Swaziland: Court of Appeal

Leon JP:
The appellant was the unsuccessful applicant in the court a quo. He sought an order in the following terms:

“1.       Directing the respondent to credit the applicant’s account no.002/02/8095/21 with the sum of E50, 000.00 (fifty thousand Emalangeni) being in respect of a cheque deposited on the 30^th April 1998.
2.      

Directing the respondent to pay to the applicant all sum (sic) that may be standing to the credit of the applicant’s said account.
3.       Awarding costs against the respondent.
4.       Further alternative relief.”

The application was dismissed, with costs, by Sapire CJ and it is against that judgment that the appellant has appealed.


It is common cause that:
(a)     

The respondent is a financial institution duly registered in terms of the Financial Institution Order with its principal place of business at Mbabane
(b)      The appellant is the holder of account no.002/02/80395/21 which is held with the respondent’s Manzini branch.
(c)      On 30^th April 1998 the appellant cashed a cheque for the sum of E50, 000.00 drawn on the Central Bank in Mbabane to be deposited into his account in Manzini for collection.
(d)      On 5^th May 1998 the respondent allowed the appellant to withdraw the sum of E9, 160.00 against the cheque.
(e)      On 7^th May 1998 the respondent allowed the appellant to withdraw E10, 000.00 against the cheque.
(f)      On 15^th May 1998 the respondent caused the appellant’s account to be debited with the sum of E50, 000.00.
(g)      The appellant was informed that the cheque was “unpaid”.
(h)      The cheque was not returned to the appellant.

In support of his case the appellant annexed a copy of the respondent’s deposit slip marked “A”. That deposit slip has three columns. The first is headed “SAME BRANCH CHEQUES” and under that appears the words “SAME DAY VALUE”. The second column is headed “LOCAL CITY CHEQUES” and underneath that appears the words “FOUR DAYS VALUE”. The third column is headed “COUNTRY CHEQUES” while underneath that appears “10 DAYS VALUE”.

The appellant alleged that in terms of normal banking practice the cheque in question as “A LOCAL CITY CHEQUE” was cleared and funds were available after four days. However, at the right-hand bottom of Annexure “A” appear the words “CHEQUES ETC HANDED IN FOR COLLECTION WILL BE AVAILABLE AS CASH WHEN PAID”. Furthermore, one Leonard Dlamini on behalf of the respondent stated in this answering affidavit that in terms of normal banking practice in Swaziland a cheque drawn on a bank in Mbabane but deposited in Manzini takes approximately seven days to clear. He alleges further that annexure “A” is not the actual deposit slip in terms of which the appellant deposited the cheque for E50, 000.00. He denies further that the cheque was cleared within four days and that in any even the “LOCAL CITY CHEQUES” referred to in annexure “A” refers specifically to Nedbank cheques drawn in a different branch of Nedbank (Swaziland) in Swaziland and not another bank as was the case here. I pause to observe that it was the view of the learned Chief Justice that the wording of the pro forma deposit slip permits, and favours, a third interpretation. Local cheques should be understood to be cheques drawn on other banks (or even a different branch of the collecting bank) situated in the same town. The use of the word “LOCAL” connotes a place.

This contention is supported by the relevant meanings given in the Shorter Oxford Dictionary namely “relating to place or situation:… “belonging to a town or other limited region”…”pertaining to or concerned with place or position in space”…”belonging to, or existing in, or peculiar to a particular place or places”.

The cheque in question was deposited at the respondent’s Manzini branch but the bank on which the cheque was drawn was the Central Bank at Mbabane. The court a quo held, therefore, that the cheque was a “COUNTRY CHEQUE” which, according to annexure “A” had “10 days value”.

It is also not in dispute that the appellant’s attorneys wrote to the respondent in October 1998 and that the respondent responded to that letter on 19^th November 1998. In the letter from the appellant’s attorneys they demanded that:
(ii)    

the amount of E50, 000.00 be credited to the appellant’s account, that the account be closed and that the appellant’s attorneys be handed a cheque for the amount standing to the credit of the appellant’s account, or
(iii)    that the respondent returns the original cheque together with a full explanation as to why the credit was reversed long after the cheque was to be cleared.

In reply to that letter Mr. Dlamini, on behalf of the respondent, stated that the respondent was unable to provide the cheque as it was in the hands of the police for investigation. He added “Your client is currently indebted to us and the debt is as a result of the cheque in question which was returned unpaid by the drawee bank. The cheque was returned to us within a reasonable time. We are therefore unable to acceed (sic) to your demand”.

The learned Judge erred in law in finding that no agreement was concluded in creating an obligation on the respondent to meet withdrawals against the cheque in question.
3.       The learned Judge erred in law in holding that the respondent was entitled to reverse the credit in applicant’s accounts, considering that:
3.1.    

The respondent had given value for the cheque and had become holder thereof;
3.2.     The respondent had failed to return the dishonoured cheque to the applicant, as was its legal duty;
3.3.     The respondent had failed to give “notice of dishonour timeously or at all”.

The court a quo relied upon the case of ABSA BANK LTD VS I.W. BLUMBERG AND WILKINSON 1997(3) SA669 (SCA). At first blush there would appear to be a point of distinction between that case and the present case. In that case, it was common cause that there was in existence a contract in terms of which the appellant banker was entitled to debit the value of the uncleared effects against the customer respondent’s account. In this case, there is no such express contract admitted. However, the appellant does not in terms deny the existence of the words on the pro forma deposit slip. In that case, like this, the banker had honoured two cheques totalling R85, 000.0 0 before the effects had been cleared. The customer’s claim against the bank was dismissed by the Supreme Court of Appeal of South Africa.

There are passages in the judgment of Zulman JA, who gave the judgment of the court, which support the conclusion arrived at by the learned Chief Justice. At page 682(H) of the judgment reference is made to WILLIS IN SOUTH AFRICAN LAW where the following passage is quoted with approval: