David John Bruni and Ian Robert McLaren of Bruni & McLaren in their capacity as Liquidators of the Small and Medium Enterprises (SME) Bank Limited (in liquidation) v Tanben College CC and Another (HC-MD-CIV-ACT-CON-2022/01897) [2025] NAHCMD 27 (5 February 2025)

REPUBLIC OF NAMIBIA

HIGH COURT OF NAMIBIA, MAIN DIVISION, WINDHOEK
JUDGMENT
Case number: HC-MD-CIV-ACT-CON-2022/01897
In the matter between:
DAVID JOHN BRUNI AND IAN ROBERT MCLAREN OF BRUNI & MCLAREN IN THEIR CAPACITY AS LIQUIDATORS OF THE SMALL AND MEDIUM ENTERPRISES (SME) BANK LIMITED (IN LIQUIDATION)			PLAINTIFF
and
TANBEN COLLEGE CC			1st DEFENDANT
GULNARA MUYAMBO			2nd DEFENDANT
Neutral citation:		David John Bruni and Ian Robert McLaren of Bruni & McLaren in their capacity as Liquidators of the Small and Medium Enterprises (SME) Bank Limited (in liquidation) v Tanben College CC (HC-MD-CIV-ACT-CON-2022/01897) [2025] NAHCMD 27 (5 February 2025)
Coram:	DE JAGER J
Heard:	23, 24, 25 September and 18 October 2024
Delivered:	5 February 2025

Flynote: Civil trial – Admissions in plea and the contents of the pre-trial order limit issues that may be raised at trial – Court declines to adjudicate matter on issues outside the pre-trial order.

Civil trial – Loan default case – Indebtedness onus on the plaintiff – Production of certificate of indebtedness – Not a liquid document – Has evidential value – The defendants are entitled to dispute the certificate of indebtedness – Prima facie evidence means prima facie proof of the indebtedness – Without further evidence from the defendants the prima facie proof becomes conclusive, and the plaintiff’s onus is discharged – Whether the onus is discharged depends on the nature of the case and the relative ability of the parties to contribute evidence on the indebtedness issue – Agreement to a certificate of indebtedness clause impacts on that question – Purpose of certificate of indebtedness clause – Certificate of indebtedness clause gives the certificate of indebtedness agreed evidential value and calls for an answer by the defendants – If the plaintiff went as far as it reasonably could in producing evidence and that evidence calls for an answer, prima facie proof was produced, and, without an answer from the defendants, it becomes conclusive, and the plaintiff’s onus is completely discharged – Doubtful or unsatisfactory answers and suspicions leaving the court guessing as to the indebtedness equals no answer and fail to destroy the prima facie proof, which then amounts to full proof – On the defendants’ failure to disturb the prima facie proof, it becomes conclusive, and the defences that the plaintiff failed to comply with section 25(4) of the Electronic Transactions Act 4 of 2019 (the Act) for certain computer-generated documents and that those documents were not the best evidence fall away.

Summary: This is a civil trial wherein the plaintiff bank claims payment for moneys lent and advanced under a written loan agreement. The bases of the claim are the first defendant’s breach of its repayment obligations under the loan agreement, the whole outstanding balance having become due, owing and payable, and a written deed of suretyship executed by the second defendant in the plaintiff’s favour. The plaintiff relies on a certificate of indebtedness provided for in the loan agreement. The defendants closed their case without calling any witnesses. The defences raised in the absence of calling any witnesses were as follows. The loan agreement is unenforceable because a suspensive condition was unfulfilled. The plaintiff is uncertain about the amount owed. The plaintiff did not substantiate how it arrived at the claimed amount. The plaintiff did not provide any evidence to satisfy the requirements of section 25(4) of the Electronic Transactions Act 4 of 2019 (the Act) while it relied on computer-generated documents. Those documents are also not the best evidence. No evidence was provided regarding the prime interest rate from time to time, and legal fees paid were included in the claimed amount. Lastly, the debt lies against the current account (not the loan account on which the claim is based), which has a separate agreement.

Held that, the defendants, in their plea, admitted the alleged suspensive conditions were terms of the loan agreement (not suspensive conditions), the defendants could not raise the enforceability of the loan agreement as an issue at the trial as it was not included in the pre-trial order, and the court declines to adjudicate the matter on that basis.

