South African Breweries Ltd v Ribeiro t/a

• Jurisdiction: South Africa
• Judge: Wunsh J
• Judgment Date: 29 September 1999
• Citation: 2000 (1) SA 803 (W)
• Docket Number: 99/12643
• Counsel: RA Solomon for the applicant WW Morris for the respondent
• Court: Witwatersrand Local Division

Wunsh J:

Introduction

The applicant seeks payment of R330 000, interest thereon from H 18 April 1995 and costs, based on an agreement signed by it and the respondent on 15 April 1995 (the agreement). The agreement recorded that the respondent was indebted to the applicant for beer purchases and that the respondent was claiming certain credits. The operative part of the agreement read: I

'1. The debtor shall be entitled to purchase beer from the creditor at the creditor's usual price during the creditor's normal working hours on Saturday, 15 April 1995, such purchases to be strictly on a cash with order basis only. It is however recorded that the creditor shall accept such orders of the debtor on Saturday, 15 April 1995 only to the extent in which it is able to supply the debtor on Saturday, 15 April 1995. J

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2. Before any order is released to the debtor on Saturday, 15 A April 1995, the debtor shall furnish the creditor with a cash payment of not less than R50 000 in reduction of his account with the creditor.

3. The debtor shall on Tuesday, 18 April 1995 furnish the creditor with a cash payment of not less than R330 000 in reduction of his account with the creditor, and shall by not later than 08:00 on B Saturday 15 April 1995 or before any order is released to him by the creditor on Saturday, 15 April 1995, whichever is the earlier, furnish the creditor as security for such payment with a cheque dated for Tuesday, 18 April 1995 for the sum of R330 000 and shall, on effecting such cash payment of R330 000 on Tuesday, 18 April 1995 as stated above, be entitled to claim return of such cheque tendered as security. In the event of the debtor not effecting the cash payment of C R330 000 on Tuesday, 18 April 1995 as stated above, the creditor shall be entitled to deposit such cheque tendered as security.

4. The debtor shall at exactly 08:00 on Tuesday, 18 April 1995, at the creditor's premises meet with representatives of the creditor for the purpose of reconciling the debtor's account with the creditor with a view to finality being reached to the satisfaction of both the D creditor and debtor as to the debtor's indebtedness to the creditor as at that date.

5. For the exercise envisaged in para 4 above, a period of not more than four hours shall be allocated, namely from 08:00 to 12:00 on Tuesday, 18 April 1995.

6. In the event the creditor and the debtor at the meeting referred to in 4 above agreeing as to the indebtedness of the debtor to the creditor as at that date, then and in that event: E

6.1

The parties shall agree on repayment by the debtor to the creditor of such indebtedness of the debtor to the creditor. For that purpose, the debtor shall sign an acknowledgment of debt in favour of the creditor, the terms and conditions of such an acknowledgment of debt to be those acceptable to the creditor.

6.2

The debtor shall furnish the creditor with such security as the F creditor may require, including, but not limited to, a pledge of all the debtor's movables (including a cession of the debtor's liquor licence) and/or the furnishing of special and/or general notarial bonds and/or mortgage bonds. The taking of such security by the creditor from the debtor shall at the discretion of the creditor not only be limited to security for the repayment by the debtor to the creditor of the G debtor's agreed indebtedness to the creditor as above, but also in respect of the debtor's future indebtedness to the creditor.

6.3

After 6.1 and 6.2 above have been satisfied, the debtor may continue trading with the creditor on such terms as the creditor may in its sole discretion decide upon.

6.4

For the purposes envisaged in 6.1 and 6.2 above, the debtor H shall sign all documents immediately upon being called to do so by the creditor or its attorneys.

7. In the event of the debtor and the creditor being unable to agree as to the indebtedness of the debtor to the creditor as at that date at the meeting referred to in 4 above, then, in that event, the creditor shall be entitled to take such action as it may deem necessary to I recover the indebtedness of the debtor to the creditor according to the records of the creditor.

8. . . .'

The respondent paid the R50 000 and delivered a cheque dated 15 April 1995 for R330 000 which was drawn by 'Victor Ribeiro Liquor No 2 CC t/a Midway L/Cell CK 94/15505/23'. I refer to it as 'the cheque'. The respondent, so it is alleged, failed to pay R330 000 in terms of clause 3 J

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of the agreement and the applicant A deposited the cheque but it was dishonoured. The copy annexed to the founding affidavit bears the words 'refer to drawer'.

The parties failed to reach agreement on the further balance outstanding as foreshadowed in the agreement and on 24 May 1995 the applicant issued summons against the respondent for payment of R1 897 426,93, which included the sum of R330 000. The plaintiff's B claim in the action has been reduced by R330 000 in terms of an amendment to its summons and declaration.

On 27 October 1995 the respondent filed a plea in the action. The action was, for reasons which have not been explained, postponed on a number of occasions and I was told from the Bar that it C is due to be heard on 18 November 1999.

The reason given by the applicant for bringing this application is that at the trial there may be 'a dispute in regard to the entire indebtedness as claimed by the applicant in the declaration' which would not affect the clear undertaking to pay R330 000 in the agreement. D

As an alternative to asking that the application be dismissed, the respondent seeks an order rectifying the agreement by substituting for himself 'Victor Ribeiro Liquors No 2 CC' (hereinafter referred to as 'the debtor t/a Midway Liquor Merchants of Stand 115, Midway Soweto'). I shall refer to the close corporation as 'the corporation'. E

Points in limine

The applicant remains in possession of the cheque

Mr Morris raised a defence in limine which, he said, was tantamount to an exception to the notice of motion. The objection is (I quote from the answering affidavit): F

'9. . . . (T)he applicant has retained possession of the said cheque.

10. In the circumstances it is incumbent in law if the applicant elects to sue not on the negotiable instrument but on the agreement, it is obliged to tender return of the negotiable instrument. Failure to do so renders the applicant's cause of action excipiable.' G

The answering affidavit deals with the remaining issues in case the point in limine should be dismissed.

The response in the replying affidavit is:

'Clearly, the fact that the applicant has chosen, in these proceedings, to claim payment of the sum of R330 000 would not entitle it, simultaneously, to institute proceedings based on the same debt, H but in respect of the cheque furnished. It is denied, however, that the applicant is obliged to tender return of the cheque to the respondent but, given the admitted insolvency of the close corporation, this is tendered.'

Mr Morris relied for his preliminary point on Adams v SA Motor Industry Employers Association 1981 (3) SA 1189 (A). I The appellant owed members of the Hoffe family ('the Hoffes') money for the purchase of shares in and claims against a company. After falling into arrears with his payments, he signed an acknowledgement of debt for the balance owing by him in which he undertook to pay the amount in instalments. The Hoffes ceded their claim under the acknowledgement of debt to the J

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respondent. He instituted action in this A Court for unpaid amounts owing under the acknowledgement of debt. This...