Sassoon Confirming and Acceptance Co (Pty) Ltd v Barclays National Bank Ltd

• Jurisdiction: South Africa
• Judge: Rumpff JA, Potgieter JA, Jansen JA, Trollip JA and Muller JA
• Judgment Date: 03 December 1973
• Citation: 1974 (1) SA 641 (A)
• Hearing Date: 05 September 1973
• Court: Appellate Division

Jansen, J.A.:

Before proceeding with this matter I wish to record that POTGIETER, J.A., whose recent sudden death has occasioned a great loss to this Bench and deep sorrow to his colleagues, played a significant role in its adjudication. The following judgment represents the views of the remaining members of the Bench that heard this appeal, but they are in substantial agreement with those expressed by our late Brother A before his death.

The appellant company (hereinafter called Sassoon) applied to the Witwatersrand Local Division for an order against the respondent bank (hereinafter called the Bank) for payment of R6 262,38, interest a tempore morae, and costs. The application B was refused with costs, but an application by the Bank that such costs should include the fees of two counsel was equally unsuccessful. (For the judgment of IRVING STEYN, J., see 1973 (1) SA 892 et seq.). Sassoon then appealed to the Transvaal Provincial Division and the Bank likewise cross-appealed (against the refusal of the application for the C fees of two counsel). Both appeal and cross-appeal were dismissed with costs (per CLAASSEN, J.; BEKKER and F. S. STEYN, JJ., concurring). The Court, however, granted the parties leave to pursue their respective appeals further.

Sassoon's cause of action is based on a letter written by the Bank to Sassoon's attorneys on 29th January, 1971. It reads as follows:

D "Dear Sirs,

In the event of Sassoon Confirming and Acceptance Co. (Pty.) Ltd. being awarded a final judgment against Ludwick Kleiner arising out of any personal liability which he may have incurred in respect of the promissory note, a photostatic copy whereof is hereunto annexed and which has been initialled for identification purposes, we shall, failing a settlement of such final judgment within seven days from its award, pay to you the amount of such final judgment, but not exceeding the sum of R6 262,38.

E It is a condition of this undertaking that any action which Sassoon Confirming and Acceptance Co. (Pty.) Ltd. may wish to institute against Ludwick Kleiner in respect of the promissory note be so instituted within a period of 60 days from date hereof, failing which this guarantee shall lapse and be of no further force or effect.

Save as aforesaid, this guarantee may not be withdrawn or revoked by us. This guarantee is neither negotiable nor transferable."

The promissory note is a printed form with the details written F in - the sum being R6 262,38, payable on 31 December, 1970, to Demona Knitwear (Pty.) Ltd. or order. Alongside the printed words "Drawer's Name" there is handwritten "Rand Shipping Co. SA (Pty.) Ltd.," with the signature "L. Kleiner" below it. It is common cause that at all material times Sassoon was the holder.

G Within the stipulated 60 days Sassoon instituted provisional sentence proceedings against Kleiner on the note. Opposing affidavits were filed on behalf of Kleiner. On the afternoon before the matter was to have been heard, however, Kleiner's estate was provisionally sequestrated on an "urgent" application by a cessionary of a claim for R250. Sassoon then gave notice in terms of sec. 75 (1) of the Insolvency Act, 24 H of 1936, that it intended to continue the proceedings. It substituted the trustee as defendant in terms of Supreme Court Rule 15 (2), and in due course obtained provisional sentence.

The provisional sentence became a final judgment after the lapse of two months (Supreme Court Rule 8 (11)). As it was not settled within seven days thereafter, Sassoon claimed R6 262,38 from the Bank. The Bank refused to pay. It contended that the judgment against the trustee

Jansen JA

was not a "judgment against Ludwick Kleiner" in terms of the letter. Sassoon then resorted to the motion proceedings which are now, ultimately, before us.

Both Courts below found that a literal reading of "judgment A against Ludwick Kleiner" gave its plain and unambiguous meaning - thus effectively closing the door to any surrounding circumstances which might point in a different direction - and, accordingly, upheld the Bank's contention.

The first step in construing a contract is to determine the B ordinary grammatical meaning of the words used by the parties (Jonnes v AngloAfrican Shipping Co. (1936) Ltd., 1972 (2) SA 827 (AD) at p. 834E). Very few words, however, bear a single meaning, and the "ordinary" meaning of words appearing in a contract will necessarily depend upon the context in which they are used, their interrelation, and the nature of the C transaction as it appears from the entire contract. It may, for example, be quite plain from reading the contract as a whole that a certain word or words are not used in their popular everyday meaning, but are employed in a somewhat exceptional, or even technical sense. The meaning of a contract is, therefore, not necessarily determined by merely taking each D individual word and applying to it one of its ordinary meanings.

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