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Trans Lobatse (Pty) Ltd v Marsh and Others (Civil Appeal No. 22 of 1995) [1997] BWCA 23; [1997] B.L.R. 77 (CA) (28 January 1997)

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IN THE COURT OF APPEAL FOR THE REPUBLIC OF BOTSWANA
CIVEL APPEAL NO. 22/95
HIGH COURT MISCELLANEOUS APPLICATION NO. 10/95
HIGH COURT MISCA NO. 109/95
In the matter between:
TRANS LOBATSE (PTY) LTD  Appellant

and
RONALD NOBLE MARSH
YOGESH MAHAJAN
TSWELELO SUPERMARKET (PTY) LTD
S&M ASSOCIATES (PTY) LTD
1st Respondent 2nd Respondent 3rd Respondent 4th Respondent

And in the matter:

YOGESH MAHAJAN   Appellant
and
1st Respondent 2nd Respondent 3rd Respondent 4th Respondent
TRANS LOBATSE (PTY) LTD RONALD NOBLE MARSH TSWELELO SUPERMARKET (PTY) LTD S&M ASSOCIATES (PTY) LTD
Advocate Ziman for the Appellant
Mr. Attorney Monthe for the 1st Respondent
Advocate Willis (with him Mr. Attorney Mawere) for the 2nd Respondent
JUDGM ENT

2
CORAM;   AGUDA JA
STEYN JA TEBBUTT JA
TEBBUTT JA:
Two appeals came before this Court in its session in July 1996. In both of them the appellant's heads of argument were not filed timeously in terms of the Court of Appeal Rules and appellant's counsel found himself obliged to seek a postponement to the present session of this Court in order to comply properly with the Rules. The Court agreed to that, appellant having consented to pay the wasted costs debonis propriis. At the same time another aspect arose to which I must refer in some detail.
In their heads of argument the first and second respondents took the point that the appeals in each instance concerned matters of an interlocutory nature and that therefore, in terms of the relevant sections of the Court of Appeal Act, the leave of the Courts a quo to appeal to this court was necessary. This had not been sought by the appellant in either instance. While not conceding that the respondents' contentions were correct, Counsel for the appellant decided that ex abundante cautela he should seek such leave and that, as the matters were being postponed anyway, he would bring his applications for leave to appeal during the period of postponement. The judgments in the two matters had been given by Acting Judges viz Lesetedi AJ and Gaefele AJ. who were then no longer on the Bench and as a result

3
the applications came before Barrinaton-Jones J. who inexplicably struck them from the roll because he said that they had already been enrolled before the Court of Appeal. An application that the matters be re-instated was heard and granted by Dibotelo AJ. As a result, the applications for leave to appeal again came before the High Court, once more before Barrinaton-Jones J, who refused them without giving reasons for doing so.
The matters have again come before this Court in its present session. The appellant has brought an appeal against the refusal of Barrinaton-Jones J. to grant it leave to pursue the appeals in the Court. In the alternative, appellant seeks the leave of this Court to pursue them. When the matters were called Counsel for both first and second respondents intimated that they would not oppose such leave being granted nor would they raise any other procedural points which might delay the hearing of the appeals on their merits. This Court accordingly proceeded to hear the two appeals and the applications for leave to appeal together.
I shall deal the ambit of each one after I have set out the salient facts. Furthermore, to avoid the confusion which may otherwise occur were I to refer to the parties in their litigious capacities (e.g. Appellant, First Respondent and so forth), I shall for convenience sake refer to the respondents where appropriate, by their surnames i.e. Marsh and Mahajan, to the

4
appellant, Trans Lobatse (Pty) Ltd, as "Trans Lobatse" and to Tswelelo Supermarket (Pty) Ltd as "the company" or where relevant to do so as "Tswelelo Supermarket". It is also convenient to record at this stage that the fourth respondent i.e. S. M. Associates (Pty) Ltd is merely cited as a respondent because one of its employees was the Deputy Sheriff who had to execute the writ of execution to which I shall refer in due course. It does not otherwise feature in these appeals and I shall therefore say no more about it. There was also no appearance before this Court by or on behalf of third respondent.
The facts leading up to these appeals are the following: Trans Lobatse is the holder of two cheques, one dated 23rd September 1994 for P15 000.00 and one dated 15th October 1994 for P5 770.91 drawn on account number 097 060 694 650 with the Standard Chartered Bank, Jwaneng. The account number is printed by the Bank on the cheques. It also printed above the account number the words "Tswelelo Supermarket." The words are printed, not rubber stamped. Both cheques are signed by Marsh and Mahajan, Marsh also printing in ink his name above his signature. Both cheques were presented for payment but were dishonoured by the Bank, the first being endorsed "Refer to Drawer" and the second "A/C stopped 19/10/94." On 30 March 1995 Trans Lobatse issued a provisional sentence summons in terms of Order 14 of the Rules of the High Court for an amount of P20 770.91 (i.e. the total of the two cheques) citing as first, second and third

5 defendants respectively Marsh, Mahajan and "Tswelelo Supermarket, a firm carrying on business as such at Gaborone and Jwaneng."

