Court name
High Court Main Division
Case name
Standard Bank Namibia Limited v Swartz
Media neutral citation
[2015] NAHCMD 272
Judge
Masuku AJ










REPUBLIC OF NAMIBIA


HIGH COURT OF NAMIBIA
MAIN DIVISION, WINDHOEK


JUDGMENT


CASE
NO.: I 3786/2014


DATE:
13 NOVEMBER 2015


NOT
REPORTABLE


In
the matter between:


STANDARD
BANK NAMIBIA
LIMITED
........................................................................PLAINTIFF


And


GERRIT
STEPHANUS
SWARTZ..................................................................................DEFENDANT


Neutral citation: Standard Bank
Namibia Limited
v Swartz (I 3786-2014) [2015] NAHCMD 272
(13 November 2015)



Coram: MASUKU AJ


Heard: 28 September 2015; 29
September 2015; 2 October 2015


Delivered: 13 November 2015


Flynote:
LAW OF CONTRACT – Contract in
terms of lending and borrowing money from a financial institution;
BANKING LAW – overdraft facilities and payment of interest.


Summary:
Plaintiff sued the defendant for
payment of an amount owing as a result of an agreement between the
parties to extend an overdraft facility to the defendant. Defendant
denied the existence of the agreement between the parties. Held that
the plaintiff proved the existence of the agreement in evidence and
that the defendant admitted receiving the amount in his account and
clearly failed to repay same. Held further that the plaintiff also
admitted to have utilised the amount. Held further that it is normal
banking practice for banks to levy interest on all overdrawn
accounts. The plaintiff’s claim was thus upheld with interest
claimed and costs.


ORDER


1. That judgment is granted in favour of the plaintiff in the
amount of N$62 234.76, plus interest thereon at
the rate of 15.20 per annum calculated daily and capitalized monthly
from 4 August 2014 to the date of payment as agreed between the
parties.


2. That the defendant pay the plaintiff’s
costs, such costs to include
the costs of one instructed and
one instructing counsel.


JUDGMENT


MASUKU AJ:


Introduction:


[1] On 2 October 2015,
I granted an order in favour of the plaintiff in the following terms:


1. That judgment is
granted in favour of the plaintiff in the amount of N$62 234.76, plus
interest thereon at the rate of 15.20 per annum calculated daily and
capitalized monthly from 4 August 2014 to the date of payment as
agreed between the parties.


2. That the defendant pays
the plaintiff’s costs and such costs to include
the
costs of one instructed and one instructing counsel.


Following
below are the reasons for the order.


[2]
Plaintiff, Standard Bank
Namibia Limited, instituted a claim for the repayment of the balance
due, with interest, on the overdraft account of the defendant Mr.
Swartz held with it. The claim is for an amount of N$62 234. 67 it
being averred that the said amount was lent and advanced to the
defendant as a result of a partly oral and partly written agreement
that was reached between the parties in or about October 2009. The

plaintiff attached
to its amended particulars of claim a copy of what it alleges to be
the written portion of the loan agreement together with a certificate
of balance, which evidences the written terms of the contractual
relationship between the parties and the extent of the defendant’s
indebtedness to the plaintiff, respectively.


[3]
The
defendant opposed
the granting of the relief sought and advanced grounds, in his
defence. In a nutshell, he averred that no written agreement exists
to prove the overdraft facility allegedly
concluded
between the parties
and
as a result thereof the plaintiff is precluded from claiming any
amount from the defendant.


Pleadings:


[4] The plaintiff’s
amended particulars of claim aver that on or about 7 January 2009, at
Rosh Pinah, an agreement was reached between the parties to advance
monies to the defendant on an overdraft and normal cheque account. 
The terms of such agreement was, inter alia, that the
plaintiff would honour the defendant’s cheques and other
instructions; charge defendant with interest on amounts due to the
plaintiff at the prime rate; plaintiff would debit the defendant’s
account with advances, bank charges, and other charges consistent
with standard banking practices; plaintiff would at any time be
entitled to call up the facility despite the limit of such facility
being reached and that any balance owing then would become due and
payable. Accordingly, the defendant would also be liable for costs
involved in the recovery of the balance due and all costs incidental
to any legal action instituted by the plaintiff. A certificate of
balance attached to the combined summons indicates that as at 4
August 2014, the balance owing to the plaintiff was N$62 234. 67.
This is the amount presently claimed by the plaintiff.


[5] The defendant filed a
plea in which he disputes the plaintiff's entitlement to the amount
claimed in its particulars of claim. Two main reasons are advanced by
the defendant to support this contention. The defendant, firstly,
denies concluding any loan agreement with the plaintiff, whether
orally or in writing. In this context, the defendant further alleges
that the plaintiff, despite being called upon, has to date failed to
produce the alleged written loan agreement concluded by it and the
defendant. The defendant further claims that the alleged terms and
conditions of the oral agreement contained under paragraph 4 of the
particulars are unknown to him and as such, he could not have agreed
to them.


