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CIV/T/185/90

IN THE
HIGH COURT OF LESOTHO

In the
matter between:

STANDARD
CHARTERED BANK AFRICAN PLC Plaintiff

and

SIDWELL
MAKOA MOHLEKWA Defendant

JUDGMENT-

Delivered
by the Honourable Mr. Justice T. Monapathi Acting Judge on the 14th
day of April. 1994

On the
23rd February 1994 Mr. Fisher for the Plaintiff and Mr. Nathane for
the Defendant appeared before me. They advised that their
case was
such that there would be no need for viva voce evidence. They handed
in by consent certain items of correspondence and
that they wanted a
case stated and would argue accordingly on the following point;-

To
determine whether and to what extent Defendant is liable for interest
where:

1. Defendant
   says he is not liable for interest on the capital

   
   

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amount by reason of two tenders he allegedly made on the following
dates -

1. On
   the 20th March, 1992.
   

   
   

2. On
   the 28th August, 1993.

   
   

Defendant
says he is not obliged to pay interest on the capital sum from the
date of the tenders. The rate of interest is not in
dispute.

The twin
concepts of tender and compromise are involved in the determination
of this matter. This too we must state from the onset
by way fixing
the goal posts. It is however useful to say something about the
background of the matter.

The
Defendant was at all material times in the employ of the Plaintiff
until about the 12th August, 1991 when he was dismissed by
the
Plaintiff. It is common cause that in January 1987 the parties
entered into an oral agreement in terms of which Plaintiff lent
and
advanced to the Defendant from time to time an overdraft facility in
respect of a housing loan. Plaintiff later secured the
said loan by
way of registration of a deed of Hypothecation in favour of Plaintiff
in the the Deeds Registry in Maseru in about
the 1st June 1987. It
follows therefore that

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after
payment in full and final settlement this deed would have had to be
cancelled. It also follows that the cancellation would
take sometime
after the actual payment. At the time of his dismissal the Defendant
was owing to Plaintiff a certain amount of capital
and interest
thereon at a rate which is not disputed by the parties, We came to
know that the Defendant sought and indeed negotiated
a loan from his
new employer the Lesotho Building Finance Corporation (LBFC), who
also intended to register a Deed of Hypothecation
to secure its own
loan to Defendant. The loan was arranged in order to pay off the
capital sum and interest owed to the Plaintiff.
More will be said
about the amount of capital interest, the time and the condition upon
which this LBFC sought to pay the Plaintiff
on behalf of the
Defendant. This in return elicited a certain attitude from the
Plaintiff as to when and how much money it ought
to be paid
"properly" as it demanded.

For ease
of reference I have the correspondent handed in numbered as follows;

1. Letter
   of undertaking for LBFC to Plaintiff - dated 20th March 1992 -
   referred to as IDA,

   
   

2. Letter
   of statement of regret of still unpaid capital and interest from the
   Plaintiff to the Defendant -

   
   

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dated 27th March 1993 - referred to as IDB.

3. (c)
   Letter inquiring about release of Defendant's lease and endorsing
   that delay can only accumulate interest - from L, Pheko
   & Co.
   (Attorneys) to Harley & Morris (Attorneys) - dated 2nd April
   1993 - referred to as IDC.

   
   

3. (d)
   Copy of letter of undertaking "to pay the following amount
   M39,810.00 to Plaintiff" from LBFC referred to

   
   

as IDD.

3. Letter
   containing statements about summary judgment allegedly irregularly
   entered into referring to letter dated 2nd April 1993,
   It is only
   appropriated to reproduce these concerned portion in full thus;

   
   

"Your letter echos what we have indicated to you in writing on
many occasions in the past in particular our letter to you
dated the
11th of June 1992 our clients are ready, Willing and able to cede or
cancel the Mortgage Bond against receipt of a valid
guarantee from
the Lesotho Building Finance Corporation which covers our client's
position. We have prepared a draft guarantee
for yourselves in the
past and

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forwarded same to you for signature by the Lesotho building Finance
Corporation. We must however mention that the amount outstanding
is
the sum of M46 679 41 together with interest thereon at the rate of
25% per annum calculated from the 16th day of March 1992
to date of
repayment and costs of suit. Our clients do not accept the contents
of your client's Affidavit which alleged that an
amount of M6 000 00
odd is not covered by their bond should be dealt with separately. You
will of course understand that our clients
are not prepared to accept
anything less than the amount as set out in the Summons and if this
principle is accepted by your client
then movement will be made
towards settlement of this outstanding matter. We should respectfully
suggest that you table concrete
proposals in regard to the settlement
of the entire matter as set out in the Summons. Our clients are not
prepared to accept your
client's allegation that the amount of M39
810 00 is the full amount owing."

- dated 14th April 1993 - Referred to as IDE - from Harley and Morris
to L. Pheko & Co.

3. Letter
   in reply to a certain inquiry by Harley and Morris to the Plaintiff
   to Harley & Morris - dated

   
   

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23rd August 1993 referred to as IDF

3. Letter
   enclosing cheque in sum of M46,679.41. The cheque was from Lesotho
   Agricultural Development Bank. The letter was from L,
   Pheko &
   Co. to Harley & Morris - dated 28th August, 1993. The cheque was
   dated 24th August 1993 - referred to as IDG.