Marsh entered an appearance to defend. Mahajan and Tswelelo Supermarket did not.
In his affidavit in opposition to the granting of provisional sentence filed in terms of Order 14(5), Marsh said that he only signed the cheques in his capacity as "a director of a company known as Tswelelo Supermarket (Pty) Ltd", which was incorporated on 21 April 1993. The name "Tswelelo Supermarket" on the cheques, he said, was an error, put there by the Bank. The Bank had printed and supplied the cheques to the company and it was the Bank that had left out the words "(Pty) Ltd." He added that "I genuinely believe that the cheque forms are computer generated and further that the account number on the cheques aforesaid are those of the customer company being Tswelelo Supermarket (Proprietary) Limited." He accordingly averred that neither he nor Mahajan were personally liable for the debts of the company. He said further that at all times Trans Lobatse knew it was dealing with a company and not with any individuals. All invoices, he said, were directed to "Tswelelo Supermarket" and not Mahajan or him. It was, he averred, the intention of all the parties that the company i.e. Tswelelo Supermarket (Pty) Ltd would be liable, as the goods for which the cheques were issued were supplied to the company and not to him. He submitted

further that if there was no indication that he and Mahajan had signed the cheques as directors and agents of the company, they had committed an error and were entitled to have such error rectified by clearly indicating that they signed the cheques as agents of the company. He also submitted that he and Mahajan should have been given notice of dishonour. As this had not happened, the summons was defective and should be set aside.
The application for provisional sentence came before Lesetedi AJ.
who refused to grant it against Marsh and Mahajan. He however,
granted provisional sentence against "Tswelelo Supermarket",
which was cited as third respondent. Relying on the decision in
the Appellate Division of South Africa of MARSHALL AND ANOTHER
VS BULL QUIP (PTY) LTD 1983(1) SA(23) (A), the learned Judge
held that on the averments of Marsh in his affidavit there was
a substantial probability that he would be able to establish a
defence of rectification and succeed in the principal case if
granted leave to defend. He then said the following:
"Provisional sentence against the 1st and 2nd Defendant is refused. The 1st Defendant to file his plea within 14 days from the date hereof. Costs shall be costs in the cause. Default judgment can be obtained against 2nd Defendant in terms of Order 30 of the Rules of the High Court. As there was no appearance in respect of the 3rd Defendant and its defence not being tied to that of the 1st Defendant, I hereby grant judgment against the 3rd Defendant in the sum of P20 770.91 together with interest thereon at the rate of 15% per annum, a tempora morae reckoned from the date of service of summons to date of payment and

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costs of suit." (my underlining) He did not make the statement that I have underlined part of his order. Lesetedi AJ's judgment was delivered on 5th June 1995. On 2nd August 1995 Trans Lobatse appealed against this judgment.
No doubt encouraged and spurred on by the learned Judge's remarks about default judgment, Trans Lobatse on 16 June 1995, in terms of Order 30 of the High Court Rules, applied for and obtained default judgment against Mahajan in the sum of P20 770.91, with interest a tempore morae. On the same day it obtained a writ of execution in respect of that amount pursuant to which on 3 July 1995 certain of Mahajan's goods were attached.
On 11 July 1995 Mahajan applied for an order setting aside the default judgment, the writ of execution and attachment and for an order that he be granted leave to defend Trans Lobatse's claim. He also sought leave to file a plea. That application came before Gaefele AJ. On 9 November 1995 he granted the relief claimed. He did so on the basis that there was a procedural flaw in the granting of the default judgment which was the following. No separate summons had been issued or served on Mahajan in respect of the application for default judgment. Trans Lobatse had relied in that application on the provisional sentence summons. It was not competent, so held Gaefele AJ, to obtain default judgment on a provisional sentence summons. The procedure for obtaining provisional sentence is entirely

8
different from that for obtaining default judgment. The latter must be founded on a writ of summons to commence action in terms of Rule 6 of the Rules of the High Court to which no entry of appearance to defend has been made. The learned Judge did not go into the merits of the matter i.e. as to whether there was a reasonable explanation for Mahajan's default or whether he had a bona fide defence. He, however granted Mahajan leave to file a plea within 14 days of his judgment.
That judgment is the subject of the second of these appeals but only as to the granting to Mahajan of leave to file a plea. Appellant accepts that default judgment should not have been granted on the provisional sentence summons and that Gaefele AJ. was correct in rescinding it.
The appellants' contention in the first appeal is that Lesetedi AJ. was incorrect in refusing to grant provisional sentence in the case of both Marsh and Mahajan and particularly in the case of the latter. It will be recalled that Mahajan did not enter appearance to defend Trans Lobatse's application for provisional sentence. Order 14(5) provides that a defendant in provisional sentence proceedings may appear personally or by Counsel to admit or deny his liability. Should he deny it he may file an affidavit setting forth the grounds upon which he disputes liability. Mahajan did neither. Accordingly, so it was contended, even if Marsh was entitled to a refusal of provisional

