judgment	June 4, 1992

Flynote : Sleutelwoorde

Bills of exchange — Cheque — Presentment for payment — When excused — Bills of Exchange Act 34 of 1964 s 44(2) — Cheque stopped by drawer — C Section 44(2) not referring explicitly to countermand by drawer as ground on which presentment dispensed with — Both requirements of s 44(2)(c) however fulfilled in such circumstances in that (1) drawee (bank) is not bound to pay bill and (2) drawer has no reason to believe that it would be paid if presented — Accordingly, presentment excused where payment D stopped by drawer.

Bills of exchange — Cheque — Presentment for payment — When excused — Section 44(2)(c) of Bills of Exchange Act 34 of 1964 — Cheque post-dated — Relevant time at which drawee not bound and drawer has no reason to believe that cheque would be paid if presented, not time at which cheque E was drawn but date for payment thereof.

Headnote : Kopnota

In the case of a post-dated cheque, the relevant time, in terms of s 44(2)(c) of the Bills of Exchange Act 34 of 1964, at which the drawee is not bound, and at which the drawer has no reason to believe that the F cheque would be paid if presented, is not the time at which the cheque was drawn but the time for payment.

The plaintiff claimed provisional sentence on a cheque drawn on T Bank by the defendant in favour of the plaintiff. The cheque had been handed by the plaintiff to N Bank for collection. N Bank had then caused the cheque to be 'presented' to T Bank's administration branch, which had in turn caused it to be 'presented' through the Automatic Clearing Bureau (ACB), the inter-bank clearing system. ACB then established that payment had been G stopped by the drawer (defendant). There had been no physical presentment of the cheque to T Bank: It had been 'presented' through ACB's computerised clearing system. The defendant denied that the cheque had in these circumstances been duly presented as required by the provisions of s 43(2)(c) of the Bills of Exchange Act 34 of 1964. The plaintiff contended that presentment had been dispensed with in terms of s 44(2)(c) of the Act (s 44(2) deals with the circumstances in which presentment is dispensed with) because payment had been stopped by the defendant (drawer). The H defendant replied that a countermand communicated by the drawer to the payee bank was not covered by the wording of s 44(2)(c) so that the plaintiff was not absolved from the duty to present the cheque. As to the defendant's denial that the cheque had been duly presented, the Court held that it agreed with the conclusion reached in Navidas (Pty) Ltd v Essop 1992 (3) SA 797 (D), where it was held that the requirements of s 43(2)(c) were not met where a cheque deposited for collection was processed through the electronic banking system and not physically presented for payment. As I to the plaintiff's contention that presentment had been dispensed with,

Held, that although s 44(2) did not refer explicitly to countermand of payment by the drawer as a ground on which presentment may be dispensed with, both requirements of s 44(2)(c) were satisfied in such circumstances: if the drawer stops payment, then it is obvious that the drawee bank is (1) not bound to pay the cheque and (2) equally obvious that the drawer can have no reason to believe the cheque would be paid if J presented.

1992 (4) SA p729

A Held, further, that it would indeed be strange and unreal in provisional sentence proceedings for non-presentment to constitute a good defence to the drawer of a cheque who had countermanded payment.

Held, accordingly, that provisional sentence had to be granted as claimed.

Case Information

Action for provisional sentence. The facts appear from the reasons for judgment.

B Miss V Niles-Dunér for the plaintiff.

D G Tobias for the defendant.

Cur adv vult.

Postea (June 4). C

Judgment

Broome J:

Plaintiff claims provisional sentence on a cheque drawn by defendant in favour of plaintiff for R84 180,48. The claim is resisted by defendant who has delivered opposing affidavits which have been replied to by plaintiff. A number of defences have been raised in the affidavits and D argued by counsel.

It is not disputed that:

(a)

During March 1991 defendant drew the cheque in favour of plaintiff and postdated it 13 May 1991.

(b)

The cheque was drawn on Trust Bank - Jacobs (the drawee bank);

(c)

E On 17 March 1991 it was handed by plaintiff to Nedbank, Johannesburg, for collection.

(d)

Nedbank, Johannesburg, caused it to be 'presented' to the Trust Bank Administration Branch (TBAB) in Gale Street, Durban, who then caused it to be 'presented' through the Automatic Clearing Bureau System (ACBS) on 14 May 1991.

(e)

F What the TBAB did was to 'present' the cheque by utilising its computer link, that is the ACBS. This established that payment had been stopped by the drawer (defendant). ACBS marked the cheque 'payment stopped' in terms of the stop payment instruction, and returned it to Nedbank.

G There was no physical presentment of the cheque to the drawee bank and it did not come into the possession of that bank for payment to be requested according to its tenor.

In these circumstances, defendant denies that the cheque was duly presented in terms of, or as required by, the provisions of s 43(2)(c) of the Bills of Exchange Act 34 of 1964 ('the Act').

I do not propose to dwell too long on this point because I am satisfied, H on good and powerfully persuasive authority, presented by Mr Tobias for defendant, that what happened here did not constitute proper presentment. An identical issue was decided in this Court on 19 April 1991 by Squires J in the case of Canoa Importers (Pty) Ltd v R E Eddy and J T Henshaw. This I judgment was followed in this Court on 24 April 1992 by P C Combrinck J in the case of Navidas (Pty) Ltd v M H Essop. [*] Squires J was impressed with the reasoning of Bingham J (albeit sitting as an arbitrator in accordance with s 4 of the Administration of Justice Act

1992 (4) SA p730

Broome J

A 1970) which is reported fully under the title Barclays Bank plc and Others v Bank of England [1985] 1 All ER 385 (Judge-Arbitrator). There is nothing that I can add to these judgments, other than -

(i)

to repeat that I find them good and powerfully persuasive; and

(ii)

that I agree with their conclusion.

B This is not the end of the matter.

Plaintiff's deponent, in his replying affidavit, made the contention that presentment had been dispensed with in terms of s 44(2)(c) of the Act because, as had been stated by defendant's deponent, Walmsley, in defendant's opposing affidavit, defendant stopped payment of the cheque. C It is not contended that his reasons for having done so established a probability that he would succeed in the principal case. But that does not affect the principle to be decided here, namely whether the circumstance, that payment of the cheque was stopped, absolved plaintiff from the duty to present it. Miss Niles-Dunér, for plaintiff, argued that presentment was indeed dispensed with. Mr Tobias met these arguments with two main D points, namely:

(1)

as plaintiff relied exclusively in its summons on the allegation that the cheque 'was duly presented by the plaintiff for payment and which was dishonoured by non-payment, the defendant having countermanded payment thereof on presentation for payment' it E could not make a new case in...