IN THE HIGH COURT OF LESOTHO
(Commercial Division)
CIV/T/707/2002
In the matter between:-
THE LIQUIDATOR LESOTHO BANK PLAINTIFF
And
THATO JOSEPH RANKOANE DEFENDANT
Date of Hearing : 7 April, 5 May, 6 July and 29 August, 2011
Date of Judgment : 29 August, 2011
CORAM : MR ACTING JUSTICE J.D. LYONS
Counsel:
Mr. Mabathoane for Plaintiff
Mr. Chobokoane for Defendant
JUDGMENT
Summary:
Credibility – court can draw adverse interest if available evidence favourable to a party is not presented by that party and there is no reasonable explanation for the lack of that evidence – rule in Jones v Dunkel applied – but caution must be applied and other evidence supporting the adverse inference must be present ( see: Gaskell v Denkas Building Services Pty Limited (2008) NSWCA 35)
LYONS J. (AGT)
The Plaintiff and Defendant entered into a loan agreement on 31 October 1996. The amount was M22,000. It was a short term loan. The interest rate was 22% per annum. The loan was to be repaid by two monthly installments, in November and December 1996. These monthly repayments were both to be in the sum of M11,039.55.
The Plaintiff’s claim is that no repayments were made and the defendant thus defaulted. Thus, together with compounded interest, the amount owing at 15 November 2002 (when the summons issued) was M45,207.33.
The summons was served. The defendant failed to appear. Judgment by default was taken and a writ of execution issued. This motivated the defendant to come to court. The default judgment was set aside on 28 August 2006.
The matter finally came to trial on 7 April 2011. During the trial I carefully observed the witnesses and their demeanor. Overall, where the evidence conflicted, I preferred the evidence of the plaintiff’s witnesses to that of the defendant.
The existence of the loan and its terms are common cause.
The Plaintiff’s witnesses gave evidences that the plaintiff bank originally had a manual records system. In 1983 this system was computerized. Again in 1997 a new upgrated computerized system was installed. This was done by having the staff manually enter in the existing records. This was completed sometime in 1998.
I accept the plaintiff’s assertion that the records of the bank are, on the balance of probabilities, generally reliable and accurate. There was no evidence to the contrary.
The defendant drew the court’s attention to para 5.2 of the loan agreement. That required the repayments to be made into account number 6516268615. The evidence led by the plaintiff regarding the documented record of the defendant’s account showed the account by the number 0110-061358-800. Counsel for the defendant submitted that this failure to properly identify the defendant’s account number as specified in the loan was evidence of poor record keeping and should raise an inference favourable to his client.
Mr. Sopeng, the plaintiff’s witness who worked with the plaintiff at the time, explained this. He explained that where a custormer like the defendant did not have a current account with the bank from which payments on the loan could be drawn and where that client (borrower) defaulted, a separate account number was allocated to record the default loan account activity. In instant case the defendant had a personal (savings) account. Due to problems caused with updating the client’s record (usually a passbook) the computer system did not utilize the savings (passbook) account to record loan repayments/activity. This was, as Mr. Sopeng explained, because the clients’ passbook and the bank’s computerized record often failed to correspond due to the client sometimes effecting a transaction without the passbook. Hence the practice was to allocate a separate account number to track the loan account activity. As the defendant was in default, a separate activity tracking account was given. This was no. 0110 – 061358-800.
I accept Mr. Sopeng’s explanation. Thus I reject the submission that the different account numbers should raise an inference adverse to the plaintiff. The difference was satisfactorily explained.
I find, therefore, that the loan existed; that the records of the plaintiff are , on balance, accurate and, consequently, that the plaintiff’s assertion that its records showed the defendant had not repaid the loan should be accepted.
Having reached those findings, it does not necessarily follow that any assertion to the contrary should be rejected out of hand. Whilst any system of data recording may appear to be working efficiently, it does not mean that, given the appropriate evidence, there are not specific instances where the system fails.
In instant case the defendant asserts that the system (as good as it may be) failed. He asserted in his evidence that he had paid the loan back.
The onus rested on the defendant to bring to court evidence that would, on the balance of probabilities, support his assertion.