9
sentence, Mahajan was not, by reason of his failure to take any of the steps that I have just set out.
Provisional sentence is an extraordinary remedy designed to enable a creditor who has liquid proof of his claim to obtain a speedy judgment therefor without resorting to the more expensive and dilatory machinery of an illiquid action, (See ERASMUS: SUPERIOR COURT PRACTICE Bl-62; BARCLAYS NATIONAL BANK LTD V SERFONNTEIN 1981(3) SA 244 (W) AT 249 H. Although the latter and other authorities to which I shall refer are South African authorities they apply equally to Botswana where Order 14 is in similar terms to Rule 8 of the South African Rules of Court).
The theory behind it is that the Court is provisionally satisfied that the creditor will succeed in the principal suit (ERASMUS OP. CIT Bl-63) . The Court has a discretion whether to grant provisional sentence or not and it is quite entitled not to exercise its discretion in favour of a plaintiff seeking provisional sentence if it is not provisionally satisfied that he will succeed in the principal suit, whether the defendant seeks to defend the application or not. This may occur ex facie the document sued on or for any other reason. The fact that the defendant has not sought to defend the application does not entitle the Court to grant the application automatically. It does not necessarily mean that in every such case he admits his liability. He may choose not to do so for a variety of reasons

10
e.g. that he is aware that the claim is not a liquid one and that provisional sentence will not be granted on it. (See:- AARWATER (EDMS) BPK V VENTER 1982(3) SA 974(T) 976(E)). His mere failure to enter appearance to defend or to comply with the provisions of Order 14(5) does not relieve the court from being provisionally satisfied that the plaintiff will succeed in the principal suit. His title must be clear and specific (See: COETZEE AND SOLOMON REAL ESTATE V TEXEIRA 1970(1) SA 94(D) AT 96, NAVIDAS V ESSOP: METHA V ESSOP 1994(4) SA 141(A) AT 154(B). In the present case, the learned Judge knew that Marsh was contesting his personal liability on the cheques and had stated that for the same reasons advanced by him, Mahajan was not liable on them either. While it is true that Mahajan did not specifically associate himself with Marsh's averments, the learned Judge knew that the appellant's success in the principal suit was being challenged. This challenge was inter alia directed at the alleged unequivocal nature of the admission of personal liability on the face of what appears on the cheque. He also obviously considered, from his remark that third respondent's defence was not tied to that of Marsh, that in deciding whether to refuse provisional sentence against Mahajan, a similar challenge to Marsh's arose in his case. I can therefore not fault him in his exercise of his discretion not to grant provisional sentence against Mahajan, even though the latter did not take any of the steps provided for in Order 14(5). Appellant's appeal against the judgment of Lesetedi AJ. on his

11
ground cannot therefore succeed.
The question, however, remains whether the learned Judge was correct in refusing provisional sentence against either Marsh or Mahajan. Should he not have granted it against both of them? Appellant contends that he should have done so. Mr. Ziman for the appellant correctly submitted that in order to escape liability for provisional sentence on a liquid document such as the cheques in the present case a defendant must satisfy the Court on a preponderance of probability that it is unlikely that the plaintiff will succeed in the principal case (See:- DICKINSON V SOUTH AFRICA GENERAL ELECTRIC CO. (PTY) LTD 1973(2) SA 620(A) AT 630 F-G; SYFRETS MORTGAGE NOMINEES LTD V CAPE ST. FRANCIS HOTELS (PTY) LTD 1991(3) SA 276 (SECLD) AT 286 C-F). This onus can only be discharged on facts raised on affidavit and not on inferences from the facts (INTER - UNION FINANCE LTD V FRANSKRAALSTRAND (EDMS) BPK AND OTHERS 1965 (4) SA 180 (W) AT 192; SYFRETS MORTGAGE NOMINEES CASE LOC. CIT).
In his affidavit Marsh, in various of the paragraphs, uses the words "I state" in regard to the averments therein. In others he uses the words "I submit". These, so Mr. Ziman argued, represent inferences from the facts and not facts. I do not think Mr. Ziman is correct. It seems to me that Marsh, or whoever drew his affidavit, used the words interchangeably. There is accordingly nothing in the point raised by Mr. Ziman.

12
It is in my view clear when one reads the paragraphs in which he uses the words "I submit" that what Marsh is in fact doing is stating facts and not making submissions. It is on those facts that this Court must decide if Marsh and Mahajan have discharged the onus resting on them.
From the facts it is clear that their defences are that they signed the cheques as directors or agents of the company and did not incur personal liability on them or alternatively that it was the common knowledge of the parties that the cheques were those of the company and that they signed them on behalf of the company and not in their personal capacities. Their not qualifying their signatures to reflect this represented a common error, which they were entitled to have rectified.
It is, of course, undisputed that neither Marsh nor Mahajan qualified his signature by indicating that he was signing in a representative capacity or by procuration of the company. Mr. Ziman accordingly founded his argument on the premise that Marsh and Mahajan were, in those circumstances, personally liable on the cheques and that no evidence would be admissible to show that they signed as agents. It would, so he submitted, offend against the parol evidence rule. In support of this submission Mr. Ziman relied upon the decisions in a number of South African cases viz VON ZIEGLER AND ANOTHER V SUPERIOR FURNITURE MANUFACTURERS (PTY) LTD 1962(3) SA 399 (T); DICKINSON V SA GENERAL ELECTRIC

