Braz v Afonso and Another (495/96) [1997] ZASCA 81; 1998 (1) SA 573 (SCA); [1997] 4 All SA 428 (A); (26 September 1997)

Braz v Afonso and Another (495/96) [1997] ZASCA 81; 1998 (1) SA 573 (SCA); [1997] 4 All SA 428 (A); (26 September 1997)

The Supreme Court of Appeal held that the exemption from giving notice of dishonour under section 48(2)(c)(iv) of the Bills of Exchange Act depends on the objective fact that the drawee bank was not bound to pay the cheque due to insufficient funds or overdraft arrangements. The appellant's allegation of insufficient funds was not disputed by the respondents and thus must be accepted as established. The reason given by the bank for dishonour (staleness) is irrelevant; what matters is the actual lack of funds. The appellant was therefore excused from giving notice of dishonour and entitled to provisional sentence. The appeal was upheld, and the order below was substituted to grant...

Citation
[1997] ZASCA 81
Parties
Appellant: Eduardo Fernandes Braz; Respondent: Refino da Silva Afonso; Respondent: Manuel Jose Ponte Pereira
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
26 September 1997
Case Number
495/96
Procedural Posture
Civil Appeal / Appeal From Provisional Sentence Action
Outcome
Appeal upheld. Provisional sentence granted against the defendants jointly and severally for R 318,155.00 with interest and costs. No order as to wasted costs of postponement.
Judges
Smalberger, Nienaber, Schutz, Scott, Zulman
Legal Topics
Bills of Exchange Act, Notice of Dishonour, Provisional Sentence, Stale Cheque, Onus of Proof
Banking and Finance Civil Procedure Bills of Exchange Act Notice of Dishonour Provisional Sentence Stale Cheque Onus of Proof

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Parties

Eduardo Fernandes Braz

Appellant

Refino da Silva Afonso

Respondent

Manuel Jose Ponte Pereira

Respondent

Procedural Posture

Civil Appeal / Appeal From Provisional Sentence Action

Legal Issues

  1. 1 Whether notice of dishonour of the cheque was dispensed with under section 48(2)(c)(iv) of the Bills of Exchange Act.
  2. 2 Whether the plaintiff established that the drawee bank was not bound to pay the cheque due to insufficient funds or overdraft arrangements.
  3. 3 Whether the reason for dishonour (staleness) affects the exemption from notice of dishonour.

Ratio Decidendi

The Supreme Court of Appeal held that the exemption from giving notice of dishonour under section 48(2)(c)(iv) of the Bills of Exchange Act depends on the objective fact that the drawee bank was not bound to pay the cheque due to insufficient funds or overdraft arrangements. The appellant's allegation of insufficient funds was not disputed by the respondents and thus must be accepted as established. The reason given by the bank for dishonour (staleness) is irrelevant; what matters is the actual lack of funds. The appellant was therefore excused from giving notice of dishonour and entitled to provisional sentence. The appeal was upheld, and the order below was substituted to grant...

Court Disposition

Appeal upheld. Provisional sentence granted against the defendants jointly and severally for R 318,155.00 with interest and costs. No order as to wasted costs of postponement.

Orders

  • Provisional sentence is granted against the defendants jointly and severally for R 318,155.00 with interest thereon at 15.5% per annum from 2 June 1994, with costs.
  • No order is made as to the wasted costs of 3 April 1996.