Held that, in a loan default case, the onus to prove the defendant’s indebtedness (the due, owing and payable amount) is on the plaintiff, and even though a certificate of indebtedness (which is not a liquid document, but which has evidential value) is produced, the defendants are entitled to dispute it while the onus does not shift to them.

Held that, when dealing with a certificate of indebtedness, prima facie evidence means prima facie proof of the defendants’ indebtedness and without further evidence from the defendants, the prima facie proof becomes conclusive, and the plaintiff’s onus is discharged, but whether the plaintiff’s onus is discharged depends on the nature of the case and the relative ability of the parties to contribute evidence on the indebtedness issue and the agreement to a certificate of indebtedness clause has a bearing on that question. If the plaintiff went as far as it reasonably could in producing evidence and that evidence calls for an answer, prima facie proof was produced, and, without an answer from the defendants, it becomes conclusive and the plaintiff’s onus is then completely discharged. Doubtful or unsatisfactory answers equals no answer and fail to destroy the prima facie proof, which then amounts to full proof.

Held that, the question is whether, in the circumstances of the case at hand (considering its nature and the parties’ relative ability to contribute evidence), the prima facie proof of the certificate of indebtedness had been so disturbed by the defendants as to prevent it from becoming conclusive proof.

Held that, the defendants agreed to a certificate of indebtedness clause, which aimed to facilitate proof of the indebtedness at any given time and to eliminate problems proving it. Considering the nature of the case, it would, for obvious reasons, be difficult for the plaintiff to prove every entry in its books which may have been made by several different employees over a prolonged period. The fact that Donald Alcock does not have personal knowledge about the transactions underlying the certificate of indebtedness cannot, in the court’s view, detract from its agreed evidential value and the plaintiff was contractually entitled to use only the certificate of indebtedness to show that the amount is due, owing, and payable by the defendants.

Held that, notwithstanding the agreed certificate of indebtedness clause, Alcock went the extra mile and testified on the transactions of the current and loan accounts (he did not simply produce the certificate of indebtedness and confirm his signature on it) and even though he relied on the bank’s records and had no personal knowledge about the transactions, he went as far as he reasonably could in producing evidence. Given the agreed certificate of indebtedness clause, which gives the certificate of indebtedness agreed evidential value, Alcock’s evidence called for an answer from the defendants.

Held that, the defendants were not left in the dark with nothing to answer. They must have been relatively able to contribute to the evidence and dispute entries where deserved, but they did not. Their counsel’s attack went to non-compliance with the Act concerning exhibits B, C and D, ignorance of where and how the claimed amount was sourced, that there was no evidence as to what the prime interest rate was from time to time and that the amount included legal fees without any specific details. All those answers are doubtful and or unsatisfactory, leaving the court guessing.

Held that, when a certificate of indebtedness prima facie proves the indebtedness, it cannot be rebutted by bald, vague or sketchy averments which leave the court guessing as to the true basis for the defendants' denial of indebtedness.

Held that, the defendants failed to provide any factual basis on which they challenged the amount claimed, they failed to provide evidence to rebut the certificate of indebtedness, and suspicions that the amount was not correctly calculated are insufficient to non-suite the plaintiff. If a certificate of indebtedness is shown to be suspect in its accuracy or reliability, it does not mean that it has no evidential value or must be disregarded in its entirety. If the prima facie proof remains unrebutted, it becomes sufficient proof of the facts with which it is concerned and necessary to be established by the plaintiff. There is no evidence before court that the certificate of indebtedness is wrong. That equals no answer, leaving the prima facie proof undestroyed. The prima facie proof becomes conclusive, and the plaintiff discharged its onus of the amount due, owing and payable. That being the case, it becomes unnecessary for the plaintiff to rely on exhibits B, C and D, and the defences of non-compliance with the Act and those exhibits not being the best evidence falls away.

Held that, the defence that the claim is based on the wrong account was not included in the pre-trial order, and therefore, the matter is not adjudicated on that point. The plaintiff was, in any event, entitled to move the debit to the correct book (from the current account to the loan account) with the manual entry on 30 March 2022 and on the defendants’ own admission (in their plea), payments were not made, and there can be no other conclusion to this case that the defendants must pay their dues.

_______________________________________________________________

ORDER

_______________________________________________________________

1. The defendants must pay the plaintiff jointly and severally, the one paying the other to be absolved:

1. N$9 363 693,50.

2. Interest on the amount in paragraph 1.1 above at the prime lending rate plus 1,5 per cent per annum from 1 September 2024 to date of final payment.

