HIGH COURT OF LESOTHO
matter of :
STANDARD CHARTERED BANK LESOTHO LTD Plaintiff
RETSELISITSOE SEKHONYANA 1st Defendant
JOSEPHINE SEKHONYANA 2nd Defendant
AGNES MOPELI 3rd Defendant
by the Honourable Mr Justice ML. Lehohla on the 29th day of November,
the 1st Defendant died before the closure of the defence case he was
substituted by the second defendant who for convenience
referred to as the 1st defendant and the 3rd defendant as the 2nd
defendant while the deceased shall be referred to either
as such or
by his name Retšelisitsoe Sekhonyana.
procedural aspect relating to the filing of the heads of arguments it
should be observed that after leading the evidence
of the 1st and
only defence witness
van der Linde, Mr Mphalane indicated, on the resumption of the
postponement that was required in order to find the deceased's
substitute, that he was left with no option but to withdraw as
representative for the defendants because of differences that seemed
impossible to resolve then.
result the two defendants were virtually left in the lurch. What is
more they were not even present when the matter resumed.
Hoffman for the plaintiff started moving the Court for dismissal of
the defendants' case. It was while he was making
his submission in
this regard and was about fifteen minutes into his arguments that the
2nd defendant pitched into Court. Having
been given an audience she
pleaded that she would seek the indulgence of the Court to find a
legal representative for her and her
Hoffman while agreeable to this sought to persuade the Court that
Judgment should be granted against the defendant who was absent.
mindful of one of the aspects it took into account when giving a
ruling earlier following an application for absolution
instance was constrained to refuse Mr Hoffman's prayer. In that
ruling the Court had taken into
consideration that the two defendants had pinned their colours to the
that in terms of the principles pertinent to that ruling all the
defendants were to be treated as one. Thus it couldn't
sense that when one defendant was present before Court and the other
absent Judgment should be entered against that other
even though the
one present sought an indulgence to secure legal representation for
both defendants. Refusal to grant this indulgence
undermined a principle on which the previous ruling turned. Moreover
the deceased was the life-blood of the fight waged
plaintiff It wouldn't be fair to incline to the suggestion by Mr
Hoffman that a lone woman in these circumstances should
be asked to
say what the lawyer she was going to look for would say failing which
the matter should be decided against the defence.
Her very plight was
a factor crying out for legal representation.
matter was accordingly postponed. On the day when it resumed Mr
Mphalane informed Court that he was once more appearing for
defendants. He there and then closed the case for the defence.
Hoffman addressed Court without benefit of heads of arguments.
Understandably so. For who would have thought that the defence
call further evidence, especially in the light of the fact that PW1
was not contradicted in most essential respects which were fatally
adverse to the defence case.
Mphalane for his part had his heads of arguments ready and was able
to guide the Court along them in his closing address to which
Hoffman replied. At the close of the addresses Mr Hoffman was
directed by the Court to formalise his oral address by means of
of arguments covering his main address and reply to Mr Mphalane's
address. The learned Counsel duly complied by filing them
Summons the plaintiff instituted action against the deceased and the
two defendants, jointly and severally, the one paying
the others to
be absolved for :
of the sum of Ml 847 122-94. This amount was amended later claim by
thereon at the rate of 18,5% per annum calculated from 9th December
1994 to date of payment.
calculation was later amended during proceedings to 04-01-1995.
Application for amendements in paragraphs 1 and 2 was granted.
order declaring the following properties specially mortgaged under
Hypothecation executable, namely:-
3.1 Plot No. 17684-009, situate at Lower Moyeni, Quthing Urban Area
in the district of Quthing, as held under Deed of Transfer
registered on 19th November 1991.
3.2 Plot No. 12281-008, situated at Maseru West, Maseru Urban Area,
in the District of Maseru, as held under Lease No. 12281-008,
registered on 29th June 1981.
and/or alternative relief.
of contents of page 10 of the Ruling dated 4th November, 1998 in the
instant matter reflects the following which
is essential for
providing the basis for this suit:
June 1993, 'Malerotholi the 1st defendant as a surety and
co-principal debtor secured indebtedness of the deceased who was
principal debtor by way of registration of a continuing covering Deed
of Hypothecation No. 23724 in favour of the Plaintiff
in the office
of the Deeds Registry, Maseru, under the Deeds Registry Act of 1967.
