De Villiers and Others NNO v Electronic Media Network (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Kirk-Cohen J
• Judgment Date: 24 August 1990
• Citation: 1991 (2) SA 180 (W)
• Hearing Date: 15 August 1990
• Court: Witwatersrand Local Division

Kirk-Cohen J:

This is an action for provisional sentence based upon a cheque drawn on 10 August 1989 by the defendant in favour of a company, GBS South Africa (Pty) Ltd (GBS). Upon presentation the cheque was dishonoured, the drawee banker, Volkskas Bpk, noting thereon 'Betaling H gestaak'.

When the matter was called counsel for the defendant raised two points in limine. In order to deal with his argument it is necessary to set out the following facts:

1.

Prior to issuing the cheque on or about 10 August 1989 the defendant deleted the words 'or bearer - of toonder' where they I appear after the payee's name and also marked the cheque in block capitals 'NOT TRANSFERABLE', apparently by the use of a rubber stamp. There is no endorsement on the obverse or reverse of the cheque.

2.

GBS was placed under a final order of liquidation by order of this J Court on 15 August 1989.

Kirk-Cohen J

3.

A The three plaintiffs in this matter were appointed liquidators of GBS.

4.

The three plaintiffs, as liquidators, launched an application to convene meetings of creditors of GBS in terms of the provisions of s 311 of the Companies Act 61 of 1963, which was granted.

5.

The proposed compromise was duly approved by creditors and B sanctioned by this Court on 30 March 1990.

6.

In terms of the compromise:

6.1

GBS was discharged from liquidation;

6.2

the three plaintiffs were appointed receivers for creditors;

6.3

in their capacity as receivers they were obliged to realise C 'excluded assets' for the benefit of creditors;

6.4

the receivers were granted, inter alia, the following powers: they

'... shall... have all such powers as the liquidators would have had, including the right to take action against any debtors of the company, other than in respect of the designated debts, and in particular to take whatever steps D are necessary to set aside any preferences or dispositions without value and/or to conduct enquiries mutatis mutandis as if pursuant to ss 415 and 417 of the (Companies) Act'.

7.

GBS was thus to retain 'designated debts' and all other debts due E to GBS were termed 'excluded assets'. The claim based upon the dishonoured cheque was not specifically dealt with in the compromise but was regarded as an 'excluded asset'. For the purposes of this matter I shall assume that it fell within the definition of 'excluded assets'.

8.

In the provisional sentence summons issued by the plaintiffs on 4 F June 1990 they are described as

'M L De Villiers, N Bowman & A H Gunn in their capacities as joint receivers for the creditors of GBS South Africa (Pty) Ltd, they being duly appointed joint receivers for creditors of GBS South Africa (Pty) Ltd'.

9.

G The causa upon which the plaintiffs rely is phrased as follows:

'The plaintiff (sic) is the legal holder of certain cheque dated 10 August 1989 for R117 991,80 drawn by the defendant in favour of GBS South Africa (Pty) Ltd.'

This is the cheque in question.

10.

The plaintiffs are in physical possession of the cheque and it H was handed in at the hearing of this matter.

The points in limine are:

1.

The plaintiffs have no right whatsoever to claim provisional sentence on, or payment of, the dishonoured cheque.

2.

The summons does not set out allegations to establish the locus I standi of the plaintiffs or an enforceable causa.

The first argument

The Bills of Exchange Act 34 of 1964 ('the Act') defines a 'holder' as

'... the payee or endorsee of a bill or note, who is in possession of J it or the bearer thereof'.

Kirk-Cohen J

A The plaintiffs are not the designated payees of the cheque. Equally, they cannot claim to be endorsees as there is no purported endorsement. They are not bearers of the cheque as it is not made payable to bearer (in terms of its issue or any purported endorsement).

Mere possession of a bill or note does not constitute the possessor a holder; to qualify as such the possessor must either be the payee, B endorsee or bearer (see Fourie v Grobbelaar 1947 (3) SA 93 (T) at 95...