On
6 July 2009, the applicant issued summons against the respondent,
claiming provisional sentence in the sum of US$8,920= together with
interest thereon at the rate of 5% p. a. reckoned from the date of
the issuance of summons to date of payment in full.
In
the summons, the plaintiff alleged that the claim was based on a
letter written by the defendant's legal practitioners on 11 June
2009 in which the debt was allegedly acknowledged. A copy of the
letter was attached to the summons.
The
defendant did not satisfy the claim upon the provisional sentence
summons being served on him. Instead, he filed a notice of opposition
to which he attached an opposing affidavit. In the opposing
affidavit, he took the point in
limine
that the letter by his legal practitioners, of 11 June 2009, was not
a liquid document in terms of the rules governing provisional
sentence procedures. Regarding the merits of the matter, he averred
that there was a dispute as to the correct amount owing, and,
further, that the debt was not yet due and payable. Finally, he
averred that he has a counterclaim against the plaintiff's claim.
The
plaintiff filed an answering affidavit in which he denied most of the
facts raised by the defendant in the opposing affidavit. In addition,
the plaintiff maintained his position that the letter written by the
defendant's legal practitioners was a liquid document as it
contained an acknowledgment of indebtedness by the defendant in the
amount of the claim.
It
is appropriate, in my view, that, at this stage, I set out in some
detail the contents of the letter that the plaintiff relied on in
issuing provisional sentence summons in this matter. It reads:
“The
above matter refers, and pertinent is your letter dated 4th
of June 2009. We have since forwarded your proposal to our client. He
has instructed us to inform you that he unfortunately has to decline
to sign your acknowledgement of debt. There is no prudence in
committing oneself to something that he has neither the ability nor
the means to perform. However, our client has also instructed us to
increase his offer to pay off the balance to US800= per month. Should
your client accept, ours is prepared to make the first payment
immediately.”
In
the next paragraph, the legal practitioners make reference to certain
schedules of payments that had been exchanged between the parties and
highlighting the differences in these schedules. In the paragraph
that follows, they wrote:
“If
you calculate the total amount paid, according to your client's
records, it amounts to US$4,830=. If you look at annexure “C”,
which is a copy of the letter of demand sent to ours by yours, you
will find that the payments made so far have been paged at US$5,730=.
Clearly, your client's record of payments is inaccurate and
unreliable. Secondly,
if you refer again to annexure “C” and calculate the amount owing
with the figures as provided by your client on the letter of demand,
you will find that there is a calculation error and the balance owing
should actually be US$8,920=.
It is unclear where your client is getting the figure of US$5,730=
because his records show payments of US$4,830=.”…,.
It
is equally unclear to me what the various figures the parties were
referring to represented as none of the schedules referred to in the
letter were attached to the summons for provisional sentence. In
issuing summons for provisional sentence, the plaintiff relied on the
sentence in the letter by the legal practitioners which I have
highlighted above as representing the acknowledgment of indebtedness
by the defendant.
The
issue that falls for determination in this matter is whether or not
the letter written by the defendant's legal practitioners is a
liquid document for the purposes of the provisional sentence
procedure.
Order
4 Rule 20 of the High Court Rules, 1971 provides that where the
plaintiff is the holder of a valid acknowledgement in writing of a
debt, commonly called a liquid document, the plaintiff may cause a
summons to be issued claiming provisional sentence on the said
document.
The
term liquid document is not defined in the rules.
This
court has, however, held that any clear, unequivocal and unambiguous
written promise to pay a debt constitutes a liquid document. Thus,
any letter, to the extent that it is clear, unequivocal and
unambiguous and contains an acknowledgment of debt, can constitute a
liquid document for the purposes of the rules on provisional
sentence.
In
C.S.D
Enterprises (Pvt) Ltd v S. & T. Import and Export (Pvt) Ltd and
Others
1980 ZLR 238 (GD), the court had to determine whether a written
agreement of cession in terms of which the defendants had undertaken
to liquidate the original debtor's debt by way of fixed monthly
installments was a liquid document for provisional sentence purposes.
In finding that the cession agreement was a liquid document, the
court found, firstly, that a clear and unambiguous written promise to
pay fixed monthly amounts constitutes a liquid document. In this
regard, the court followed the decision in Oostlike
Transvaal Ko-Operasie Bpk v Kruger
1958 (2) SA 329 (T) wherein a letter to pay a certain fixed monthly
sum was held to be a liquid document to the extent that it contained
a promise to pay the sum each month. It was the clear, unequivocal
and unambiguous undertaking to discharge the indebtedness on a
monthly basis in Oostlike
Transvaal Ko-Operasie Bpk v Kruger
1958 (2) SA 329 (T) that persuaded the court to hold that the letter
offering the monthly payments was a liquid document.
Likewise,
in C.S.D
Enterprises (Pvt) Ltd v S. & T. Import and Export (Pvt) Ltd and
Others
1980 ZLR 238 (GD), the learned judge found that there was little
difference between the undertaking given in Oostlike
Transvaal Ko-Operasie Bpk v Kruger 1958 (2) SA 329 (T)
and the undertaking to pay that was embodied in clause 2 of the
cession agreement that was before him. It was his specific finding
that the provisions of clause 2 of the cession agreement was a clear
unequivocal and unambiguous undertaking binding the first defendant
to liquidate a definite indebtedness which came into being when the
cession agreement was signed.