defendants admit Ad Paras 6 through 14 that the Mortgage Bonds were
registered over the property reflected in the Declaration and that
the Deed of Suretyship was signed by the 2nd defendant 'Masenate.
the defendants plead that the deceased denies indebtedness towards
the plaintiff, therefore they maintain that the plaintiff
entitled to rely on the security set out in the Mortgage Bond or in
regard to the suretyship.
be noted that the 1st defendant is the deceased's wife married to
him, during his life time, in community of property
and duly assisted
by him with chosen domicilium citandi et executandi for the purposes
of the instant action in respect of plot
defendant is described as a major spinster and Lesotho
citizen................with chosen domilium citandi et executandi
the purposes of the present action is (sic) Plot No. 12281-008 Maseru
West, Maseru Urban Area. The plaintiff sets out in its
that the deceased entered into an oral agreement with it at Maseru at
the deceased's special instance and request that
plaintiff lend and
advance money to him from time to time on overdraft facility. This
oral agreement also provided for the repayment
of the said money on
reflected at page 16 of Volume 1 of the defendants' plea this is
indeed common cause.
defendants however deny in their plea that it was ever the specific
term of the said oral agreement that the said overdraft
would carry interest at the prime lending rate of the Central Bank,
which at all material times till issuance of summons
was 18.5%. The
defendants challenged the plaintiff to furnish proof of this
defendants further deny in their plea contents of paragraph 5 of the
plaintiff's declaration that on 9th December, 1994 and
again on 31st
January, 1995 the plaintiff demanded in writing from the deceased
payment of the sum of Ml 847 122-94, being monies
advanced in terms
of the aforesaid oral agreement. The defendants are emphatic that the
deceased is not indebted to the plaintiff
in the amount of Ml 847
122-94 or any other amount and put the plaintiff to the proof
the defendants' attitude towards paragraphs 6,7,8,9,10,11,12,13 and
14 of the plaintiffs declaration was covered in the
reasons for the
previous ruling made following an application for the absolution from
it to say the defendants admitted that Mortgage Bonds were registered
over the property reflected in the plaintiff's declaration
the Deed of Suretyship was signed by the present 2nd defendant
'Masenate Mopeli who was originally the 3rd Defendant.
the defendants pleaded that as the deceased denied indebtedness
towards the plaintiff the latter, they maintain, is not
rely on the security set out in the Mortgage Bonds or in regard to
the Suretyship. Thus they therefore deny that these
surities may be
called upon by the plaintiff and put the plaintiff to proof that it
response to the plaintiff's charge and complaint that the defendants
have failed to pay the indebtedness of the deceased, they,
plead that they were entitled to refuse payment for reasons set out
above scenario it remains to see by reference to evidence led in this
proceeding if the defendants' stance has any support
before then it is worth mentioning that the pleadings make it
that the deceased conducted a bank account with the plaintiff bank,
were lent to him from time to time on overdraft.
the deceased's substitute, admits passing a security bond over the
Lower Moyeni property in order to secure the debt
to the bank of the
deceased up to an amount of Ml - million.
Mopeli admits signing a deed of suretyship guaranting the debt to the
deceased's bank up to an amount of Ml 200 000 and
passing a covering
bond to support that suretyship in terms of which she hypothecated
the plot 12281-008 Maseru West in favour
of the bank. The accuracy of
these observations is gathered from paragraphs 6 to 13 of the
declaration read with paragraph 4 of
the defendants' plea at page 67.
plaintiffs only witness who was called is S.M. Rahlao who testified
on oath that he started his employment with the Standard
South Africa Limited on 5th May 1966. This came to later be known as
the Standard Chartered Bank in 1969. This in turn
was taken over by
the present NedBank from 2nd January 1997. The take over was achieved
through negotiations in consequence of
previously conducted under the name Standard Chartered Bank were not
they remained the same. The debts which were in the books are still
in those books. The account numbers haven't changed
nor has the
manner in which the bank conducts its business. The modus operandi.
presently a senior manager of the plaintiff and as such has dealt
over an extended period, with the deceased.
testified that from time to time, overdraft facilities were extended
and increased, and that by late 1994 the bank was extremely
at the state of the account. This is adequately borne out by the
number of letters written by the plaintiff to the deceased;
on record the fact that the account was over its limit.
stated that he knew the deceased for a long time in a personal
capacity, but later got to know him as a Bank client from 1993.
witness indicated that the deceased enjoyed considerable banking
facilities in the early nineties going on towards 1993.