3. Costs of suit on the agreed attorney and client cost scale, including the costs of one instructing and one instructed legal practitioner.

The matter is finalised and removed from the roll.

_______________________________________________________________

JUDGMENT

_______________________________________________________________

DE JAGER J:

Introduction

1. This judgment follows a civil trial wherein the plaintiff, David John Bruni and Ian Robert McLaren of Bruni & McLaren, in their capacity as Liquidators of the Small and Medium Enterprises (SME) Bank Limited (in liquidation), claims payment from the defendants, Tanben College CC and Gulnara Muyambo, jointly and severally, the one paying the other to be absolved, for moneys lent and advanced by it to the first defendant under a written loan agreement.

2. The bases of the claim are that:

1. The first defendant’s breach of its obligations under the written loan agreement concluded with the plaintiff (the loan agreement) by failing to pay the outstanding balance on the due date and being in arrear, and the whole outstanding balance having become due, owing and payable; and

2. A written deed of suretyship executed by the second defendant in favour of the plaintiff (the suretyship) whereby she bound herself as surety and co-principal debtor in solidum jointly and severally with the first defendant for the due payment by the first defendant of all moneys which the first defendant may then (when the deed of suretyship was executed) or from time to time in future owe the plaintiff from whatsoever cause or howsoever arising as well as for the due and punctual performance and discharge of any contract or agreement concluded between the first defendant and the plaintiff.

3. The loan agreement, the suretyship, and their terms are undisputed.

4. Some of the terms of the loan agreement, relied on by the plaintiff and admitted by the defendants, are that:

‘A certificate signed by any manager of the Bank (whose appointment it shall not be necessary to prove) as to any indebtedness of the Borrower hereunder, or as to any other fact, shall be prima facie evidence of the Borrower’s indebtedness to the Bank or of such other fact for the purpose of any application or action, judgment or order or for any other purpose whatsoever.’¹

and

‘Furthermore, all legal costs as between attorney and his own client, charges and disbursements and fees of a like nature incurred by the Bank in successfully enforcing or defending any of the provisions of this Agreement, or any claim thereunder, shall be for the account of the Borrower and be payable on demand.’²

5. Some of the terms of the suretyship, relied on by the plaintiff and admitted by the defendants, are that:

1. The second defendant’s liability under the suretyship included the first defendant’s liability to the plaintiff under the loan agreement.

2. ‘It is further agreed and declared that …; that all admission or acknowledgements of indebtedness by the Debtor shall be binding on me/us; that the nature and amount of my/our/the Debtor's indebtedness to the Bank shall at any time be determined and proved by a written certificate purporting to have been signed by the manager for the time being of any branch of the Bank, which certificate shall, upon the mere production thereof, be binding on me/us and in any legal proceedings against me/us be prima facie proof of the contents of such certificate and of the fact that such amount is due and payable and will be valid as a liquid document against me/us in any competent Court;’³

6. The plaintiff relies on a certificate of indebtedness as contemplated in the loan agreement and the suretyship signed by Donald William Alcock, the plaintiff’s collections manager, reflecting the defendants’ indebtedness. The plea to the certificate of indebtedness noted the contents thereof. In the pre-trial order, it was recorded as a relevant undisputed fact that Alcock certified through a certificate of indebtedness on 11 April 2022 that the first defendant is indebted to the plaintiff for N$7 008 617,67 as of 31 March 2022 plus interest thereon at a rate of 9,25 per cent (prime plus 1,5 per cent) per annum from 1 April 2022 to date of final payment. One of the recorded issue of fact to be resolved at the trial was whether the defendants were indebted to the plaintiff in those terms. At trial, an updated certificate of indebtedness was handed in as an exhibit without objection (exhibit V).

7. The pleaded defence is as follows:

1. Immediately after the bank closed in June 2017, the plaintiff stopped sending the first defendant bank statements. As a result and given the surrounding public allegations of fraud and theft of clients’ moneys from the bank, the first defendant was sceptical about continuing to pay because of the fear that its money would be stolen and there would be no way it could be traced. In addition, bank statements were requested but refused. Under those circumstances, the first defendant was justified to discontinue payments. Non-payment is attributable to the bank’s closure, which is beyond the first defendant’s control, and the default cannot be willful.