In
casu,
it appears to me that the letter attached to the summons for
provisional sentence is part of an exchange of correspondence where
the amount of the indebtedness was in dispute and was being debated
as between the parties. To that extent, the amount of the
indebtedness was not certain or definite. Further, it also appears to
me that in the letter, the defendant's legal practitioners were
challenging the calculations done by the plaintiff. They, instead,
offered his own calculations and the resultant balance outstanding
which was different from the amount demanded by the plaintiff. To
this extent, I view the letter as more of an arithmetical upstaging
exercise of the plaintiff by the defendant's legal practitioners
rather than an unequivocal acceptance by the defendant that this was
the sum outstanding and that he was promising to liquidate it.
It
is therefore my finding that the letter attached to the summons was
not a clear undertaking to pay any amount accepted as outstanding. It
was fairly ambiguous as one cannot tell whether the defendant's
legal practitioners were merely showing that the correct calculations
on the plaintiff's own figures would give a different result or
were actually giving the correct calculations and the correct amount
owing.
I
have considered whether the offer made by the defendant, to increase
his offer to $800= per month, can be considered as a clear,
unequivocal and unambiguous undertaking to pay off the debt as was
held in Oostlike
Transvaal Ko-Operasie Bpk v Kruger 1958 (2) SA 329 (T).
I
have compared the language that was used by the defendant in that
case and the language used by the defendant's legal practitioners
in this case. In that case, the defendant personally wrote:
“With
reference to our discussion in connection with the above amount, (the
sum of $185.13.9.), I wish to confirm that I will pay to you a
minimum of $5 per month with interest at 6 per cent. Enclosed please
find a cheque for an amount of $5 being payment for July 1952.”
(For $ read pound).
I
agree that the above constituted a clear and unequivocal undertaking
to pay off the amount of the debt at the rate stated. In contrast,
the defendant before me made a conditional offer to settle the debt
at the rate of $800= per month on condition the plaintiff accepted
the offer. In my view, the offer was equivocal to the extent it would
be considered binding upon the parties if the plaintiff found it
acceptable.
Apart
from the equivocal offer to settle the debt at $800= per month, I do
not read the letter as containing any other undertaking to pay off
the debt.
On
the basis of the foregoing, I will hold that the letter attached to
the plaintiff's summons for provisional sentence is not a liquid
document. Accordingly, I decline provisional sentence in this matter.
Assuming
that I have erred in refusing to hold the letter as a liquid
document, I still would have declined provisional sentence in this
matter on another basis.
From
the correspondence that the parties attached to the pleadings in this
matter, it is common cause that the transaction giving rise to the
dispute between the parties was a sale of certain equipment. The sale
was concluded in September 2008. The equipment was sold for
US$14,650=. This was prior to the date when the exchange control
authorities allowed the use of foreign currencies for ordinary trade
within the jurisdiction, and, thus, the agreement fell foul of the
relevant foreign exchange regulations of the time that prohibited
individuals from exchanging goods or services for foreign currency
without prior approval of the exchange control authorities. In this
regard, the transaction between the parties was tainted with
illegality. See Matsitka
v Jumvea Zimbabwe (Private) Limited and Another
2003 (1) ZLR 71 (H).
It
is the settled position at law that where the court is faced with an
agreement that is tainted by illegality, the court may allow the loss
to lie where it falls, or may relax the rule against illegality to do
justice between the parties. Whether to allow the loss to lie where
it falls or to relax the rule against illegal agreements to do
justice between the parties is an issue to be determined at the trial
of the matter and cannot be debated at provisional sentence stage.
Provisional
sentence procedure is a summary procedure that allows the holder of a
liquid document to obtain judgment and execute upon that judgment
before the trial of the matter. In that regard, it may be termed an
extraordinary remedy procedure although it has been part of our civil
procedure for decades.
In
taking the above approach, I am guided by the remarks by PRICE J in
Allied
Holdings Ltd v Myerson
1948 (2) SA 961 (W) where…, he had the following to say:
“It
is recognized, of course, that a liquid document, which, on the face
of it, speaks unequivocally, must have the story of the transaction
behind it and that an investigation into that story may show that the
defendant is not liable in terms of the liquid document; but once we
go behind the liquid document the onus is on the defendant to show
that if evidence were heard the probabilities are that he would
succeed.”
In
casu,
it is not in dispute that the agreement antecedent to the alleged
liquid document was a sale of equipment for United States dollars at
a time when the legal tender for all transactions within the
jurisdiction was the local currency. The defendant, whilst not
denying the letter, is, in my view, going behind the letter to show
that the antecedent transaction was tainted with illegality and may
be unenforceable against him.
It
is my view that provisional sentence may not be granted on a liquid
document that embodies an illegal agreement as to do so is tantamount
to lending legality to the agreement - albeit provisionally.
On
the basis of the foregoing, I would have declined provisional
sentence in the matter. In the result, I make the following order:
1.
Provisional sentence is refused.
2.
The matter is hereby ordered to stand over for trial.
3.
The defendant shall enter appearance to defend within 10 days of the
date of this order.
4.
Costs of this hearing shall be in the cause.