the end of 1993 the bank was gravely concerned with the way the
accounts were being conducted by the deceased who kept on
the limits allocated in respect of his overdraft.
testified that the deceased had two accounts. The concern was
particularly in respect of the hotel business of Orange River
in Quthing. The bank facility allowed this particular account some
advance for working capital purposes.
witness was led to refer the Court in this regard to page 78 of
Volume II (the discovered documents) where a letter marked A1
written on 13-08-93 by the bank and addressed to E.R. Sekhonyana to
the effect that:
"Our records show that your Account No. 027042 13 756 was
overdrawn to the extent of Ml 343 352-60 on 12-08-93. Please adjust.
Yours faithfully Manager."
credence to the state of the deceased's account is reflected in the
discovered letters addressed to the deceased by PW1
consist of a letter
06-09-93 at page 79 showing debit on current account as Ml 417 210-58
business account as M10 087-28. This letter opens up by referring the
addressee to "previous verbal reminders about
extended to" the deceased reflected in the heading of the
letter. The heading consists of the two amounts reflected
paragraph of my judgment.
80 of the discovered documents bundle PW1 further indicates in a note
addressed to the deceased that as of 16-11-93 Account
No. 027042 13
7561 was overdrawn to the extent of Ml 651 529-97.
12-11-93 this account was overdrawn to the extent of Ml 629 953-85.
As of 22-11-93 the amount overdrawn was 1 666 978-82.
By 09-12-93 the
amount was Ml 719 280-10.
increase in this pattern is reflected for the dates : 21-12-93;
24-12-93 and 29-12-93 culminating in the overdrawn amount of
evidence was led on behalf of the defendants to counteract this
serious worsening of the deceased's financial position in the
On the contrary Mr Mphalane in argument contents himself with
submitting that there is no proof that Mr Sekhonyana received
and other forms of correspondence on the same subject.
as indicated earlier that the deceased and his co-defendants deny
anything, the deceased's own letter tells a different story that is
enough to thwart any contention to the effect that he never
the correspondence in question from the bank.
103 of the discovered documents bundle, in a letter dated 29-11-1994
addressed to PW1 the deceased writes as follows :
Overdue-Account E.R. Sekhonyana
received several letters from you drawing me to the gravity of the
status of abovementioned account........."
may pause here and reflect one would indeed be in agreement with the
writer of this letter that not only were numerous letters
not responded to, written to the deceased as stated by PW1 but that
the gravity of the status of the deceased's account
was not in doubt.
It is in
this connection that the submission by Mr Mphalane is in serious
conflict with the deceased's state of mind as reflected
letter which further continues :
"I am aware that I have in the past few months promised you a
injection of substantive funds towards a situation whereby a full
settlement could be realised. I am aware that other attempts
only partially meet my indebtedness to the Bank, and it is the latter
situation which has led me to attempt securing overseas
cover the account. There is yet no basis to abandon this attempt and
I am frantically working for a settlement at the
latest by end of
again a pause and reflection would enable one to quickly discern a
sharp conflict between the allegation in the plea that the
owe nothing, buttressed by argument in that regard by their Counsel,
and the plain admission borne out by the deceased's
reference to his
indebtedness to the Bank Coupled with this indebtedness there is
clear indication that the deceased had no immediate
means of reducing
or putting right his account with the Bank hence his allusion to
looking overseas for unguaranteed hope that
he might secure the funds
to settle his account.
of this letter and the projected period i.e. January/February when
hopefully there would be settlement of this account
are preceded by
numerous and obviously unanswered letters written by PW1 spanning the
dates 05-05-94; 19-05-94; 04-08-94; 09-09-94
and -5-11-94 showing the
debit in the account to have steadily risen from upwards of M2.1
Million (Maloti) to M2 420 424-45 debit.
humility the deceased concluded his letter by saying :
again please bear with me and I sincerely apologise for what may seem
to have been lack of taking your warnings seriously.
I take them
therefore with the submission made by Mr Hoffman as even supported by
evidence of PW1 that at no stage did the deceased
query the amount of
his overdraft as reflected in the correspondence sent by the bank to
him. If he indeed queried the amount of
his overdraft how else would
his above-quoted letter be reconcilable with any such contention.
substance in Mr Hoffman's submission with which I agree that
statements were sent to the deceased by post from month to
uncontroverted evidence of PW1 established. None of these were either
queried nor put in dispute in any way. The statements
page 117 to 282 of the discovered documents bundle Volume II barring
some five odd pages constituting Plaintiff's Further
thus be bizarre to expect the Court to entertain any wild notion that
these documents are faulty when none of them was
queried at the time
they were being sent to the deceased who must have received them.
