CIV/T/2/1981
IN THE HIGH COURT OF LESOTHO
In the matter of:
CM. MASOABI & COMPANY Plaintiff
v
AHMED SURTIE     Defendant
JUDGMENT
Delivered by the Hon. Chief Justice, Mr. Justice
T.S. Cotran on 23rd February, 1981
This is a summons for provisional sentence on a cheque
dated 30th December 1980 (annexure A to the summons) in the sum
of M4000 drawn on Barclays Bank International Ltd. Maseru by the
defendant Mr. Ahmed Surtie in favour of the plaintiff Mr. CM.Masoabi
(an attorney of this Court) as payee.
The defendant opposes the grant of a provisional sentence
on grounds that will presently emerge.
What happened was this: The defendant Ahmed Surtie
(Mr. Surtie) had obtained from the Lesotho Development Bank(Lesotho
Bank) a loan, by way of overdraft facilities, secured by a
mortgage bond on property owned by Mr. Surtie. The overdraft
reached M123,000 and Lesotho Bank called for repayment. This was
not forthcoming. The Lesotho Bank then sued Mr. Surtie in
CIV/T/264/1979 to recover the sum. A plea in defence was filed
that the amount, or a part thereof, was not yet due. The Lesotho
Bank was represented by the plaintiff Mr. Masoabi, and Mr. Surtie
was represented by Mr. Franken of Messrs. Cooper and Sons.
A settlement was reached between the respective attorneys.
It will be described later suffice it now to say that the civil
case did not go to trial and the matter, with the consent of both
attorneys, was struck off the roll.
The out of Court settlement provided that Mr. Surtie should
settle his loan (then standing at about M100,000) to the Lesotho
Bank by means of 25 post dated cheques, payable monthly at the
end thereof, commencing from 30th September 1980, to Mr. Masoabi &
Co. as the Lesotho Bank's attorneys. This was done.
On 30th September 1960, the 30th October 1980, and 1st
/December 1980

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December 1980 Mr. Masoabi deposited, or caused to be deposited,
the three cheques in his trust account at Barclays Bank International
Maseru hereinafter referred to as Barclays(annexures R, S and T of
the replying affidavit). Mr. Masoabi avers that he had given
Barclays instructions to transfer to Lesotho Bank the value of
Mr. Surtie's cheques as soon as they were cleared and placed into
his trust account.
The fact of the matter however is that Barclays did not
do so. Mr. Masoabi says it was partly due to Barclays itself,
through either inefficiency or misunderstanding, and partly due
to the fact that Mr. Surtie crossed the cheques. Mr. Masoabi adds
that he had given Barclays a "stop order" to pay the amount to
Lesotho Bank but Barclays had placed the proceeds in an account
called "uncleared effects" instead. There is no affidavit from
Barclays in the papers.
On or about the 5th December 1980 Mr. Surtie discovered
that Barclays had debited his account with the value of the cheques
(total M12,000) on the relevant dates when they were presented
but also discovered that Lesotho Bank had not credited him with
the amounts of the cheques except to the extent of M3000. Lesotho
Bank in the meantime were charging Mr. Surtie interest on his
overdrawn account with them. The interest on the unpaid money
(M9000), according to Mr. Franken from the bar, amounted to some
M400 or M450 which Mr. Surtie could ill-afford to lose. Mr.Surtie
was perturbed. He contacted his attorney Mr. Franken. Mr. Franken,
it is clear from his affidavit, was also perturbed, and he in
turn contacted Mr. Masoabi who promised to investigate. He later
(8th December 1980) wrote to say that if Mr. Franken's client
would "obtain an up-to-date statement from Lesotho Bank" he would
discover that all the M12,000 have now been credited to Mr. Surtie.
Mr. Masoabi admitted there was "a slight omission" in his office
in forwarding "all the paid amount prompt" (annexure C of the
opposing affidavit).
Mr. Surtie was not apparently satisfied. He instructed
Mr. Franken to write to Mr. Masoabi and to Lesotho Bank that he
was forwarding directly to Lesotho Bank new cheques (payable on
the dates as previously agreed) made out to Lesotho Bank as payees
and was stopping all the cheques given to Mr. Masoabi. This was
on the 29th December 1980. In both letters Mr. Franken claimed
that this was done because of interest being charged to Mr.Surtie's
account at Lesotho Bank(annexures D and E of the opposing
/affidavit).