13
CO. CASE SUPRA; MARSHALL AND ANOTHER V BULL QUIP (PTY) LTD SUPRA AT 28 A-C; AND AKASIA FINANCE V DA SOUZA 1993(2) SA 337(W).
In Marshall' s case loc. cit Corbett JA. (as he then was) said:
"There is a long line of Provincial Division decisions to the effect that in general a person who signs a cheque as drawer without qualifying his signature so as to indicate, ex facie the cheque itself, that he signs merely in a representative capacity, incurs personal liability on the cheque and that extrinsic evidence designed to show that the signatory acted only in a representative capacity is not admissible. These decisions constitute applications of a general rule to this effect which governs the position of drawers and acceptors of bills of exchange and makers of promissory notes. (See:- generally BED IT PROPERTIES (PTY) LTD V CHARCHAT 1962(2) SA 118(E); VON ZIEGLER AND ANOTHER V SUPERIOR FURNITURE MANUFACTURERS (PTY) LTD 1962(3) SA 399(T); TRUST BANK OF AFRICA LTD V ST. IVES TRADING CO. (PTY) LTD 1982(2) SA 638(D); and the relevant cases cited in these judgments."
The basis for many of the latter South African decisions was the
judgment of Trollip and Cillie JJ in VON ZIEGLER's case supra.
Prior to that decision there had been a conflict among South
African Courts as to whether the parol evidence rule excluded
evidence that the drawer of a cheque, who signed it without any
qualification of his signature, had done so in a representative
capacity. From one line of cases followed by Millin J. in MOON
& CO. LTD EUREKA STORES (PTY) LTD AND OTHERS 1949(4) SA
40(T). he stated that,
"It is, on the other hand well established that a person who signs a negotiable instrument apparently as a principal is not permitted to contend that to the

14
knowledge of the party suing him he intended to sign as an agent; for this would be to contradict the terms of the document."
From other cases referred to by Marais J in INDUSTRIAL FINANCE AND TRUST CO. fPTY) LTD V HEITNER AND ANOTHER 1961(1) SA
516 (m . the latter said at P518 D-E that it was;
"at least open to doubt          whether any such rule,
if it does exist, may be said to be well established."
He concluded at P521 E-H that;
"I can see no valid objection to the admission of evidence to prove as against the payee, the existence of an agreement or understanding (that the drawer was doing so as an agent)."
Trollip J, in VON ZIEGLER's case exhaustively reviewed the parol
evidence rule and the numerous cases prior to 1962 dealing with
its application to contracts and to negotiable instruments, which
are of course contracts required to be in writing and signed by
the parties, and at P408 A-B said the following:-
"But parol evidence, not to define, but actually to negative or obliterate completely the liability of a party who has signed the instrument is a totally different thing. The object of such evidence is to induce the Court to regard his signature as virtually pro non scripto. That is what an agent in effect seeks to do when he proffers parol evidence that he signed the instrument as an agent and not as principal. That would directly contradict the express terms of the instrument as signed by him. The authorities relied on by Marais J, do not sanction that, and the authorities I have referred to in this judgment say categorically that that is not permissible."
The parol evidence rule which is to exclude evidence to
contradict, add to, alter or vary a contract which has been
reduced to writing, such writing being regarded as the exclusive

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memorial of the transaction, has been regarded by the South African Courts for well over 60 years as a rule of evidence and not of substantive law and those courts have consequently followed English precedents in regard to it, considering it to be part of the English law of evidence rather than of the Roman-Dutch common law (See:- CASSIM V STANDARD BANK OF SOUTH AFRICA LTD 1930 AD 366 AT 368; UNION GOVERNMENT V VIANINI FERRO -CONCRETE PIPES (PTY) LTD 1941 AD 43 AT 47; VON ZIEGLER'S CASE SUPRA AT 403 B-F; HOFFMANN AND ZEFFERT: SOUTH AFRICAN LAW OF EVIDENCE 4TH EDITION P293) . I have not been able to find a Botswana decision dealing specifically with this question but it would seem that such a view should also find favour in this country.
As a rule of evidence, there are certain exceptions to it. One such would be ambiguity (See:- HOFFMANN AND ZEFFERT OP. CIT PP326-329; DELMAS MILLING CO. LTD V DU PLESSIS 1955(3) SA
447 (A) ) . Trollip J. also recognised this in the Von Ziealer's
case when he said at 404D:-
"If the terms of the written contract are ambiguous as to whether the party contracted as an agent or principal, then parol evidence might be admissible in terms of another exception to the general rule to resolve that ambiguity, but that is a different point which is irrelevant to the present inquiry."
It is now well settled in South Africa, following the Appellate
Division decision in that country in the Delmas Milling Co case
supra that evidence of surrounding circumstances may be led where