Court paid particular attention to the cross-examination of PW1 in
and determine what case was being put by the defence to the
plaintiff. PW1 was not tackled on the evidence he gave in-chief.
thrust of the cross-examination as later urged on the Court by Mr
Hoffman, was devoted entirely to finding if PW1 could separate
interest from capital with reference to the bank statements. Of
course PW1 said he could not do so nor did he see the need
so to do.
was not told through cross-examination of the plaintiff's witness
what the defendants were going to say in an endeavour
to alert the
Court to what could seriously be regarded to be their defence to this
action. This stands out significantly in the
light of the fact that
PW1's evidence was that the statements were sent and never queried by
Mr Sekhonyana. No question was put
to the effect that Mr Sekhonyana
would testify to the contrary or what exactly would be his version in
the face of PW1's story.
contrary to the contentions insisted on by the defendants' Counsel
the deceased's conduct has, through his rare ever occasions
responded to the plaintiff, been consistent with his implicit
acceptance of liability.
instance in a letter written by him on 26th April, 1994 addressed to
the plaintiff he says at page 93 of Vol 2 :
apologise for delay to reply to your several (sic) querries re the
current overdraft excess on Account,
personal level I have had several close deaths and a major ongoing
sedition case which ends at the close of the month of May,
detailed my younger brother, Morena Bereng Sekhonyana to follow up on
the issue in accordance with the details I gave you
during the verbal
thus been assured that we should be in a position to liquidate the
excess perhaps during the first week of June if not earlier.
meantime 1 humbly request for normal facilities to avoid catastrophic
this one gathers an attitude of a man who is in no illusion about the
worrying state of his ever-growing debt but who is
so steeped in
Micawberian optimism that something good will turn up despite the
absence of any tangible or visible evidence of
the basis for such
hope barring perhaps the infinitely remote possibility that by
wielding of some magical wand; dust and ashes
can be turned into
gold. I am afraid that no commercial institution worth its salt can
fall for that.
also significant that Morena Bereng Sekhonyana made mention of in the
above letter did not come to testify in support of contentions
by defence counsel especially after the deceased's death vet he was
assigned the task of looking after the
affairs of the deceased when the latter was fast held by matters that
caused him to
replying to plaintiffs letters. The only inference to make is that
Chief Bereng failed to step into the breach because he
doing so would be inconsistent with the true state of affairs he
discovered when performing duties assigned him by his
the letter's stated inability to do so personally.
close of the plaintiffs case DW1 Mrs van der Linde came to the stand
and testified on oath for the defence. DW1 said that
she is an accountant at Ladybrand and has been in practice as such
for the last four years. She further indicated
that she is a Member
of the Commercial and Financial Accounts Institute. She holds a
Bachelor of Commerce Degree and has done her
articles through the
Institute of Commercial and Financial Accountants.
testified that she had occasion to look at the bank statements
involving E.R. Sekhonyana at the standard Bank.
she compiled a record of her exercise in a document entitled Notice
to Discover (in terms of) Rule 34(1).
plaintiff's discovery affidavit and the deceased's statements were
attached in the document she prepared. These were handed
marked Exhibits "C" and 19 "D" respectively.
testified in-chief that she could not give an opinion on the
beginning balance of M372 000-00 because she did not have he
necessary for the purpose. Apparently her analysis only
commenced from a point when the account was already overdrawn to the
of M372 000-00.
not the only disadvantage that bedevilled her efforts to adduce
evidence that would be of assistance to the Court but as
pointed out her analysis is flawed in that it makes no provision for
bank charges. This was a legitimate criticism of
her evidence because
it seemed that she made an assumption that all debits other than
those relating to cheques are to be considered
from the disadvantage of inadequate information DW1 found herself
being compelled to work under the results emanating from
assumption she made cannot be reliable at all.
time DW1 was out of her depth while under cross-examination. In the
result she conceded a number of vital points raised on
behalf of the
plaintiff. In her concessions the Court was able to discern lack of
bias in her character. At least she didn't give
the impression of
having come to Court to give a story that exclusively
conceded that hers was only to do an arithmetic calculation. She was
led to this concession as the next logical step after conceding
follows at page 156-157
"You have totalled the cheques written.............? Yes
You have totalled the deposits..................? Yes
And you have said that there is a difference between those two......?