[6] The defendant further
denies that the parties concluded any written agreement, whereby the
defendant agreed on any outstanding balance/s, any interest rates,
the interest rate thereof.  Defendant also denies concluding any
written agreement, in terms of which he agreed to reduce the balance
on the current account and further denies that the plaintiff called
up the overdraft facilities.


Issues
that needs to be determined


[7] The proposed pre-trial
order which was made an order of court on 29 April 2015 identifies
the one question that needs to be determined as: whether or not the
defendant is indebted to the plaintiff on the basis and in the amount
alleged in the pleadings.


The
evidence



On behalf of the plaintiff: Mr. Nolen William Christians


[8] The
plaintiff called only one witness, Mr Nolan William Christians, who
is employed as head of the plaintiff’s Legal Department. The
gist of his evidence was basically that money was advanced to the
defendant as an overdraft facility which was limited to
N$ 62
000. 00 and was set to expire on 23 July 2014. As a result of
non-payment by the defendant to reduce the facility, the plaintiff
cancelled the overdraft facility and demanded payment, which as at 4
August 2014 amounted to N$ 62 234.67. This is the amount depicted by
the Certificate of Balance attached to the amended summons as owing
by the defendant to the plaintiff.


[9] Mr. Christians
testified that an application for an overdraft facility need not be
in writing, as in this case and that only the application for a
current account was in writing in this case. Accordingly, the
overdraft facility was extended to the defendant’s current
account in order to transact in a debit balance on condition that the
account does not exceed the agreed limit by the plaintiff. It was Mr.
Christian’s testimony that the defendant’s financial
position was evaluated and the plaintiff was comfortable with
extending the overdraft facility to the defendant. It was his further
evidence that non-payment of the amount left the account with a debit
balance whereupon the plaintiff would decide on a monthly payment to
be effected in reduction of the facility. Failure to pay these
instalments resulted in the full amount becoming due, after numerous
attempts were made to contact the defendant with no success.


[10] It was this witness’
further testimony that letters of demand were sent to the defendant
on 11 March 2014 and 13 August 2014, respectively, but these letters
elicited no response from him. This resulted in the account being
“locked up”, meaning it was regarded as a non-performing
account and that instructions were thereafter sent to the plaintiff’s
Attorneys to collect the total facility from the defendant. The
certificate of balance handed in as an exhibit indicates that a total
amount of N$ 62 234.67 was outstanding as at 4 August 2014 as earlier
stated. As regards the denial by the defendant that there was a
written agreement, Mr. Christians explained that the written part of
the agreement was the application form that was signed by the
defendant for the creation of a current account. The overdraft
facilities were orally agreed to between the parties and were debited
through the current account belonging to the defendant. Under
cross examination, it became apparent that the current account was
approved first at the request of the defendant in 2009 and shortly
thereafter, on overdraft facility was orally approved, so too were
the repayment terms conveyed orally to the defendant.


[11]
The defendant took issue with the particulars that were on record
held by the plaintiff and used by the plaintiff’s Collections
Department and whether the overdraft facilities were approved orally
or in writing. Significantly, no suggestion was ever put to the
plaintiff’s witness that the details were incorrect or that the
right procedures were not followed nor that there was no money lent
and advanced to the defendant by the plaintiff.


[12]
The bank statements for the period from 10 October 2009 handed in as
exhibits, indicated that the overdraft facility was being utilised by
the defendant and the balance due is the debit balance with interest
charged only on the amount actually utilised. At the end of Mr.
Christian’s testimony, the plaintiff closed its case.


On
behalf of the defendant: Gerrit Stephanus Swartz


[13]
The defendant testified in his defence and what is apparent from his
evidence is that the current account application does not amount to
an agreement for overdraft facilities. This much is conceded to by
the plaintiff’s evidence. The defendant denied the following in
this evidence:


a) that
he entered into an agreement with the plaintiff to borrow any money
on an overdraft facility on the terms as relied on by the plaintiff;


b) that
specific terms as regards the calling back of the facility were ever
agreed to between the parties;


c) That
no formal agreement was made where by the defendant agreed on any
outstanding balances and any interest rates;


[14] No
factual allegations were tendered to support the denials by the
defendant. Under cross examination, the defendant could not confirm
whether he received any communications from the plaintiff either by
way of telephone calls or by registered post; could not confirm his
account number although he confirmed that the bank statements were
addressed to him. As regards the defence, the defendant testified
that his defence was that he could not remember entering into an oral
agreement with the plaintiff for an overdraft and that an written
agreement bearing his signature would have been the best evidence to
convince him of the existence of the alleged contract.