2. The drawdowns took place on 18 November 2015 when the loan amount was transferred from the loan account to the current account, and thereafter, the first defendant utilised the money. At that time, the loan agreement was conditional because the mortgage bonds were only registered on 9 December 2015 after the loan amount was paid. Non-fulfilment of a suspensive condition (referring to registration of mortgage bonds) renders the contract unenforceable.

3. The breach is denied. The first defendant paid monthly before, during and after the bank’s closure by a monthly stop order deduction from the first defendant’s (current) bank account with the plaintiff until April 2019 and by the second defendant’s cash deposits from August 2017 to March 2019 into the alternative bank account provided by the plaintiff in July 2017. The first defendant became reluctant to pay as no receipts were issued, and no correspondence confirmed proof of payment. In 2020, the first defendant’s income was negatively affected by the Covid-19 pandemic. The first defendant was always willing to pay. On 11 August 2020, the plaintiff sued the defendants under a different case number but with different amounts. That case was withdrawn. The plaintiff is uncertain about the amount owed.

4. The claimed amount is denied. The plaintiff did not substantiate how it arrived at the claimed amount. According to the 17 May 2019 statement, the principal debt amount recovered was N$3 372 839,29, interest recovered was N$1 688 557,51, and additional payments made directly to the plaintiff’s alternative account was N$512 200. There is no way the outstanding balance amounts to N$7 008 617,67.⁴

8. Alcock testified at the trial. The parties agreed that the evidence by David John Bruni (a proprietor of the liquidators) and Jenevieve Michelle Swartz (the plaintiff’s erstwhile account relationship manager, corporate banking division) be accepted by affidavit.

The defence

9. The defendants closed their case without calling any witnesses. The parts of the defendants’ case that required evidence are thus not considered. The defendants’ arguments in defence of the claim were as follows.

10. The certificate of indebtedness, not a liquid document⁵, is merely prima facie evidence of the defendants’ indebtedness. It was agreed between the parties that the certificate of indebtedness is prima facie proof of indebtedness, but the defendants are entitled to dispute the indebtedness.⁶

11. The plaintiff did not provide any evidence to satisfy the requirements of section 25(4) of the Electronic Transactions Act 4 of 2019 (the Act). The first defendant had a current account and a loan account with the plaintiff. The plaintiff relied on an amortisation schedule of the loan (exhibit B), a statement of the loan account (exhibit C), and a statement of the current account (exhibit D). All those exhibits are computer-generated documents. The information on those exhibits was extracted from at least three different computer systems. Alcock was not the administrator of those systems and did not capture any of the data stored therein. The data was a mixture of computerised and manual entries captured by others. Alcock could not confirm the transactions or information contained in those exhibits were correct because he had no personal knowledge of them, and they merely worked on the records that ‘were already there’. There were fluctuations in interest rates, which he did not personally effect on the systems, and he could not confirm that the interest rates were applied correctly. The defendants argued in the absence of compliance with the Act, the court cannot relax the hearsay rule, it cannot weigh up the veracity of the evidence in exhibits B, C and D, and it stands to be disregarded, or no weight can be attached to it. They contended that Alcock did not provide any evidentiary basis whereupon he could conclude that the data contained in exhibits B, C and D was correct. Alcock did, however, say that in eight years at the plaintiff, there were no issues with the system, checks and balances were in place, input data was correct, and there was no reason to doubt the system’s integrity.

12. The defendants’ counsel argued that it is unclear where and how the claimed amount is sourced as no statement or other evidence showed the actual balance. They complained that exhibits B, C, and D were not the best evidence, as the bank would download information from the systems in CSV (comma-separated value files) file formats, but that was never presented.

13. The defendants further complained that no evidence was provided regarding the prime interest rate from time to time. They contended that, according to exhibit C, legal fees paid to the plaintiff’s attorneys were included, and there is no indication that those charges were taxed.

14. The previous action instituted in 2019 was based on the current account for which there was a separate contractual arrangement. The defendants argued that the loan account and the current account are two separate accounts stemming from two separate contractual relationships with different interest rates and complained that Alcock primarily dealt with the transactions in the current account and not the loan account. Alcock testified it was not uncommon in commercial banking practice for a client to have a current account with an overdraft facility and for that current account to service a loan account. According to the defendants’ counsel, it is unlikely that a bank would allow a loan to be serviced from an overdrawn current account with no overdraft limit in place, let alone for four years.

