CIV/T/649/85
IN THE HIGH COURT___OF LESOTHO
In the matter of:
BARCLAYS BANK PLC Plaintiff
vs
TABIRITH CONSULTANCY (PTY) LTD Defendant
JUDGMENT
Delivered by the honourable Acting Chief Justice Mr. justice JL. Kheola on the 5th day of January, 1987,
The facts of this case are that the Plaintiff issued summons against the Defendant for the repayment of monies lent and advanced on an overdraft, The defendant entered an Appearance to defend and the Plaintiff applied for a Summary Judgment. The application was dismissed on the ground that on plaintiff's version of the agreement demand is a condition precedent to its cause of action and necessary in order to complete it. It was held that in the absence of demand the summons was defective.
It was further held that in view of defendant s denial on oath that demand was made, plaintiff is not entitled to summary judgment, The defendant was given leave to defend the action and the costs of the application were to be costs in the cause
The basis of the plaintiff's claim was that an amount of M5,590-06 was outstanding and due, owing and payable together with interest thereon
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from the 2nd September, 1985 at the rate of 22% per annum to the date of repayment.
On the 3rd June, 1986 a pre-trial conference was held by the attorneys of the parties. Paragraph 2 of the minutes of the pre-trial conference reads as follows "the plaintiffs have decided that there is no further purpose in continuing with the claim as the defendant has repayed the overdraft, but that defendants' should bear the costs of withdrawing the case.
The defendant refuses to pay such costs and the matter has been set down for the decision of the Court.
Mr. Harley, for the plaintiff, argued that the general rule that the successful party is entitled to his costs must be followed in the present case. He submitted that the plaintiff in these proceedings has been substantially successful in that it was compelled to approach this Court for the relief which it sought. It so happened that the defendant capitulated and repaid the overdraft voluntarily.
Consequently, the plaintiff, even in the absence of a judgment has been substantially successful in these proceedings and is consequently entitled to costs which follow the result.
Mr. Addy, for the defendant, submitted that the plaintiff has in fact withdrawn the proceedings and is bound to pay costs. There had been no merit in the plaintiff's action right from the start.
It is clear that the plaintiff did not formally withdraw the action in terms of Rule 43 of the High Court Rules 1980. I do not agree with the submission that the plaintiff has withdrawn its action. By repaying the overdraft the defendant made it unnecessary for the plaintiff to continue
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with the case. In any case, the question of costs must be decided on the answer to the question: If the matter had gone to trial and the merits thoroughly canvassed who would have been a successful party? It stands to reason that I must go into the merits and decide who would have been the winner if the matter went to trial. In Pretoria Garrison Institutes v. Danish Variety Products (PTY) LTD., 1948 (1) S.A. 839 at 871-872 Schreiner, J.A. said:
"On the other hand, there is some inconvenience in allowing the merits to be examined, perhaps at great length, when only costs are at stake. No doubt this is sometimes unavoidable, as, for instance, where cases are settled on the meritswithout an agreement being arrived at in regard to the costs. In such cases the the merits may have to be gone into in order to decide who would have been the successful party so as to apply the general rule that the winner on the merits gets his costs."
It is common cause that at the relevant time the defendant's account was overdrawn to the tune of M5,590-06. It is the defendant's contention that there was no express or.tacit agreement that the overdraft was to be repaid on demand. It contends that the defendant's account was to be credited.with any deposits as and when they arrived and any overdraft is therefore not due. This means that if the account was overdrawn and the defendant had no money to deposit into the account the overdraft would never be due. As Levy, A.J. said in the application for summary judgment:
"This is tantamount to a statement that the account if overdrawn must remain in limbo, forever, if necessary, unless and until defendant on its own choice makes deposits to the credit of that account."
The defendant does not allege that this was express agreement between the parties but says that it arose out of the practice between
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them. I do not believe that a commercial bank like the plaintiff would agree that its money should be held by a customer for an indefinite time. It is true that it will charge interest at the end of every month but it still wants to have its money after a reasonable time to ensure that the debtor is able to repay the loan.
Under normal circumstances an overdraft is repayable either on demand or after the lapse of a reasonable time (Trust Bank of Africa v. Senekal, 1977 (2) S.A. 587). Looking at the previous practice between the parties it is clear that the defendant regularly repaid overdrawn amounts within hardly a month. It was only on one occasion when the account remained overdrawn for about three months, i.e. from the 11th January, 1985 to the 12th April, 1985. The overdraft which is the subject matter of the present dispute was incurred from the 2nd August, 1985 to the 2nd September, 1985 when the plaintiff demanded repayment. I agree with Levy, A.J. that a month was a reasonable time within which the demand could be made.
The defence of the defendant that the overdraft was to be repaid only when the account was credited with any deposits and receipts in favour of the said account as and when such deposits and receipts arrive is improbable and unreasonable. The probable thing is that the overdraft was repayable on demand. By repaying the overdraft before evidence was led the defendant denied the plaintiff the right of proving that there was an implied term of the agreement between the parties that the overdraft, together with the interest thereon, would be repaid to the plaintiff on demand.
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I am of the opinion that if the matter had gone to trial and the merits examined the plaintiff would have been the successful party and I find no reason why costs would not have been awarded to it. I accordingly award costs to the plaintiff.
J.L. KHEOLA
ACTING CHIEF JUSTICE.
5th January, 1987.
For Plaintiff - Mr. Harley
For Defendant - Mr. Addy.