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affidavit).
The December 1980 cheque was due on the following day the
30th December. In this last instance, Mr. Masoabi did not deposit
the cheque in his Barclays Bank Trust Account, but passed the cheque
to Lesotho Bank after endorsing it as follows
"Pay Lesotho Development Bank Account No.020399"
(Sgd) CM. Masoabi
There is no evidence who is the owner of account No. 020399
at Lesotho Bank. The cheque was dishonoured and it is now the
subject of Mr. Masoabi's provisional sentence claim.
Mr. Masoabi says he is both the payee and the holder of the
cheque, Mr. Franken submits that he is no longer the holder by
reason of the fact that Mr. Masoabi had endorsed it to Lesotho Bank.
Mr. Masoabi(Mr. Franken adds) has no longer any locus standi unless
the endorsement was cancelled. He quoted de Klerk v. Stapelton
(EDMS)BPK 1974(3) S.A. 131 and other cases cited by the learned
Judge in course of his Judgment. It is in Afrikaans but is
available in my library in a translation undertaken by Juta and
Butterworths the publishers. It would appear that Gardiner JP in
Odes v. O'Kennedy 1931 CPD 415 at 416 thought that if the payee is
in physical possession of the cheque or the note though he had
endorsed it to a third party, he can nevertheless be a "holder".
This view was departed from in a number of cases subsequently e.g.
Holford v. Mentis 1938 WLD 239 at 242-243 and Round v. Klopper
1957(4) S.A. 688 at 689, and de Klerks case supra. I do not think
however that Gardiner JP's argument is devoid of merit. There is
support for it for example in a Judgment by Trollip J in Abraham
v. du Plessis 1962(3) S.A. 162 at 167. Gardiner JP was seised of
the case by way of an appeal from an action in the magistrate's
court where evidence was heard which presumably established that
the plaintiff was the true owner despite the endorsement. Abraham
v. du Plessis, supra, was,it should be noted, a summons for
provisional sentence, but the affidavits did establish that the
plaintiff was the true owner (and holder) and provisional sentence
was granted. As stated by the learned editors of Cowen on the Law
of Negotiable Instruments in South Africa 4th Ed. (1966) at p.253,
"the decisions are not uniform where the plaintiff in possession
of the instrument, though not the special endorsee, was the
original payee or prior endorsee". The facts on the affidavits
before me, however, bring the case closer to Holford v. Mentis and
Round v.Klopper and de Klerk's case than Odes v. O'Kennedy and
/Abraham

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Abraham v. du Plessis, supra. In the first place there is no
cancellation of the endorsement by Lesotho Bank on the face of the
cheque, in the second place there is nothing in the affidavit of
Mr. Masoabi to show that there was a cancellation, and it is now
clear from the affidavits as a whole that Mr. Masoabi is not the
"true owner" of the money subject matter of the cheque. There is
thus grave doubt about its liquidity and he cannot succeed in
provisional sentence proceedings.
Mr. Masoabi complains that Mr. Surtie and Mr. Pranken, by
unilaterally by passing him in this way, have cast grave aspersions
on his professional integrity. Lesotho Bank, he says, do not wish
to deal with Mr. Surtie's cheques or even "to see his face" since so
many of his cheques have bounced. There is however no affidavits
from Lesotho Bank to this effect. Mr. Masoabi also says that
Mr. Surtie and Mr. Franken reneged on their agreement with him.
This may be so, but there is no evidence that Lesotho Bank had
rejected Mr. Surtie's substituted cheques made out directly to them
as payees. Indeed it seems they have cashed the 30th December 1980
cheque made out to them. If Mr. Masoabi feels he has a cause of
action against Mr. Pranken or Mr Surtie about the way they treated
him that would be a different matter entirely and he is free to
pursue whatever remedy is open to him in the courts, or alternatively
take the matter up with the Law Society.
The summons is dismissed with costs. I am not satisfied
that this is a case where costs should be awarded on attorney and
clients basis.
CHIEF JUSTICE
23rd February, 1981
For Plaintiff : In Person
For Defendant : Mr. Franken