And you have said that the remaining amount of the overdraft is taken
account of by way of interest and bank charges.............?
have added up as well as it appeared on the bank statements"
has had a look at various bank statements in this proceeding and
observed that apart from interest, various other debits
from time to time; and that interest is invariably shown as a
separate debit in each and every month.
Hoffman took at random the Bank statement 47 which he referred to as
a typical one when putting it to DW1 who conceded it was.
witness was guided through entries in this statement which reflected
debits column and bank charges showing typical country
commission of M2-00 and a service charge of M28-26. DW1 conceded that
these indeed were normal sort of entries to expect
on a bank
statement. She also conceded that she could not say
the commissions were properly charged or whether the bank charges
raised or not as that was not her mandate.
above background that in effect constitutes DW1's evidence under
cross-examination it is easy to observe that commissions
on country cheques, that bank charges were issued for M12 742-55 and
M4 066-00. Further that commissions were charged
on bank cheques and
cash paid in the sum of Ml 2 000-00. Other statements follow this
pattern in a more or less typical fashion.
as pointed out earlier the sort of evidence that van der Linde was
called to lead is of no assistance to the defendants
nor to the Court
in view of concessions she made when confronted with what the case is
about. As pointed out by Mr Hoffman she
cross-examination that her calculations were based on the difference
between monies deposited and cheques written
by the deceased and that
the difference represents interest and charges. Apart from the fact
that this is incorrect, she did not
even seek to separate interest
from charges. See pages 157-158 of the record.
briefly dealt with evidence set out above it remains to deal with the
law. It has previously been demonstrated that the deceased
did not at
any stage dispute his indebtedness to the plaintiff. Had he done so,
no doubt he would have
the bank statements which he kept on receiving. He would have written
to the numerous letters received by him and stated that he disagreed
with the extent of his indebtedness. Instead what
unsolicited admissions of his liability notwithstanding his counsel's
submissions to the contrary is his letter of
19-11-94 referred to
earlier. See page 103 Vol 2 of Discovery Documents.
Benefit Cycle Works vs Atmore 1927 TPD p.524 which turned on more or
less a similar principle to the instant matter De Waal J.P.
"Now what are the other circumstances in this case, apart from
the evidence of the two witnesses, Maltz and the defendant?
the circumstance that a letter was written on the day which the
conversation took place in which Spitz placed on record
telephonic conversation of that date, that is, that the defendant had
undertaken personally to make payment of the amount owing
To that letter no reply was vouchsafed, nor was a reply vouchsafed to
the letter of the 7th February, nor to the letter
of the 18th
February, in all of which the defendant is referred to the terms of
his verbal undertaking to be personally responsible
indebtedness. That is a circumstance to my mind which drops the scale
in favour of the probability that the evidence
given by the plaintiff
is the true evidence. I am quite in agreement with Mr. Price that a
letter which places on record something
false does not necessarily
call for a reply from the person to whom it is addressed. If for
instance a letter is written by A to
B, stating that B owed A a
certain amount of money, and B has had no prior dealings with A,
there would be no obligation on the
part of B to reply to that
letter; but where, as in this case, negotiations had taken place
immediately preceding the writing of
the letter, and the writer then
places on record his version of what had taken place during the
negotiations, and there is no reply
by the other side, then the Court
is bound to attach the greatest importance to that fact. In Wiedeman
vs Walpole (1891, 2 QB at
534), the question to be determined was
whether the plaintiff in an action for damages for breach of promise
marriage could rely on the fact that she had written a letter to the
defendant to which no reply had been vouchsafed. In dealing
matter the MASTER OF THE ROLLS said this at p.537 : 'Now the
allegation in the present case was that the defendant, had
to marry the plaintiff. Suppose, however, the letter had charged
against him some grievous offence or misconduct, and
the writer had
stated that unless the defendant paid something he would be exposed.
The argument, if true at all, must be that
by not answering such a
letter the man who receives it must be taken to admit that he is
guilty of the charges contained in it.
