IN THE HIGH COURT OF LESOTHO
In the matter of:
BARCLAYS BANK PLC Plaintiff
vs TABIRITH CONSULTANCY (PTY) LTD Defendant
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
on an overdraft, The defendant entered an Appearance to
defend and the Plaintiff applied for a Summary Judgment. The
was dismissed on the ground that on plaintiff's version
of the agreement demand is a condition precedent to its cause of
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
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
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
conference reads as follows "the plaintiffs have
decided that there is no further purpose in continuing with the claim
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
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plaintiff has in fact withdrawn the proceedings and is bound to pay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
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
with the submission that the plaintiff has withdrawn its
action. By repaying the overdraft the defendant made it unnecessary
the plaintiff to continue
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
the merits thoroughly canvassed who would have been a
successful party? It stands to reason that I must go into the merits
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
are at stake. No doubt this is sometimes unavoidable, as,
for instance, where cases are settled on the meritswithout an
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
contention that there was no express or.tacit agreement
that the overdraft was to be repaid on demand. It contends that
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
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
until defendant on its own choice makes deposits to the credit of
The defendant does not allege that this was express
agreement between the parties but says that it arose out of the
them. I do not believe that a commercial bank like the
plaintiff would agree that its money should be held by a customer for
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
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
incurred from the 2nd August, 1985 to the 2nd September, 1985 when
the plaintiff demanded repayment. I agree with Levy, A.J.
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
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
of proving that there was an implied term of the agreement between
the parties that the overdraft, together with the interest
would be repaid to the plaintiff on demand.
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.
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