The determination

15. The defence will now be considered together with the plaintiff’s arguments.

16. The plaintiffs pointed out that the so-called suspensive conditions were pleaded as terms of the loan agreement (not as suspensive conditions), and the defendants admitted that in their plea. The pre-trial order that followed the parties’ joint proposed pre-trial order does not include the enforceability of the loan agreement as an issue to be determined. On the contrary, the terms and conditions of the loan agreement were recorded as undisputed. In those circumstances, the defendants could not raise the enforceability of the loan agreement at the trial. The court, therefore, declines to adjudicate the matter on the alleged unenforceability of the loan agreement.

17. The plaintiff relies on a certificate of indebtedness to support the due, owing and payable amount. It is not a liquid document, and the defendants are entitled to dispute it, but it has an evidential value that must be examined. The plaintiff’s counsel relied on First Rand Bank Limited v Vega Holdings Proprietary Limited.⁷ The authorities referred to therein are considered in more detail.

18. To set the scene for what follows, the court is guided by what was said in Ex parte the Minister of Justice: In re R v Jacobson and Levy⁸ about what prima facie evidence means and what happens to the prima facie proof and the plaintiff’s onus (which does not shift) in the absence of further or satisfactory evidence by the opposition:

‘“Prima facie’ evidence in its more usual sense, is used to mean prima facie proof of an issue the burden of proving which is upon the party giving that evidence. In the absence of further evidence from the other side, the prima facie proof becomes conclusive proof and the party giving it discharges its onus. It is not, however, in every case that the burden of proof can be discharged by giving less than complete proof on the issue; it depends on the nature of the case and the relative ability of the parties to contribute evidence on that issue. If the party, on whom lies the burden of proof, goes as far as he reasonably can in producing evidence and that evidence “calls for an answer” then, in such case, he has produced prima facie proof, and, in the absence of an answer from the other side, it becomes conclusive proof and he completely discharges his onus of proof. If a doubtful or unsatisfactory answer is given it is equivalent to no answer and the prima facie proof, being undestroyed, again amounts to full proof. These principles are to be extracted both from decisions in the Courts of South Africa and England. … And in all these cases the burden of proof was never anywhere else than upon the shoulders of the party giving the prima facie evidence. The burden of giving further evidence may shift, but not the burden of proof.’

19. In a loan default case, the onus to prove the defendants’ indebtedness (the due, owing and payable amount) is on the plaintiff. When dealing with a certificate of indebtedness in a loan default case, the court accepts that prima facie evidence means prima facie proof of the defendants’ indebtedness (the issue of which the burden of proof is on the plaintiff). The onus on the plaintiff does not shift to the defendants upon the plaintiff producing a certificate of indebtedness. Without further evidence from the defendants, the prima facie proof becomes conclusive, and the plaintiff’s onus is discharged. However, whether the plaintiff’s onus is discharged depends on the nature of the case and the relative ability of the parties to contribute evidence on the indebtedness issue. The agreement to a certificate of indebtedness clause will come into play here. That is dealt with below. If the plaintiff went as far as it reasonably could in producing evidence and that evidence calls for an answer, prima facie proof was produced, and, without an answer from the defendants, it becomes conclusive. Then, the plaintiff’s onus is completely discharged. Doubtful or unsatisfactory answers equals no answer and fail to destroy the prima facie proof, which then amounts to full proof.

20. The question thus is whether, in the circumstances of the case at hand (considering its nature and the parties’ relative ability to contribute evidence), the prima facie proof of the certificate of indebtedness had been so disturbed by the defendants as to prevent it from becoming conclusive proof.⁹

21. The defendants agreed to clause 12.1 of the loan agreement (the certificate of indebtedness clause) and are bound thereby. Considering the nature of the case, it would, for obvious reasons, be difficult for the plaintiff to prove every entry in its books which may have been made by several different employees over a prolonged period. The main purpose of clause 12.1 of the loan agreement was clearly to facilitate proof of the amount of the first defendant’s indebtedness to the plaintiff at any given time and to eliminate problems proving the due, owing and payable amount. The fact that Alcock does not have personal knowledge about the transactions underlying the certificate of indebtedness cannot, in the court’s view, detract from its agreed evidential value. The plaintiff was contractually entitled to use only the certificate of indebtedness to show that the amount is due, owing, and payable by the defendants. Those findings are supported by Senekal v Trust Bank of Africa Ltd (Senekal)¹⁰ and Bank of Lisbon International Ltd v Venter en 'n Ander,¹¹ which the court accepts.