The defendant said that in late 1996 he had obtained a contract with government for provision of a service. He did not elaborate on this. He needed short term funding to finance this government contract. He went to the bank and took out the loan for this purpose. His intention was to repay the loan by the two installments as this is how be projected he would be paid by government.
As it turned out government did not pay him in time to meet the November payment. However (so he said) the government came through in December. He said he took this cheque to the bank and repaid the loan with it.
Unfortunately, he said, his business records were destroyed in the 1998 riots when the building housing his office was destroyed by fire. These records included the bank receipt for repayment.
The defendant is a man learned in the law. He understands the need for corroborative evidence. Yet be provided none.
He was served with process in 2002. He went first to the offices of the liquidator of the plaintiff bank and then to the plaintiff’s attorney. He says he told them the loan was repaid. It seems that knowing his receipt was destroyed, he didn’t think to go to the government department concerned and get corroborative evidence of his dealings with it. It would have been highly likely that the very cheque he said he banked would have been returned to the department endorsed as paid – and with the account/banking details.
This is a very obvious source of corroborative evidence – none of which was forthcoming.
Had it been, for example, that the government department concerned had lost its records (given that this was in 2002, it is unlikely), that either he, by his own hand or by instructing his attorney, could have written to the department seeking the records. Then the reply could be put before the court.
None of this was done.
There was no evidence of this government contract or the payment-except from the defendant’s viva voce evidence. Yet such evidence would surely be available and quite readily brought to the court.
As a rule of evidence if a party fails to present reasonably available and favourable evidence in support of its case, (or fails to reasonably explain the absence of such evidence), the court is entitled to draw an adverse inference. (see: Jones v Dunkel (1959) 101CLR 298 and Gaskell v Denkas Building Services Pty Limited (2008) NSWCA 35.) However, just the absence of the favourable evidence of itself is insufficient to support the adverse inference. There must be evidence elsewhere to support the inference.
In this case the demeanor of the witness (the defendant) in giving his evidence was a concern. In cross-examination he appeared to me to be evasive, even raising his own objection as to relevance to an important question from the plaintiff’s counsel. What was of concern was that he tried to prevent the court hearing of his legal qualifications. These qualifications are important for it indicated that the defendant is a person acquanited with the court’s process and the need to present evidence in support of his case. It also suggests that he has the ‘know how’ as to how to gather that evidence.
The evidence that he failed to respond to service of the summons by entering an appearance but instead visited the liquidator and their attorneys to purportedly explain but left it on an uncertain basis of awaiting the attorneys call was, in any opinion, quite unsatisfactory for a legally trained person. The defendant as a legally trained graduate must have been well aware of the proper procedures to take once served with a summons. That he did not suggests he was trying to avoid the effect of the summons. In my view had he been as certain as he said he was that the had paid the loan, he would have been incensed at the temerity of the plaintiff and moved immediately and forcefully to defend his position.
The evidence that, as a legally trained person he appreciated the worth of corroborative evidence but did not move to obtain it is in my view, supportive of the inference that he had not in fact repaid the loan.
I was also concerned about the cedibility of the defendants evidence concerning his purported repayment. He said in his witness statement that he cannot remember the exact amount he repaid but it was about M24,000. This was difficult to reconcile with the documentary evidence that he was to repay two instalments of M11,039.55 (total M22,079.10) by December 1996. The defendant said he paid in December 1996 – on time save for the missed November payment. He gave no explanation for the apparent difference.
I was further dissuaded from accepting his evidence of repayment by the absence of detail of the supposed government contract. Whilst he said he had a very clear recollection of making the repayment, he appeared to have no precise recall of the details of the government contract. He neither produced this detail in his witness statement nor in his viva voce evidence, leading me to reject his assertion that there was a government contract, a government cheque and a loan repayment.
In instant case I am of the view that evidence of this government contract and payment of the cheque (including even the endorsement of the paid cheque) was most probably reasonably available. Further, if it was not available, no evidence was put before the court that any inquiry was made and that there was a reasonable explanation for the absence of the evidence.
Weighing all in the balance, I accept the plaintiff’s evidence and I disbelieve the defendant.
I order judgment for the plaintiff in the sum of M45, 207.27.
I award interest at 22% per annum from 15 November 2002 until payment .
I award costs to the plaintiff to be taxed if not agreed.
J.D. LYONS
JUDGE (AGT)