Now there are cases, business
and mercantile cases, in which the Courts have taken notice that in
the ordinary course of business
if one man of business states in a
letter to another that he has agreed to do certain things, the person
who receives that letter
must answer it if he means to dispute the
fact that he did not so agree. So, where merchants are in dispute one
with the other'
but you promised me that you could do this or that,'
if the other does not answer the letter, but proceeds with
must be taken to admit the truth of the statemen1st;
and Lord Kay says at p.541 : ' There are certain letters written on
matters and received by one of the parties to the litigation
before the Court, the not answering of which has been taken as very
strong evidence that the person receiving the letter admitted the
truth of what was stated in it. In some cases that is the only
possible conclusion that could be
entirely with the exposition of the law distilled from the above
statement and would venture to say in the instant case
point to the deceased as having admitted his liability to the
plaintiff because the writing of letters by the plaintiff
deceased who either didn't reply to or took a long time to respond to
some of them without denying contents of those letters
when he did
so, was preceded by negotiations over bank facilities between the
plaintiff and the deceased.
further comfort from Hoffmann & Zeffert1sts invaluable works On
Evidence pp 180-181 where the learned authors say :
question is always whether it would be reasonable to infer that the
party concerned did not answer because he acknowledged
that the facts
stated in the letter were true... The principle was summed up by
Miller J.A. in Me Williams vs First Consolidated
(Pty)Limited 1982(2) S A 1 (A):
'In general, when according to ordinary commercial practice and human
expectation firm repudiation of.......... an assertion would
norm if it was not accepted as correct, a party's silence and
inaction unless satisfactorily explained may be taken to constitute
an admission by him of the truth of the assertion, or at least will
be an important factor telling against him in the assessment
probabilities and in the final determination of the dispute. And an
adverse inference will the more readily be drawn when
unchallenged assertion had been preceded by correspondence or
negotiations between the parties relative to the subject-matter
of some nicety was raised in argument by Mr Mphalane for the
defendants. That matter relates to the principle that it is
permissible that interest should exceed capital debt.
agree with the salutary effect of this principle and do acknowledge
the binding nature of its application by our Court of
such was pronounced I do not for a moment think that this principle
could be capriciously and whimsically resorted
to at any stage during
proceedings in Court and without having
It is one
of the basic requirements in civil litigation that pleadings should
be conducted with discipline. A practical application
requirement is that a defendant "must clearly and concisely
state all material facts upon which he relies". See
van Winsen : The Civil Practice of the Supreme Court of south
463 the Learned authors say that apart from denying allegations with
which the defendant disagrees "if any explanation
qualification of a denial is necessary it must be stated in the
aware that Mr Mphalane came into the scene long after pleadings had
been closed and that he is not the one who drew the pleadings.
since there was no attempt to apply for amendment of pleadings he had
no option but to toboggan within the confines of a narrow
set and designed for him by someone else. Furthermore it is a
cardinal rule in civil procedure that no side should be
spring a surprise on the other.
principle that Mr Mphalane sought to invoke albeit at a wrong stage
of the proceedings is one based on and generally known as
rule. But in all
where this rule has been raised it has always been by way of a plea.
Nor has it ever been suggested that a general denial
will suffice to
enable a defendant to raise the principle.
satisfactorily summarised in Standard Bank of South Africa Ltd vs
Oneanate Investments Pty Ltd (In Liquidation) 1998(1) SA 811
the salutary benefit of In duplum rule is that as it ordains that
interest has to stop when it equals unpaid capital this
rule is based
on public policy designed to protect borrowers from exploitation by
practical application of this rule has been shown not to exist in a
vacuum. Factors of relevant concern require it to be
discipline. At pages 827 J to 828 A Sulman J.A. succinctly deals with
a point of moment when generally addressing
himself to the question
of Capitalisation in this regard by saying
summons was served the interest element of the claim did not exceed
the amount of the outstanding
capital and, for that simple reason,
the application of the rule did not arise at that stage. Because of
the delays in the litigation
the in duplum rule only became of
concern well into the life of the litigation. Because of this, a
number of subsidiary questions
arise. The first concerns
its head in response to the plea of in duplum. What the bank then
alleged was that, due to the practice of banks to capitalise
interest, interest once capitalised loses its character and becomes
capital. Therefore the in duplum rule cannot apply to overdraft
accounts. This practice, it was alleged, is long established,
and does not conflict with the positive law".
828 H - J the learned Judge went further to say and with his
"An examination of the bank statements in this matter reveals
simply that the compound interest was charged and added to the
previous balance. Plainly if the bank was entitled to capitalise
interest in the sense suggested by the plaintiff, namely, to regard
each charge of interest as going to increase the capital amount of
the debt, this would make serious inroads upon the in duplum
interest were to become capital the capital amount of the debt would
always be increasing and the bank would run no risk
of a lesser
capital amount being the subject-matter of the rule.