   
   

1. Letter
   acknowledging receipt of IDG - in which the cheque in IDG is
   rejected and offering in turn M6O,OO0.00 in settlement plus
   costs
   provided amount offered to be paid within 7 days - From Harley &
   Morris to L. Pheko & Co.

   
   

A
submission made by the Plaintiff reveals that at no time did the LBFC
on behalf of the Defendant put up a guarantee in which the
capital
sum owed would be paid up "together with interest to the time of
payment." This appears to be so when regard
is had to IDA which
undertakes "to remit to yourself the sum of M39,810.00 from the
proceeds of advances "as soon as
the mortgage documentation has
been completed and the bond registered in our favour" (my
underlining). This condition the
Plaintiff found to be most
unacceptable. It is clear that as at the date of IDB the debt had
risen to M46,679.41 "though the
application of interest up to
29th February, 1992." I find that it was not

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correct
that (as shown in IDC) the Defendant's Attorneys should seek to
persuade the Plaintiff to release Defendant's lease on the
strength
of the guarantee given by Lesotho Building Finance Corporation. I
believe that the Plaintiff would be entitled to reject
any offer
whether it be called a guarantee or not which spoke of liability to
pay M39.810.00 without a further guarantee of payment
of interest and
costs to date of payment from the 16th March 1992, In this I include
IDA and IDD.

It is
clear that as far as Plaintiff is concerned this request of having
the lease released and starting off with the procedures
for drawing
of bond documents and arranging for cancellation of the deed of
hypothecation, was never a problem on the side of the
Plaintiff,
hence IDE which I need to quote as follows: "We enclose,
herewith, a copy of our client's Bond together with a
copy of the
Lease in order that you may proceed with the drawing up of your Bond
in the interim. May we receive the usual guarantee?
We enclose,
herewith, a draft copy of the guarantee which would be acceptable to
our clients. What we suggest is that you draw
your Bond documents in
the meantime, and we shall also arrange for a consent to cancellation
from our clients. Once the Bond documents
have been drawn and the
guarantee provided to our clients, our two offices can liaise and the
transactions can be executed simultaneously
in the Deeds Office."
It is clear therefore that what the LBPC deemed to be

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a
condition ought not to have been so. The Plaintiff has always deemed
the forwarding of a sufficient guarantee to be the only necessary

condition. I make a finding that they were entitled to so demand:
Payment in full refers to an unconditional offer to pay the full
sum
owing forthwith or at leas without delay or postponement (see MACLEAN
vs HAAS BROEK 1956(2) SA 446 (0))

I would
have to look at IDG as being, a second "tender" that the
Defendant put forward. It speaks of a sum of M46,679,41,
This is the
sum of money or total calculation that seems to have been arrived as
at the 27th March 1992 (see IDB). As long as then.
This is one mark
about the IDG, This means that the sum was being offered about 17
months afterwards. This also means that if the
offer was acceptable
to the Plaintiff he would either be doing so in a belief that it is
all the capital and interest due or that
Plaintiff was foregoing all
interest that should accrue from the 29th February 1992. In the
latter event that would be an offer
to settle or to compromise. The
Plaintiff refused to accept the cheque offered and therefore did not
accept any of the two positions
stated above. The offer was not
accepted. In any event the onus would be on the Defendant to prove
that the offer was accepted.
Pursuant to the answer in refusal of the
Defendant's offer as shown in IDI Plaintiff however went on further
to offer to the Defendant
as shown in IDG.

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What is
the status of the Defendant's offer to pay as contained in IDA and
IDI and as referred to in Defendant's plea as specified
at paragraphs
3 and 4? It is on the two occasions that Defendant alleged that he
made tenders to pay in full and final settlement
and to that extend
he is only liable to capital and interest up to the 20th February
1992 and not afterwards, This should depend
on whether, properly
speaking, his offers of the 20th February 1992 and the 28th August,
1993 were tenders. The Plaintiff says
this overtures can best be
described as offers to settle or offers to compromise but not tenders
at all. This is correct. Plaintiff
was not bound to accept the
offers.

I observe
that while the Defendant's offer of the 24th August, 1993 can be
described as an offer to settle it can certainly not
be described as
a tender and payment into Court in terms of Rule 38 of the High Court
rules. The only effect of a tender in Defendant's
plea would only
protect Defendant against an order of costs (see De Beers v
Versebering Van SA BPK 1971 (3) SA 614(0). See also
Amlers Precedents
in pleadings 4th edition at pages 302-303. It needs to be repeated
that Plaintiff refused both offers as contained
in the Defendant's
plea and lastly in the letter of the 24th August 1993 (IDG). I am
persuaded that should the Plaintiff have accepted
payment of the
cheque and the offer contained in the Defendant's letter of the 24th
August 1993 that would amount to an acknowledgment
that he has been
paid in

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full
settlement (see Andy's Electrical vs Lourie Sykes 1979(3) SA 34(w).
Payment in full refers to an unconditional offer to pay
the full sum
owing, Payment must be of a thing due and something else cannot be
substituted without the consent of the Creditor.
A debtor may not pay
one thing for another against the will of his Creditor.

My
finding is finally that there is no good ground why the Defendant
shall not pay a sum of M46.679.41 plus interest reckoned from
the
date of the 20th March 1992 together with costs of suit.

T
MONAPATHI

Acting
Judge

For the
Plaintiff : Mr. Fisher

For the
Defendant : Mr, Nathane