CIV/T/649/85

IN THE HIGH COURT OF LESOTHO

In the matter of :

BARCLAYS BANK PLC Plaintiff

V

TABRIH CONSULTANCY (PTY) LTD. Defendant

JUDGMENT

Delivered by the Hon. Acting Mr. Justice D.S. Levy on the 21st November, 1985.

Plaintiff bank sues for payment of an amount of M5590.06 with interest on that amount at the rate of 22% per annum from 2nd September 1985 being the balance owing by the Defendant to the Plaintiff in respect of overdraft facilities granted by Plaintiff to Defendant.

The Plaintiff alleges that Defendant operated a current banking account at Plaintiff's Maseru Branch and that it was an implied term of their contractual relationship that the overdraft with interest thereon at the prevailing rate from time to time would be repayable on demand.

Plaintiff alleges that as at 2nd September 1985 the Defendant's account has overdrawn to the extent of M5590.06 and that the prevailing rate of interest is 22% per annum.

In an application for summary judgment an affidavit has been filed by Defendant's managing director who states

that the overdraft facilities were extended by Plaintiff to Defendant on the basis of a specific practice that existed between Plaintiff and Defendant. He attaches

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bank statements to his affidavit which show that as far back as November 1984 Defendant's account was overdrawn in various amounts from time to time interspersed with long periods when the account was substantially in credit.

Deponent denies that there was any express or tacit agreement that repayment was to be made on demand. He says that Defendant's account was to be credited with any deposits as and when they arrived and any overdraft is therefore not due. Deponent further denies that any demand was made.

Hard as it may be to believe, it seems to be Defendant's allegation that the account if overdrawn is never repayable except by way of deposits made to the credit of the account as and when they arrive. This is tantamount to a statement that the account if overdrawn must remain in limbo, forever, if necessary, unless and until Defendant of its own choice makes deposits to the credit of that account. It must be borne in mind that deponent does not allege that this is the specific agreement between the parties but says that it arises out of the course of practice between them. I find such an inference impossible.

Normally, an overdraft is repayable either on demand or on the lapse of a reasonable time. See Trust Bank of Africa Ltd. v Senekal 1977(2) 857. The overdraft facilities have been used by Defendant for over a year now, and there is no room for any inference that Defendant was entitled to more than the lapse of a reasonable time for the use of the facility before it could be called up. The present overdraft situation has continued from 2nd August 1985 to 2^nd

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September 1985 during which time the amount overdrawn varied between M4609 end M12604 ending up on 2nd September 1985 in the amount claimed.

Summons was issued on 20th September 1985 and it seems to me that more than a reasonable time has elapsed entitling Plaintiff to call up the overdraft.

However, it is Plaintiff's case, even though denied by Defendant, that in terms of the agreement between the parties the overdraft was repayable on demand.

Plaintiff alleges, as an essential part of its case, that demand was made. This is denied by Plaintiff. On Plaintiff's version of the agreement demand is a condition precedent to its cause of action and is necessary in order to complete it. See Vessels Law of Contract 2nd Edition p. 2099. In the absence of demand the summons is defective Hooper v De Villiers 1936 TPD at 202. In view of Defendant's denial on oath that demand was made, Plaintiff is not entitled to summary judgment. The application is refused, Defendant is granted leave to defend the action and the costs of these proceedings are to be costs in the cause.

D.S. LEVY

ACTING JUDGE.

21st November, 1985.

For Plaintiff : Mr. Harley

For Defendant : Mr. Addy