22. Alcock’s testimony informed the court of the following. On 18 November 2015, the plaintiff paid the agreed loan amount of N$5,6 million into the first defendant’s current account, credited that account and debited the loan account with the same amount. On 19 November 2015, the first defendant made the first drawdown of N$2,5 million, and the first instalment for capital and interest became due and payable on 31 December 2015. From there, the current account was debited monthly with instalments, and the loan account was credited with the same instalment amounts. Thereby, the current account serviced the loan account. He testified about payments made into the current account and withdrawals from it in the form of fund transfers, cash withdrawals and cheques issued. Alcock referred to specific dates, modes of payment or withdrawal, and amounts for the debit and credit entries and all payments and withdrawals. At times, the current account reflected a debit balance. The first defendant started being in arrears on 29 August 2016 when it failed to make provision for the monthly debit orders on the current account. From there, the debit balance on the current account increased while it appeared, from the loan account, that it was still serviced by the current account, but the current account was overdrawn. The first defendant remained in arrears since 29 August 2019. As of 30 March 2022, the unpaid instalment and interest was N$7 008 617,67. Alcock’s testimony on the various transactions was not seriously challenged.

23. Alcock explained that whereas the loan account was serviced by an overdrawn current account, there was no money to reduce the loan, and it remained unpaid. He further explained that whereas the system did not have the functionality to reverse the debit orders every month when there were insufficient funds in the current account from where the loan account was serviced to reflect the indebtedness in the loan account instead of the current account, that was done manually on 30 March 2022, which then resulted in the loan account reflecting a debit balance as it should have because of the debit orders being unpaid.

24. Notwithstanding the agreed certificate of indebtedness clause, Alcock went the extra mile and testified on the transactions on the current and loan accounts. He did not simply produce the certificate of indebtedness and confirm his signature on it. He went much further than that. For Alcock’s further testimony, he relied on the bank’s records, while he did not have personal knowledge about the transactions themselves. The nature of the case cannot be ignored. The case concerns a bank recovering moneys lent and advanced several years ago in circumstances where the current account used to service the loan account was overdrawn, and due to its system functions, the debit orders were not reversed at the time, resulting in several transactions giving rise to the due, owing and payable amount. The parties agreed on a certificate of indebtedness clause carrying evidential value, which would require the defendant to answer if it says that the claimed amount is wrong. That agreement, too, cannot be ignored. Alcock went as far as he reasonably could in producing evidence, and given the agreed certificate of indebtedness clause, Alcock’s evidence called for an answer from the defendants. As in Senekal,¹² the defendants closed their case without having led any evidence. While they must have been relatively able to contribute to the evidence, they kept quiet.

25. The defendants were not left in the dark with nothing to answer. The defendants must have been relatively able to contribute to the evidence and dispute entries where deserved. They did not. Their counsel’s attack went to non-compliance with the Act concerning exhibits B, C and D, ignorance of where and how the claimed amount was sourced, that there was no evidence as to what the prime interest rate was from time to time and that it included legal fees without providing any details. All those answers are doubtful and unsatisfactory, leaving the court guessing.

26. As submitted on the plaintiff’s behalf while relying on True Group Property Fund (Pty) Ltd v Bernon Investments 5 (Pty) Ltd,¹³ when a certificate of indebtedness prima facie proves the indebtedness, it cannot be rebutted by bald, vague or sketchy averments which leave the court guessing as to the true basis for the defendants' denial of indebtedness. The court agrees with that contention.

27. Whereas the plaintiff’s evidence did not stop with the certificate of indebtedness, and the defendants agreed to a certificate of indebtedness clause carrying evidential value, an answer was called for. The defendants failed to provide any factual basis on which they challenged the amount claimed. They failed to provide evidence to rebut the certificate of indebtedness. Suspicions that the amount was not correctly calculated are insufficient to non-suite the plaintiff.¹⁴ If a certificate of indebtedness is shown to be suspect in its accuracy or reliability, it does not mean that it has no evidential value or must be disregarded in its entirety. If the prima facie proof remains unrebutted, it becomes sufficient proof of the facts with which it is concerned and necessary to be established by the plaintiff.¹⁵

28. There is no evidence before court that the certificate of indebtedness is wrong. That equals no answer, leaving the prima facie proof undestroyed. The prima facie proof becomes conclusive, and the plaintiff discharged its onus of the amount due, owing and payable. That being the case, it becomes unnecessary for the plaintiff to rely on exhibits B, C and D, and the defences of non-compliance with the Act and those exhibits not being the best evidence fall away.