16
ex facie the contractual document in question there appears to be an ambiguity in it.
Although the decision in the Von Ziegler's case has been followed since in several South African cases, including AKASIA FINANCE V DA SONZA Supra, a decision heavily relied upon by Mr. Ziman, the applicability of that decision and what it laid down has been questioned in a number of recent South African judgments. This trend it would seem, has been prompted by developments in modern banking practices, particularly in regard to cheques. The first occasion on which this questioning took place is to be found in the DICKINSON case referred to above. Sitting in the Transvaal Provincial Division of the South African Supreme Court, Nicholas J. had been confronted with the same problem with which this Court is now faced. There, too, a defendant had signed a cheque without qualifying his signature. The cheque was not his cheque. It had imprinted on it by the Bank the name of a company and an account number which was that of the account the company had with the Bank. The defendant had no account with the bank. The debt was not his debt. Holding himself bound by the authorities and in particular, the two Judge decision in the Von Ziecrler case, he was unable to free the defendant signatory from liability on the cheque. He was obviously unhappy about that result. Hoping therefore perhaps that a more equitable result could be achieved via a reconsideration of the matter by the Appellate Division, be granted the defendant leave to appeal to that Court. In his

17
judgment granting such leave Nicholas J. said:
"It is common knowledge that the cheque forms supplied to their customers, by banks which have adopted computerisation, have printed on them a name and a number. The name is that of the bank's customer in which the banking account is conducted, it is not, of course, a signature. The number is that by which the account is identified in the bank's records. Where, at any rate, a single signature is affixed to such a cheque, it may well be argued that , in the light of the circumstances to which I have just referred, that signature is intended to be and is to be interpreted as being the signature of the customer whose account it is. That may be so even where, as in the present case, the name of the customer as printed on the cheque is that of a company ('Boiler Plant and Services (Pty) Ltd') and the signature is the unqualified signature of a natural person ('Helen Dickinson').
Prima facie, when a person has signed a cheque form such as the present, he intends to write, and will be understood as writing, the signature of the customer of the bank whose name is printed on the cheque. If he intended to sign in his own person he would presumably strike out the printed name and number which appears on the cheque."
The Appellate Division chose, however, not to accept the
invitation of Nicholas J. In DICKINSON's case, as in the present
one, the defendant had also applied for rectification of the
cheque so as to qualify his signature on the ground that he had
signed the cheque without qualification in error and that it was
the common understanding of the parties that he had done so in
a representative capacity and not his personal one. Provisional
sentence had on that basis been refused. The Appellate Division
decided the appeal on that ground, finding that Nicholas J was
correct in refusing provisional sentence on that basis.

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In the course of his judgment, however, Jansen JA, who gave the
judgment of the Court, said this at P628H;
"In view of what will be said in regard to the other points, it is unnecessary to decide whether ex facie the cheques the appellant is clearly a drawer or not, or whether there is at least some ambiguity. It is, therefore, desirable to leave aside the controversies raging around the so-called composite signature of a company (cf. 1958 S.A.L.J. 189; 1961 S.A.L.J. 293; COWEN, LAW OF NEGOTIABLE INSTRUMENTS, 4TH ED., PP 148 ET SEQ.) The whole question may well require reconsideration in view of recent banking practice.
He then referred to the remarks of Nicholas J. and concluded:-
"In conjunction with this argument is raised that Section 24(1) of Act 34 of 1964 (the South African Banking Act) does not necessarily imply the converse viz that unless e.g. a drawer adds words to his signature indicating that he signs for or on behalf of a principal, or in a representative capacity, he is personally liable. But on these matters, as has been indicated, it is not necessary to express any final opinion."
The South African Appellate Division had another opportunity to
reconsider the whole question in Marshall's case supra, where the
facts were also on all fours with those in the present case.
Again it declined to do so. Once again however, it questioned
the validity of the earlier decisions in the light of modern
banking practice but chose not to come to any final conclusions.
In that case, too, a defence of rectification was raised in the
trial court but was not upheld, the court granting provisional
sentence. This was reversed on appeal. In the Appeal Court,
Counsel for the appellant also argued that a person who signs a
cheque form which is a company cheque imprinted by the Bank with
the company's name and account number, without qualifying his

19
signature, does not incur personal liability on it. Af
referring to the rule laid down in the earlier cases in
passage from his judgment that I have cited above, Corbett
went on to say this:-

"In the application of this rule problems have arisen in relation to cheques or other negotiable instruments, signed on behalf of a company, where both the name of the company, usually affixed to the cheque form by means of a rubber stamp, and the hand-written signature of the signatory appear in the appropriate space on the instrument. In such cases the general trend of the decisions has been that, unless the signatory has indicated in some way that he is signing for or on behalf of the company or in a representative capacity, he, the signatory, is personally liable on the instrument (See:- COWEN THE LAW OF NEGOTIABLE INSTRUMENTS IN SOUTH AFRICA 4TH ED AT 157 ET SEP) . In the event of the signatory becoming personally liable for this reason, the result may be that there are two signatures and two parties liable on the instrument: the company, by reason of the affixing of the company stamp by an authorized person (this being taken to constitute the signature of the company), and the signatory, by reason of his unqualified signature (See:-ASSOCIATED ENGINEERS CO. LTD V GOLDBLATT 1938 WLD 139; MOON AND CO. LTD V EUREKA STORES (PTY) LTD AND OTHERS 1949(4) SA 40(T). On the other hand, the company stamp and the handwritten signature of the person signing the instrument may be so associated as to constitute what has been termed a "composite signature", e.g. where the company's name and a description of the office held by the person signing are impressed with the same rubber stamp and this is completed by the handwritten signature of the person signing (See:- e.g. NICOLAIDES V HENWOOD, SON, SPUTTER AND COMPANY 1938 TPD 390; CARDBOARD PACKING UTILITIES (PTY) LTD V DELTA ASSOCIATES (PTY) LTD 1961(4) SA 551 (W) . In that event it is only the signature of the company and only the company is liable on the instrument. In every case it is a matter of construction of the instrument in question whether what has been placed on the instrument is the composite signature of the company or a qualified signature by a person signing on behalf of the company, in both of which cases the person signing is not personally liable, or is an unqualified signature, which renders a signatory personally liable, together

20
with (possibly) the separate signature of the company."
Corbett JA then also referred to the remarks of Nicholas J quoted above and concluded:
"In the present case appellant's counsel, not unnaturally, relied strongly upon the approach suggested by Nicholas J. in support of his argument that appellant did not incur personal liability on the cheque for R6 550. It seems to me, however, that before this Court could pronounce upon this issue it might require fuller information, in the form of admissible evidence, than is presently before it as to computerisation in banks and modern banking practices associated therewith. Be that as it may, I do not find it necessary to deal with this argument because, in my view, the defence based on rectification should have resulted in the trial court refusing provisional sentence."
The inequity that may result from precluding a defendant from
leading evidence of surrounding circumstances in a case such as
the present was also obviously apparent to Leveson J. who gave
the judgment in AKASIA FINANCE V DA SOUZA Supra. He also
considered that the whole question should be revisited in the
light of modern banking practice. The facts in that case were
again identical to those in the present one, the defendant
averring that he had signed a cheque imprinted with the name of
a company and the bank account of that company in a
representative capacity as an agent for the company even though
he had not qualified his signature to reflect that position. At
P339 D-I of the report of that case, Leveson J. said:
"On these facts it is contended for the defendant that at best for the plaintiff the company's name, supplemented by the two signatures, constitute the composite signature of the company and either that there is no personal responsibility on the cheques or

21
that they should be rectified so as to reflect that the defendant had signed them in a representative capacity. In this regard, it must be emphasised that the two persons signing below the company's name had done so without qualification. I have sympathy for the defendant's cause. The cheques are not his cheques. The bank account is not his account. The debt was not his debt. But he is to be saddled with personal liability because he did not qualify his signature, for on that basis he falls squarely within the terms of Section 24(1) of the Bills of Exchange Act 34 of 1964. The difficulty in his way is the countless number of cases in this country which have followed the English decision of LEADBITTER V FARROW (1816) 105 ER 1077. There Lord Ellenborough said at 1079:
'Is it not a universal rule that a man who puts his name to a bill of exchange thereby makes himself personally liable unless he states upon the face of the bill that he subscribes it for another or by procuration of another which are words of exclusion. Unless he says plainly 'I am the mere scribe' he becomes liable.'
Lord Ellenborough spoke nearly 200 years ago. He did
not know the techniques of electronic banking nor
could have foreseen that a company's name would be put
on a bill of exchange not by the company as a
signature, but as a means of identification of the
company's bank account by a computer-controlled
printing apparatus. It was these considerations that
compelled me to examine the cases with a view to
W-       determining whether they could not be reviewed in the
light of modern banking practices prevailing in the last decade of this century."
He then referred to DICKINSON'S case, to the remarks of Nicholas
J. and to the Appellate Division's approach to them and went on
to say (at P340 D-G)
"There were two possible routes open to the Appellate Division - to hold bluntly that the signature had been put on the instrument in a representative capacity in accordance with the evidence proffered or to allow the instrument to be rectified in accordance with the true intention of the parties. The Appellate Division chose the latter route, leaving the question open as

22
to whether the former could constitute a good defence. See in particular at 628H of the report and the comments of Jansen JA.
In the hope that I might have received guidance from the judgment in the Court of first instance, I requisitioned a copy of the judgment of Nicholas J. from the archives in Pretoria. It appears SUB NOMINE SA GENERAL ELECTRIC COMPANY (PTY) LTD V DICKINSON (WLD, 13 APRIL 1972, CASE NO. P261/71) . I find, however, as Nicholas J. found before me, that I am fully bound by a decision of two Judges in this Division in VON ZIEGLER AND ANOTHER V SUPERIOR FURNITURE MANUFACTURERS (PTY) LTD 1962(3) SA 399 (T) .
LEVESQN J. then cited what Trollip J. said in the latter case and
which I have quoted above and concluded thus:
"In the face of that statement of the law it does not lie with me to hold that the techniques employed by modern banks, considered in the light of the special circumstances of this case, release the defendant from the consequences of putting his own signature to the instrument. That matter would have to be raised elsewhere, perhaps in another forum."
It is undoubted that modern banking practices have brought about
considerable changes in regard to the use of cheques as a means
of effecting monetary payment to creditors in respect of
obligations incurred by debtors. Most of these have introduced
safeguards for both creditors and debtors with one another. For
example, the "clearing house system" followed by some of the
commercial banks with a view to the rapid processing and
collection of cheques has prevented the exploitation of delays
in so doing by unscrupulous traders. It is a product of
automation and computerisation. The advances in technology in
this field have, in many respects, eliminated what could
previously have given rise to dishonest practices in the signing

