CIV/T/586/85

IN THE
HIGH COURT OF LESOTHO

In the
matter of :

BARCLAYS
BANK P.L.C. Plaintiff

V

LEHLOHONOLO
KHOBOKO Defendant

JUDGMENT

Delivered
by the Hon. Acting Mr. Justice D.S. Levy on the 28th November. 1985.

Plaintiff
seeks provisional sentence on a second mortgage bond given as
security for overdraft facilities for payment of an amount
of
M15321.72 with interest thereon at the rate of 22% per annum from
23rd February 1985 to date of payment and costs and to have
the
mortgaged property declared executable.

The
mortgage bond specifies that the amount of indebtedness of the
Defendant at any time (including interest and the rate of interest)

shall be proved by a certificate signed by any manager of Plaintiff.

Attached
to the summons served upon the Defendant is a certificate of
Plaintiff's manager certifying the amount owing at M15321.72
as at
23rd February 1985.

At the
hearing a further certificate of Plaintiff's manager was handed in
certifying that the Defendant's indebtedness under the
mortgage bond
as at 26th November

2

1985
amounted to M18987.12.

The
Defendant has denied that demand was made upon him for repayment of
the amount owing to the Plaintiff and consequently that
the
Plaintiff's cause of action has not been completed. Defendant refers
to clause 5(1) of the mortgage bond which specifies that
all payments
in respect of any amount claimable at any time (under) the bond
whether of capital or interest shall be made on demand.

I do not
read this clause as specifying that demand is a condition precedent
to the Defendant's liability. The mortgage bond contains
an
unconditional acknowledgment of indebtedness in such amount as may be
certified by the Plaintiff's manager and in such a case
demand is not
necessary to complete the Plaintiff's cause of action. If it is,the
summons is a sufficient form of demand. See Ridley
v Marais 1939 AD
5.

In the
light of this finding I need not refer to the further matter that was
agreed between counsel for the parties at the hearing
and that is
that a previous summons had been issued by the Plaintiff against the
Defendant and claiming the same amount as is presently
claimed by the
Plaintiff in these proceedings. That summons, although subsequently
withdrawn, also constituted sufficient demand
upon the Defendant, if
so required, to complete Plaintiff's cause of action.

The
further point taken by the Defendant is that the mortgage bond and
the certificate of the manager do not make the mortgage bond
a liquid
document sufficient for purposes of provisional sentence
notwithstanding the

3

agreement
expressed in the mortgage bond that such certificate shall be valid
as a liquid document against the Defendant for the
purposes of
obtaining provisional sentence.

I need
not canvass the various decisions of the Supreme Court of South
Africa, stretching as they do over nearly a century of law
reporting,
which deal with what once was a contentious point of law in actions
for provisional sentence on mortgage bonds and such
like instruments
of debt, culminating, so it then seemed, in the decision of Bro Trust
Finance (Pty) Ltd v Pieters 1973(3) S.A.
520T when a certificate of
present indebtedness such as of the bank manager in casu, was
regarded as lending sufficient liquidity
to the document in question
for the purposes of provisional sentence if relied upon by the
Plaintiff and if attached to and served
with the summons for
provisional sentence.

However,
in the most recent decision on this vexed question of liquidity the
previous series of decisions on this question have
been reversed and
the law definitively re-stated in Wallach v Barclays National Bank
Ltd 1983(2) S.A. 543 (A).

In this
case the document in question was a mortgage bond for a fixed amount
and with provisions virtually identical to the provisions
of the
mortgage bond in casu, that is, that the indebtedness of the
Defendant at date of execution was unstated, that the bond
was
intended entirely to secure future advances by way of the overdraft
and other facilities to be granted the Plaintiff at its
sole
descretion, that the certificate of the manager was

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to be the
sole arbiter of the indebtedness at any specific time. Nor is there
any indication in the bond of any present indebtedness
at the date of
execution of the bond which might have restored its liquidity. See H
V D Investments (Pty) Ltd. v Neffke 1984(2)
S.A. 368(W).

As I have
said, a comparison of the passages of the bond described in Wollach's
case with the equivalent passages of the bond in
casu show that they
are identical save in minor respects which are irrelevant to the
point in issue. Nor is there anything in any
of the other paragraphs
of this bond which in any way add to its liquidity.

The
judgment of the Appellate Division (Holmes J.A. Diss) was that,
notwithstanding the certificate, the bond lacked sufficient
liquidity
for the purposes of provisional sentence and that action was, as is
this action, dismissed with costs.

D.S. LEVY

ACTING
JUDGE.

28th
November, 1985.

For
Plaintiff : Mr. Harley & Morris

For
Defendant : Mr. Mphalane.