Woolfsons Credit (Pty) Ltd (Formerly Vavasseur (SA) Credit (Pty) Ltd) v Holdt

• Jurisdiction: South Africa
• Judge: Leon J
• Judgment Date: 20 April 1977
• Citation: 1977 (3) SA 720 (N)
• Hearing Date: 01 April 1977
• Court: Natal Provincial Division

Leon, J.:

In this action the plaintiff has claimed provisional B sentence against the defendant in an amount of R41 852,74 together with interest thereon, at the rate of 11/2 per cent per month, from 1 October 1976 to date of payment, and costs taxed on the attorney and client scale.

The total amount is claimed as rental under eleven written C agreements of lease, four of which having been entered into on 30 March 1973 and the remaining seven on 11 April 1973. These agreements were entered into between Vavasseur (S.A.) Credit (Pty.) Ltd. and the defendant but the plaintiff is entitled to sue by virtue of the fact that Vavasseur changed its name to that of the plaintiff and by virtue of the provisions of sec. 44 (3) of the Companies Act, 61 of 1973.

D In terms of each of the agreements of lease:

(a)

the plaintiff agreed to lease to the defendant, for a period of three years, the vehicle described in the portion of the written lease headed "Schedule of goods selected and approved by the lessee";

(b)

the defendant agreed and undertook to pay a total amount of R10 886,40 as and for rental in terms of the E lease, the amount being payable by way of 36 monthly payments of R302,40 each, such payments to be made on or before the dates stipulated in each of the said agreements;

(c)

the defendant agreed, in terms of clause 1 (c) of each of the said agreements, to pay interest at the rate of F 11/2, per cent per month on all overdue rentals from the date on which each instalment of rental became overdue to the date of payment thereof;

(d)

it was agreed, by virtue of the provisions of clause 3 of each of the agreements of lease, that a certificate under the hand of any officer or employee of the plaintiff would be sufficient proof of the amount owing by the defendant to the plaintiff in G terms of the lease at any material stage of the lease;

(e)

the defendant agreed, in terms of clause 14 (a) of each agreement, that, in the event of the plaintiff incurring legal expenses in the recovery of any moneys payable but unpaid by the defendant under the agreement, the plaintiff would be entitled to recover H such costs from the defendant, taxed on the attorney and client scale.

Similar allegations of default are made with respect to each of the leases. In each case it is alleged that no payments of rental have been made by the defendant since 30 October 1976 and the amount due represents the difference between the obligations undertaken by the defendant and the total amount paid by him. In proof of the amounts said to be due the plaintiff has annexed certificates by one N. Hamilton, a duly authorised employee of the plaintiff.

Leon J

Having set out the amounts owing as arrear rentals in paras. 5, 6 and 7 of the summons the plaintiff has alleged in para. 8 thereof that

"in the premises set out in para. 5, 6 and 7 hereof, the defendant is indebted to the plaintiff in the total amount A of R14 852,74 together with interest thereon at the rate of 11/2 per cent per month from 30 October 1976 to date of payment".

The summons also refers to a notarial bond which was registered on behalf of the defendant on 24 September 1976 over two vehicles and to a second mortgage bond passed over two B immovable properties belonging to the defendant. The summons sought an order that the hypothecated property be declared executable but this claim was not pursued by Mr. Hurt who appeared for the plaintiff. In each of the leases the defendant warranted that he had selected and approved the goods the subject of the lease and that the goods have been delivered to him.

C Mr. Combrink, who appeared on behalf of the defendant, submitted in limine that the leases sued upon were not liquid documents entitling the plaintiff to provisional sentence. Mr. Combrink emphasised that a liquid document is one which, on a proper construction thereof, evidences by its terms and without resort to extrinsic evidence: (a) an acknowledgment of indebtedness (b) in an ascertained amount of money (c) the payment of which is due to the creditor, and (d) that the D acknowledgment of indebtedness is unconditional (Western Bank Ltd. v Pretorius, 1976 (2) SA 481 (T) at pp. 483H - 484A; Rich and Others v Lagerwey, 1974 (4) SA 748 (AD) at p. 754).

E It was common cause between counsel that only one lease need be looked at as each of them contains identical terms. It was urged on behalf of the defendant that the documents were not liquid as reciprocal obligations were involved, i.e., if there was no delivery by the lessor no payment of rent would be due by the defendant. It was also suggested that the amount due was F not readily determinable or ascertainable and that the reference in clause 3 of the lease to a certificate by an officer or employee of the lessor has the effect of causing the document to be illiquid.

Mr. Hurt for the plaintiff referred to a number of cases on provisional sentence where a lease was the document sued upon and contended that the leases in question satisfied all the requirements of a liquid document.

G In Rich and Others v Lagerwey, supra, it was held at p. 754 that, if upon a proper construction thereof the agreement evidences an unconditional undertaking to pay, it is a liquid document for the purposes of provisional sentence. A document otherwise liquid does not cease to be such because payment is dependent upon the fulfillment of a simple condition. (Pepler v Hirschberg, 1920 CPD 438.) But due consideration must be H given to the word "simple" (see Rich's case at p. 755). It seems to connote a condition or event...