As correctly pointed out by Mr Rogers the practice of
'Capitalisation' of interest by bankers does not result in the
losing its character as such for the purposes of the in
duplum rule. Furthermore it lenders were entitled to employ the
of a book entry to convert what is interest into capital,
this would afford an easy way to avoid not only the in duplum rule
also the provisions of the Prescription Act and Usury Act 73 of
1968........When interest is compounded it remains interest".
The learned Judge cited with approval the words of Selikowitz J. :
"After considering the evidence and weighing the views of the
many eminent Judges referred to above, 1 conclude that there
basis for saying that the interest debited by a bank to an overdrawn
current account and added to the total amount outstanding
character as interest and becomes capital or anything else. The debit
balance shown in a customer's bank statement is
made up of separate
debits, each one of which has its own identity and origin. Some arise
from moneys lent and advanced, others
from the banker's service
charges or commissions, still others from taxes or even from the sale
to the customer of stationery such
as cheque or deposit books.
Lumping together all the amounts which are owed to the bank and which
remain unpaid does not change
their origin or their nature".
834 Sulman J.A. cautiously adds at letter C, after indicating that
the rule protects borrowers from exploitation by lenders
interest to accumulate, that:
"If that is so, I fail to see how a creditor, who has instituted
action can be said to exploit a debtor who, with the assistance
delays inherent in legal proceedings, keeps the creditor out of his
money. No principle of public policy is involved in providing
debtor with protection pendente lite against interest in excess of
the double. Since the rule as formulated by huber does not
public interest, I do not believe that we should consider ourselves
bound by it. A creditor can control the institution
of litigation and
can, by timeously instituting action, prevent the prejudice to the
debtor and the application of the rule. The
creditor, however, has no
control over delays caused by the litigation."
I am in
respectful agreement with the above passage. I am particularly
enamoured of the phrase no principle of public policy is
providing the debtor with protection pendente lite against interest
in excess of the double. I don't think any such
principle is involved
in the instant matter either. Summons was timeously issued in 1995
but delays for which plaintiff bears no
responsibility dogged this
matter and militated against its speed finality.
concluding I may just indicate that in his strenuous effort to strike
blows for the defendants in paragraph 8 of his heads
of arguments and
during addresses Mr Mhalane rightly pointed out that the plaintiff
bears the onus of proving its case on the balance
However elaborating on the rationale on which the burden and standard
of proof are based he put a spanner in
the works by
that the Court, when finding for the plaintiff, should feel
comfortable, and convinced. There should not be a slight doubt
(sic) injustice is done. (Emphasis laid).
standard of proof to meet which there should not be a slight doubt is
one required in criminal proceedings. The matter being
here is a civil one in which the plaintiff is required only to
discharge the onus on a balance of probabilities which
is a lower
standard. It would therefore be wrong and unconscionable to subject
the plaintiff to meet and satisfy a higher and more
standard than one imposed by land.
conclusion therefore I find for the plaintiff and do order as follows
1. As against the 1st defendant 'Malerotholi Sekhonyana (in her
1.1. Payment of the sum of M1 847 122-44
1.2. Interest on the sum of Ml 847 122-44 at the rate of 18.5% per
annum from 29th January 1995 to date of payment.
2. As against the 1st defendant 'Malerotholi Sekhonyana
2.1. Judgment is entered in the sum of M1. Million
2.2. Interest on the sum of Ml. Million at the rate of 18.5% per
annum From 29th January 1995 to date of payment
2.3 An order is made declaring executable the property situate at
Lower Moyeni, Quthing Urban Area, in the Quthing District.
3. As against the 2nd Defendant 'Masenate Mopeli
3.1 Judgment is entered in the sum of Ml 200 000-00
3.2 Interest on the sum of Ml 200 000-00 at the rate of 18.5% per
annum from 29th January 1995 to date of payment.
3.3 an order is made declaring executable the property situate at
Plot No. 12281 -008 Maseru West, Maseru Urban Area, in the District
4. The defendants are held jointly and severally liable the one
paying the other to be absolved.
5. The plaintiff is awarded costs of suit.
Plaintiff: Mr Hoffman, S.C.
Defendants : Mr Mphalane
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