29. Regarding the issue of the current and loan accounts having separate agreements, Alcock explained the manual reversal of 30 March 2022. Factually, the loan was never paid if there were no incoming funds from the first defendant or funds in the current account. That is a logical conclusion requiring no further explanation. The answer to that defence furthermore lies in the following statements by the court in Ismael v First National Bank of Namibia:¹⁶

‘Mr Bertelsman [acting for the bank] then relied on the specialities of banking law and submitted that the defendant had a right to set-off one account against the other. He referred in particular to Halesowen v Westminster Bank Ltd [1970] 3 All ER 473 where Lord Denning MR said at 477F:

'. . . suppose a customer has one account in credit and another in debit. Has the banker a right to combine the two accounts so that he can set-off the debt against the credit and be liable only for the balance? The answer to this question is: Yes, the banker has a right to combine the two accounts whenever he pleases, and to set off one against the other unless he has made some agreement, express or implied, to keep them separate.'

Winn LJ agreed. Buckley LJ, though dissenting on another point, also agreed on the point under consideration. Lord Denning MR went on to point out that where a bank opens two accounts for a customer, one of which is a loan account and the other is a current account, there is usually an implied agreement that the bank will not combine the two accounts or set-off one against the other without the consent of the customer. Otherwise no customer could have any security in drawing a cheque on his current account.

But that was not the position in the instant case. The plaintiff had a current account and a call account and there has been no suggestion made in the evidence that there was some agreement, either express or implied, that the defendant, as a matter of banking law, would not have a right to combine the two accounts and to set-off one against the other. Mr Joubert did not refer the Court to any authority on this special rule relating to bank accounts and I am unable to see any good reason not to apply it.

The foregoing submission was made to meet the eventuality of a finding that the debit to the current account was unauthorised. I have found that that was not the case. Mr Joubert argued that lack of authority to make the debit alters the position with regard to combining accounts but in the circumstances of this case I do not think it does. A banker has an unquestionable right to retain a credit balance on a customer's account against a debt due from that customer. See Paget's Law of Banking 9th ed at 411.

He is entitled to set-off one debt against another. The debit to the current account followed by a transfer from the call account were mere book entries made to achieve that result. I therefore hold that as a matter of law the defendant was entitled to combine the plaintiff's two accounts and to set-off one against the other or to set-off the plaintiff's indebtedness against the credit balance in his call account. This is a further ground for dismissing the plaintiff's contractual claim.’

30. The plaintiff, in essence, wrote the debit in the wrong book. It was written in the current account instead of the loan account. When the court asked the plaintiff’s counsel about the defendants’ point that the two accounts are governed by separate agreements, it was correctly submitted that that defence was not pleaded nor included in the pre-trial order. The court agrees with the plaintiff’s counsel, and the matter is not adjudicated on that point, but the court adds, as was submitted by the plaintiff’s counsel, that, based on Ismael v First National Bank of Namibia, the plaintiff did nothing wrong when it moved the debit to the correct book. Moreover, on the defendants’ own admission (in the plea), payments were not made. There can be no other conclusion to this case that the defendants must pay their dues.

31. If the general rule on costs is applied, the plaintiff, being successful with its claim, is entitled to its costs. A higher cost scale was agreed upon. No arguments were made about why the agreed cost scale should not apply. Under the basic rule on costs, the court exercises its discretion to grant the plaintiff costs as agreed.

Conclusion

32. In conclusion, it is ordered that:

1. The defendants must pay the plaintiff jointly and severally, the one paying the other to be absolved:

1. N$9 363 693,50.

2. Interest on the amount in paragraph 1.1 above at the prime lending rate plus 1,5 per cent per annum from 1 September 2024 to date of final payment.

3. Costs of suit on the agreed attorney and client cost scale, including the costs of one instructing and one instructed legal practitioner.

The matter is finalised and removed from the roll.

__________________

B DE JAGER

Judge

APPEARANCES
PLAINTIFF:	S J Jacobs Instructed by JC van Wyk Attorneys Windhoek
DEFENDANTS:	J P Ravenscroft Jones Instructed by T Nanhapo Incorporated Windhoek