23
and issuing of cheques. As mentioned by Corbett J, in earlier times a rubber stamp was frequently used to affix the name of a company on a cheque. The rubber stamping of the company's name in this manner was taken to constitute the signature of the company. This could provide an escape route for dishonest persons to avoid personal liability on a cheque by rubber stamping a company's name on it and then claiming that they were signing as representatives of that company. That possibility and other similar ones may well have been what lay behind much of the thinking in the earlier judicial decisions. Where, however, as is the modern banking practice, the name of the company together with its account number at a bank, is imprinted by the bank on a cheque, a very different instrument is presented by the drawer to the payee.
It is for that reason that Kumleben J. in CHAMANI V ST IVES
TRADING CO supra, which Corbett JA refers in MARSHALL'S case,
when dealing with certain cases in which rubber stamps featured
on cheques, as distinct from the case before him where the Bank
had imprinted a company name on a cheque, said that he did not
consider the cases binding on him-
"Since the difference between the imprint on the
cheque in this case      and the rubber stamp
(which is deemed per se to be a signature) is in my view a significant one."
Unlike the previous position where the affixing of a company's
name on a cheque by means of a rubber stamp was construed as the

24
signature of the company the imprint of the company's name on the cheque by a bank could never be so (per KUMLEBEN J IN CHAMANI' S CASE supra). As pointed out by the learned Judge it would be startling to hold that the cheques in a cheque book imprinted with a company's name had been signed by it before they were issued to it.
Nicholas J. expressed the opinion that prima facie where a person has signed a cheque form, such as those in the present case, he intends to write, and will be understood as writing, the signature of the customer of the bank whose name is printed on the cheque. If he intended to sign in his own personal capacity he would, so opined Nicholas J., presumably strike out the printed name and number which appears on the cheque. That, of course, was an obiter expression of opinion by the learned Judge. I do not necessarily subscribe to all his views as he has expressed them such as those dealing with the striking from the cheque of the company and account number and I make no definite finding on them. However, the general approach suggested by Nicholas J. in matters such as the present commends itself to me. I do not intend to hold that in every such instance it is prima facie established that the signatory has signed as a representative of the company and that the onus would be on the payee of the cheque to prove otherwise. Where, however, a cheque form is imprinted by a bank with the name of a customer company of such bank and that company's account number with it, the

*
25
signature by a person of that cheque, even if unqualified, would in my view give rise to a situation where it is at least equivocal as to whether he intended to sign in a representative or in his personal capacity and that this would permit the leading of evidence to establish the true position. The onus would not shift to the payee; it would remain on the signatory but he would not be precluded by the parol evidence rule from adducing evidence of the surrounding circumstances in seeking to discharge that onus.
In the Von Ziecrler case Trollip J, after referring to the fact
that "the equitable defence of rectification" of contracts,
including negotiable instruments and the admissibility of
evidence in proof such defence, was well-established, went on to
say this (at P410 B-E)
"Any further curtailment of the parol evidence rule on equitable grounds might, I fear, tend to weaken the force of written contracts to the detriment of ordinary trade and commerce which is most undesirable (CF. HADIARIS V FREEMAN & FREEMAN, 1948(3) S.A. 720(W) AT PP. 726-7). In my view, therefore, if the parol evidence proffered to contradict the written contract cannot be brought within the strict limits set for rectification it should not be admitted, however strong the equities in favour thereof might be. This applies especially in the case of negotiable instruments. Our Courts have hitherto, notwithstanding the strong demand of the equities in the particular case, strictly and rigorously applied the parol evidence rule to such instruments (see:- for example, STIGLINGH V THERON. SUPRA AT PP. 1002 1006, 1007; CASSIEM V STANDARD BANK, SUPRA P 370) . It is necessary, I think, that there should be no relaxation in that strict approach lest the certainty of the express terms and the consequent value of such instruments in trade and commerce be in any way

*
I I
26
diminished." While the views expressed by the learned Judge as to the maintenance of standards in trade and commerce remain as valid today as they were then, I do not think that his expression that notwithstanding the strong demand of the equities in the particular case, a strict and rigorous application of the parol evidence rule was required in regard to negotiable instruments in the interests of trade and commerce can stand, in the light I . of modern banking practices. Trollip J placed reliance on what Lord Ellenborough said in LEADBITTER V FARROW in 1816. As remarked by Leves on J, that was nearly 200 years ago when the technology available in modern banking practices was not dreamed of. Banking practices when Trollip J. spoke were also vastly different from what they are today. The use of cheques in creditor - debtor relationships is now governed by safeguards and security provisions.
Vr Having regard thereto, I cannot subscribe to an apprach by the courts of this country - and particularly this Court - that an inequitable result to a litigant should be allowed to occur simply by the application of a rule of evidence precluding the admissibility of evidence which would have the effect of preventing such an inequity. That evidential rule has, in any event, not found universal favour. Wiamore on Evidence commented on the parol evidence rule thus
" 'Few things' wrote Professor Thayer, 'are darker