[15]
Under cross-examination, the defendant admitted that he did receive
overdraft money on his account in 2009 to the balance of N$ 62 000
and acknowledged further that this money that belonged to the
plaintiff bank and had to be repaid with interest. He further
admitted that a cheque book and a debit card were issued to him which
was used by his family, especially during the time (which was
unspecified) that the defendant was out of the country.


Parties’
submissions


[16]
Counsel for the plaintiff submitted that the defendant failed to
dispute the version as put forth by the plaintiff, that an oral
agreement was entered into in terms of which money was advanced and
was to be repaid with interest according to plaintiff’s implied
terms of practice. No rebutting evidence was received from the
defendant to the effect that he never received the letters nor that
he never received any money. In point of fact, the defendant admitted
that money was lent and advanced to him and that he utilised same
since 10 October 2009. He stated that according to his understanding,
this was an overdraft from the plaintiff which had to be repaid with
interest.


[17]
The defendant reiterated the averrals in his plea and submitted that
there is no evidence to support the existence of the alleged loan
agreement in that no written agreement for the request of the
overdraft facility is before court and that no written instructions
or warnings were forwarded to him.


Analysis
of the evidence


[18] Mr. Christians’
evidence during the trial remained unshaken. In his evidence in-chief
he testified that the loan agreement, which constitutes the basis of
the defendant’s alleged indebtedness to the plaintiff was
concluded on or about January 2009. He further testified that an
application for an overdraft facility need not be in writing, as in
this case and that only the application for a current account was in
writing. He reinforced this view by stating that customers indeed are
entitled to request for an overdraft facility over a telephonic call
with an employee of the bank. He could not be controverted on this.


[19] The defendant, for
his part, in his testimony, particularly under cross-examination was
to say the least evasive. In his evidence he said that he could no
longer remember many of the details regarding the transactions. In
fact, on a number of occasions while being cross-examined, he
deflected the more probing questions and many of his answers were
vague. As an example, in cross examination, the following exchange in
the battle of wits between the defendant and counsel for the
plaintiff took place:


Q:
Is it correct that you deny going into an agreement with the Bank in
respect whereof overdraft facilities were granted because the Bank
could not provide you with written prove of that agreement, is that
your defence?


A:
I cannot remember that I went into the Bank and consult with anyone
for an overdraft facility. So what I would like to say in that, to
say it was just an oral agreement or what type of agreement I would
that they have it in written and my signature as you asked that will
refresh and remind me that happened now just to say there was an oral
agreement in 2009 I cannot remember that I was in 2009 on the 7
th
October in the Bank to consult with anyone about an overdraft
facility it is difficult for me to say yes I was there because I was
very little in the Bank at all.


Q:
Okay let us just for a moment forget about whether it was an oral or
a written agreement, did you at any stage after 2009 up and until
today received overdraft facilities from Standard Bank?


A:
Yes according to the bank statement, one can see here in this page 14
yes there is an overdraft facility, yes.


Q:
So you are acknowledging that there was pay facility (intervention)
--- A debit balance of sixty two thousand?


A:
Yes.


Q:
Okay and you would agree with me that if a bank statement shows a
debit balance that that is in fact monies that you owe to the Bank
not the Bank to you?


A:
Yes that is money of the Bank yes I agree with that.


[20] As already stated,
the defendant conceded under cross-examination that, he
did receive overdraft facility in his account in 2009 to the balance
of N$ 62 000 and acknowledged that this is money that belonged to the
plaintiff bank and had to be repaid with interest. He also conceded
that a cheque book and a debit card were issued to him by the
plaintiff. It was his evidence that the latter was used by his
family, especially during his absence from the country.


[21] It
is must be mentioned that a court is entitled to take judicial notice
of the fact retail banks charge interest on overdrawn accounts[1].
In this regard, and coming closer home, plaintiff’s counsel
referred to the decision of Commercial Bank of Namibia v Preuss
t/a Equiptech
[2],
where this court held that it was common banking practice in general,
and the practice of banks in particular, for interest to be debited
to overdrawn accounts, as being money due and payable to the bank.


[22] For the foregoing
reasons I find no good or sound basis as to why the plaintiff should
be deprived of the amount claimed together with interest charged as
set out in the particulars of claim.  


[23] I
have considered the parties’ evidence and submissions on the
matter, in particular that the defendant has in evidence conceded
receiving the overdraft facility in his account. In my
respectful view
, the defence, as raised by the defendant,
lacks merits and it was for the foregoing reasons that I found in
favour of the plaintiff as reflected in paragraph 1 of this judgment.


TS Masuku


Acting Judge


APPEARANCES:


PLAINTIFF:
Y. Campbell


Instructed
by
Engling,
Stritter & Partners,


DEFENDANT: G S
Swartz


In person



[1]
Harmse, Amler’s Precedents of Pleadings, 7th ed,
page 64




[2] 1999
NR 174 (HC).