Diners Club SA (Pty) Ltd v Singh and Another

• Jurisdiction: South Africa
• Judge: Levinsohn J
• Judgment Date: 30 July 2003
• Citation: 2004 (3) SA 630 (D)
• Docket Number: 3156/2000
• Counsel: P M M Lane SC (with him K J Trisk) for the plaintiff. A K Kissoon Singh SC (with him M W Collins) for the defendants.
• Court: Durban and Coast Local Division

Levinsohn J:

The plaintiff operates a credit card business. In this action it sues the defendants jointly and severally for the amount of R607 423, 12 together with mora interest at the rate of 20% per annum together with costs on an attorney and client scale. The trial of the action commenced in March 2002 and after several postponements and H interlocutory applications continued in London, United Kingdom, where the evidence of several witnesses were heard on commission. The hearing in London commenced on 3 March 2003 and ended on 11 March. Thereafter the case resumed in Durban on 24 March 2003 until 28 March 2003. I heard argument on 22 May 2003 and then reserved judgment. Mr Lane SC, with him Mr Trisk, I appeared for the plaintiff and Mr Kissoon Singh SC, with him Mr Collins, appeared for the defendants. I wish at the outset to thank counsel on both sides for their assistance in this fairly complex and lengthy case.

In its particulars of claim the plaintiff alleges that in 1997 it issued a Diners credit card to the first defendant and to his wife, the second J

Levinsohn J

defendant. The issue of the cards was governed by certain contractual terms. These terms are alleged to be in writing and A are evidenced by a written document that is described as an 'Application for personal membership of Diners Club'. Both the defendants, under their respective signatures, acknowledged the following:

'Subject to the current general terms and conditions applying to the issue of a personal Diners Club Card. The member and the joint B additional cardholder on the members account accept joint and several liability as co-principal debtor for all charges incurred on the cards issued on this account. By their signatures hereto they also accept the terms and conditions of Diners Club membership as amended from time to time with which they acknowledge themselves to be acquainted and agree to pay all monies to Diners Club in terms of the said membership.' C

The full contractual terms and conditions are incorporated as part of the application. It is necessary to highlight some of its clauses:

'3. The card

3.4

Shall at the discretion of Diners Club be renewed annually by despatch of a renewal card/s prior to expiry of the existing card/s to D the cardholder at the last notified address on record. Such renewal, or where applicable, replacement card/s is/are issued subject to the prevailing terms and conditions accompanying the card, of which the cardholder shall be deemed to be aware of and to have accepted upon use of the card.'

(My emphasis.) E

'8.1

Upon presentation by or on behalf of Diners Club in a court of law or otherwise, of a billing form, voucher or any other document including computerised printouts and substitute documents evidencing any use of the card then:

8.1.1

the card shall be deemed to have been used in accordance with these terms and conditions; F

8.1.2

the billing form, voucher or other document shall be deemed to have been signed and/or used by the cardholder;

8.1.3

the payment of the debits therein reflected shall be deemed to have been made by Diners Club to the establishment.

8.2

Microfilm copies of billing forms, debit vouchers, accounts or of any other relevant documents (including computer printouts and G substitute documents) shall upon presentation thereof by or on behalf of Diners Club, be deemed to be true copies of the original documents, and be deemed to be what they purport to be, unless the contrary is proved, the onus whereof will rest upon the cardholder.

8.3

A certificate under the signature of any manager of Diners Club shall upon its mere production by Diners Club or its legal H representative and without any evidence being required therefor, constitute prima facie proof of such indebtedness, the amount due and payable at date of signature of certificate.

. . .

11.1

Diners Club may at any time and in its sole and absolute discretion amend or substitute all or any of these terms and I conditions.

11.2

Notice of such amendment/substitution shall be by way of the despatch of the amended/substituted terms and conditions with renewal or replacement cards.

11.3

The cardholder shall be deemed to have agreed to such amendment/substitution upon use of the renewal or replacement card.'