27
than this (rule) or fuller of subtle differences; ' and this condition of the law all members of the profession will concede."
HOFFMANN and ZEFFERT are equally critical of the rule saying that
the expression "parol evidence rule" shares with the Holy Roman
Empire the distinction of being misleading in all three of its
component parts.
The inequity of a rigorous application of the rule to the facts of a case such as the present has been clearly set out by Leveson J. I agree with him in what he has said. Such inequity should not be allowed to occur. The South African Appeal Court has so far declined to revisit the issue raised in the matters presently before this Court. This Court should, I feel, now do so in order to prevent an inequity of the sort referred to.
In a case such as the present, therefore, where a signatory to a cheque bearing the company's name and account number imprinted on it by the bank does so without qualifying his signature, there must at least be ambiguity ex facie the cheque as to whether he intended to assume personal liability or was signing in a representative capacity. That being so, I hold that evidence would be admissable to resolve that ambiguity.
I have not overlooked the provisions of Section 25(1) of the Bills of Exchange Act of 1964 (Cap 46:02), which is couched in similar terms to Section 24(1) of the South African Bills of

28
Exchange Act No. 34 of 1964. It provides as follows:
"Where a person signs a bill as drawer, acceptor or indorser and adds words to his signature indicating that he signs for and on behalf of a principal or in a representative capacity, he is not personally liable thereon."
In certain South African cases it has been held that where a
signatory does not add such words he will incur personal
liability. (See:- TRUST BANK OF AFRICA LTD V DUGMORE AND
ANOTHER 1972(3) SA 926(D); AKASIA FINANCE V DA SOUZA SUPRA AT
W 339F). I am not sure that those cases are correctly decided. Be that as it may, though, those cases, as I have shown, followed VON ZIEGLER's case. As the decision in that case has now been revisited in this judgment and as it has now been held that if there appears to be an ambiguity on a cheque, evidence would be admissible to resolve such ambiguity, I do not think that the provisions of the Sec 25(1) of the Bills of Exchange Act would be a bar to that occurring.
W
w One further point was raised by Mr. Ziman. Pointing to the fact
that the name imprinted on the cheque was "Tswelelo Supermarket"
and not "Tswelo Supermarket (Pty) Ltd" he submitted that Marsh
and Mahajan could not have signed the cheques as agents for the
latter. There is, in my view, no substance in this submission.
There is on record an averment by Marsh that a company "Tswelo
Supermarket (Pty) Ltd" was registered on 21 April 1993, with
Marsh and Mahajan as directors. There is also on record a
resolution taken by the two directors on 27 July 1994 that an

29
account be opened with the Standard Chartered Bank's Jwaneng Branch and a document dated the same day, provided by the Bank, wherein application is made to open an account in the name of "Tswelelo Supermarket (Pty) Ltd." The fact that the Bank imprinted the company's cheques with the words "Tswelelo Supermarket" without adding "(Pty) Ltd" would on these facts appear to have been an error by the Bank. The averment by Marsh that he and Mahajan intended to sign as agents of the company cannot therefore be negated merely by virtue of the words imprinted on the cheques.
I have carefully considered Lesetedi AJ's findings on the rectification defence. They followed closely the reasoning on almost identically similar facts of Corbett JA in the Marshall case where provisional sentence was also refused on the basis of such a defence. I can find no fault with them. I would dismiss the appeal against Lesetedi AJ's judgment refusing provisional sentence on that ground alone. I also find, however, that provisional sentence should be refused to enable Marsh and Mahajan to enter into the principal case so as to adduce evidence as to whether they signed the cheques in their personal capacity or in their representative capacities as agents for the company.
I turn finally to the order of Gaefele AJ granting Mahajan leave to file a plea. The learned Judge was aware that Lesetedi AJ had refused provisional sentence in the case of Marsh and given him


30
leave to file a plea. Lesetedi AJ. had also refused provisional sentence in the case of Mahajan. Having rescinded the default judgment against the latter, Gaefele AJ. was faced with the position in regard to Mahajan that although provisional sentence had been refused in his case, nothing had been said as to what he should do in any further proceedings. It therefore made eminently practical sense for Gaefele AJ. to make the order he did as to the filing of a plea by Mahajan. Otherwise matters would have been left in the air. I cannot fault Gaefele J in this regard.The appeal against his order must also accordingly fail. In the light of all aforegoing findings it is not necessary to deal with the point raised about the notice of dishonour .
To succeed in obtaining leave to appeal to this Court, appellant
would have had to show that it had prospects of success on
appeal. It has not done so. In fact, both its appeals have
failed. In the result therefore the following order is made-
The appeals of appellant Trans Lobatse (Pty) Ltd in
respect of both MISCA NO. 10/95 and MISCA A 109/95 are
dismissed with costs. The costs connected with the
applications for leave to appeal both in this Court
and in the High Court are to be borne by appellant.

^"
V
31 DELIVERED IN OPEN COURT THIS . 28th . . DAY OF JANUARY, 1997
P. H. TEBBUTT JUSTICE OF APPEAL
I agree:
T. A. AGUDA JUSTICE OF APPEAL
I agree:        
J. H. STEYN JUSTICE OF APPEAL

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