This is an appeal against the judgment of the High Court in
which summary judgment was granted against the appellant. After hearing
argument by the appellant's legal practitioner we did not consider it necessary
to hear counsel for the respondent. We dismissed the appeal in its entirety
with costs on the scale of attorney and client and intimated that the reasons
for the dismissal of the appeal will follow.
These are they.
The respondent supplied various consignments of fuel to the
appellant over a period spanning from March 2011 to February 2012 at the
latter's specific instance and request. The agreement between the parties was
that once the fuel has been sold by the appellant, in respect of each
consignment, then payment is made for that particular consignment. During the
period in question, the appellant made erratic payments thereby incurring a
debt amounting to US$58,335=.
On 17 April 2012, the parties' representatives drafted and
signed an acknowledgment of debt couched in pertinent part in these words:
“RE: OUTSTANDING
FUEL PAYMENTS BY BRADFIELD SERVICE STATION
…,. Attached is a schedule of all deliveries made to
Bradfield Service Station and corresponding payments, leaving a balance
therefore of U$58,335= (sic) owing by Bradfield Service Station. The two
parties have agreed that interest at the rate of one and half percent will be
paid monthly by Bradfield Service Station.
With regards (sic) to the repayment of the capital owing,
Mr Luwo has applied for a loan (sic) which was promised to him by the end of
March 2012 and he is still waiting for it. Should the loan not be received by
him by the end of April 2012, the parties need to agree on an alternative
repayment plan for the amount owing.
Signed ………………………………………………
P Pliossof
Signed ………………………………………………
D Luwo”
Following several unsuccessful demands, the respondent
caused summons to be issued against the appellant on 28 January 2013
claiming:
(a) Payment of the sum of US$58,335= as per the
acknowledgment of debt;
(b) Interest thereon at the rate of 1,5% per month calculated
from the date of the acknowledgment of debt, being 17 April, 2012, to date of
payment in full;
(c) Costs of suit.
The appellant entered appearance to defend and filed what
it termed a special plea averring:
“The defendant specially pleads that the same matter
between substantially the same parties is still pending in this court under
case number HC3595/12 which matter the plaintiff purportedly withdrew from this
court on 26 January 2013 but which withdrawal is null and void. Wherefore,
defendant prays for the dismissal of the plaintiff's claims with costs on the
attorney–client scale.”
Thereafter, the respondent made an application for summary
judgment premised upon the acknowledgment of debt alluded to supra. The
appellant opposed the application by raising a number of preliminary issues
which were essentially not germane to the resolution of the real issue between
the parties. The court a quo properly was not detained by those issues. On the
merits, the appellant claimed that it had a bona fide defence set out in
paragraph 4.1 of the opposing affidavit which reads:
“4.1 Whilst I admit having signed, on behalf of respondent,
the document annexed to applicant's papers as Annexure “B”; that document makes
it clear that payment of the amount due was conditional upon my receiving a
loan from a financial institution. In other words, a condition precedent to the
payment of the amount outstanding has not been met.”
The issue for resolution by the court a quo was simply
whether the penultimate paragraph in the acknowledgment of debt cited above
constituted a condition, let alone a suspensive condition, of the contract that
was concluded between the parties.
The contract between the parties was concluded sometime in
March, 2011 for the supply of fuel by respondent to the appellant with the
latter paying for each consignment soon after it had been sold. The appellant
breached the contract by failing to pay as agreed upon thereby incurring arrear
payments amounting to $58,335= by 17 April 2012, the date of signing of the
acknowledgment of debt. The acknowledgment of debt, in essence, is not the
contract concluded by the parties. It simply constitutes an admission by the
appellant of the amount owing and an undertaking by the same party of how it
proposed to pay off the debt. It certainly cannot amount to a condition which
renders the operation of the contract dependent upon the occurrence of a future
uncertain event. Its nature is not suspensive, at least not post end of April
2012, and it cannot be made so merely by it being called a condition precedent.
It certainly cannot be said that when the parties drafted
and signed the acknowledgment of debt in that vein it was within their
contemplation to upgrade the proposed modality of payment of the outstanding
amount to a suspensive condition of the contract, otherwise a novation of the
original agreement would have taken place. If the modality of payment suggested
in the acknowledgment of debt were to be interpreted in the sense contended for
by the appellant, it would “lead to a conclusion that flouts business common
sense, [and] it must be made to yield to business common sense.” Per LORD
DIPLOCK in Antaios Compania Naviera S.A. v Salen Rederierna A. B. [1985] AC 191…,.
Clearly, the appellant had no defence to the respondent's
claim, let alone one bona fide. It did nothing for one year seven months, that
is from the signing of the acknowledgment of debt to 12 December 2013, when the
application for summary judgment was heard, to ensure that the alleged promised
loan was availed to it or engaged respondent for an alternative repayment plan.
Surely, the respondent cannot be expected to wait for payment forever in vain.
The “defence” raised by the appellant was rightly dismissed by the learned
Judge a quo as spurious and simply meant to buy time.
It is on the basis of the foregoing reasons that
the appeal was dismissed in its entirety with costs on an attorney–client
scale.