(My emphasis.) J

Levinsohn J

Initially the defendants in their plea placed in issue the allegations in regard to the conclusion of and the terms of the A contract. However, after the commencement of the trial it became common cause that the defendants had indeed concluded this contract with the plaintiff. It was also common cause that the certificate of Vito Prospero was a certificate such as is envisaged in the agreement and it correctly reflected the defendants' indebtedness. Counsel for the plaintiff accordingly elected to proceed in terms of Rule 39(13) and B adduce evidence only on those issues where it bore the onus.

An issue that was not resolved in the pre-trial proceedings and which remained in dispute was whether the agreement as amended had been renewed in 1998. C

The plaintiff called the evidence of Colleen du Preez. She testified that she was the manager, 'new applications'. Her duty was to research applications received and pass them for approval and she had knowledge about the renewal of credit cards. She said that the card would be renewed 60 days before its expiry date. This would take place automatically if the account was in order. In the case of the D defendants their new cards were issued in December 1999. Accompanying the new cards was what she referred to as a card pack and this pack set forth the applicable contractual terms and conditions. These terms and conditions had been in force since 1998. There was no challenge to this evidence. The plaintiff then closed its case. E

Counsel for the defendants did not seek absolution from the instance - counsel for the defendants remarking in passing

'I am not going to apply for absolution from the instance in view of the certificate which was handed in M'Lord. It is my intention to call the defendants to testify, as well as certain additional witnesses.' F

During counsel for the plaintiff's opening address, and indeed when the defendants' counsel opened his case, it became apparent that the real and substantial factual issue in the case centred around 190 successful ATM cash withdrawals performed in London over the weekend of 4 and 5 March 2000 at various ATMs. The proceeds of these withdrawals amounted to some 54 000 pounds sterling, roughly G equivalent to R500 000. The plaintiff's case was that the first defendant's card and personal identification number ('PIN') was used to make these withdrawals and the amounts withdrawn are reflected on his account which has been certified as mentioned above. The defendant's case was that he had not gone to London that weekend, H his card was at all times in his possession and his PIN had not been given to anyone. In essence the defendant's fundamental contention is that some unknown person or persons are guilty of plundering these ATMs on the two days in question. Defendant's evidence falls into two categories. First, evidence surrounding the events from I approximately 16 February 2000 to 7 March 2000 and, secondly, evidence of an expert nature, the major portion of which was adduced in London. The basic hypothesis of the expert testimony was that an 'insider' in either Standard Bank South Africa or in the Diners Club organisation had probably accessed these transactions. (It is important to record that the plaintiff is a South African company which operates under a franchise granted to it by Diners Club International J

Levinsohn J

(DCI) in the UK. Hence the use of the phrase 'Diners Club organisation' to A encompass all these entities.)

The first defendant testified that he carries on business at Chatsworth. By all accounts he is a very successful businessman. In 1997 he was approached to become a member of Diners Club. He confirmed that cards were issued to him and to his wife. At that time he did not apply for a PIN number. At the end of 1999 his account with Diners was B in good standing and during December 1999 he received renewal cards for both himself and his wife. He admitted that the card received was in a pack folder which he removed and threw away.

On 16 February he was advised by a Nedbank official to obtain PIN numbers for all his credit cards. As a result of this he called at the Chatsworth branch of the Standard Bank and applied for PIN numbers C for his Standard Bank credit card as well as for both his and his wife's Diners Club cards. According to the first defendant PIN numbers contained in an envelope were issued in respect of both Diners cards. I may mention at this stage that there is a factual dispute in regard to the precise sequence of events leading up to the issue of the D second defendant's card.

The first defendant testified that from 16 February to 2 March he did not use his Diners card. On 3 March, a Friday he decided to withdraw R100 from a Nedbank ATM using his Diners card. The ATM is situated across the road from his business premises in Stanger. The transaction was rejected by the ATM and he then took R100 E out of his business and proceeded to the Durban International Airport where he was due to pick up his friend's daughter, Samantha Singh. Samantha is employed at the airport and, according to the first defendant, she finished work at 12:00 and would be outside the building at 12:15. When he arrived at the airport she was not waiting for him. Because he had some time he went into the airport building. F Here he saw an ATM machine and he decided to attempt once again to make a withdrawal on his Diners Club card. This also failed. After picking up Samantha he went to the Standard Bank in...