Navidas (Pty) Ltd. v Essop, Metha v Essop (426/92, 427/92) [1994] ZASCA 84; 1994 (4) SA 141 (AD); [1994] 2 All SA 426 (A) (1 June 1994)

Navidas (Pty) Ltd. v Essop, Metha v Essop (426/92, 427/92) [1994] ZASCA 84; 1994 (4) SA 141 (AD); [1994] 2 All SA 426 (A) (1 June 1994)

The Supreme Court of Appeal held that presentment for payment via the clearing house system does not constitute due presentment under the Bills of Exchange Act, as the Act requires physical presentment at the drawee branch. However, presentment for payment was dispensed with in both cases under section 44(2)(c) because the respondent had countermanded payment, terminating the drawee's duty and authority to pay, and the drawer could have no reason to believe the cheques would be paid if presented. In the Navidas matter, the court found that the use of a trade name by a close corporation as payee does not constitute a wrong designation within the meaning of section 30(5), provided the...

Citation
[1994] ZASCA 84
Parties
Appellant: Navidas (Pty) Ltd; Appellant: A K Metha; Respondent: M H Essop
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
1 June 1994
Case Number
426/92, 427/92
Procedural Posture
Civil Appeal / Appeal From Trial Court Judgment; Heard Together
Outcome
Appeals upheld; provisional sentence granted in both cases; costs awarded as specified.
Judges
Corbett, Hefer, Kumleben, Nicholas, Mahomed
Legal Topics
Bills of Exchange Act, Presentment of Cheques, Negotiation of Instruments, Trade Names and Legal Personality, Provisional Sentence
Banking and Finance Civil Procedure Bills of Exchange Act Presentment of Cheques Negotiation of Instruments Trade Names and Legal Personality Provisional Sentence

Case Brief

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Parties

Navidas (Pty) Ltd

Appellant

A K Metha

Appellant

M H Essop

Respondent

Procedural Posture

Civil Appeal / Appeal From Trial Court Judgment; Heard Together

Legal Issues

  1. 1 Whether presentment for payment of cheques via clearing house system constitutes due presentment under the Bills of Exchange Act.
  2. 2 Whether presentment for payment was dispensed with due to countermanding under section 44(2)(c) of the Bills of Exchange Act.
  3. 3 Whether the endorsement of the cheque by a close corporation using its trade name constitutes a valid negotiation under section 30(5) of the Bills of Exchange Act.

Ratio Decidendi

The Supreme Court of Appeal held that presentment for payment via the clearing house system does not constitute due presentment under the Bills of Exchange Act, as the Act requires physical presentment at the drawee branch. However, presentment for payment was dispensed with in both cases under section 44(2)(c) because the respondent had countermanded payment, terminating the drawee's duty and authority to pay, and the drawer could have no reason to believe the cheques would be paid if presented. In the Navidas matter, the court found that the use of a trade name by a close corporation as payee does not constitute a wrong designation within the meaning of section 30(5), provided the...

Court Disposition

Appeals upheld; provisional sentence granted in both cases; costs awarded as specified.

Orders

  • The summonses in cases Nos 8870/91 and 9651/91 are amended to include the alternative that payment of the cheque was dispensed with under section 44(2)(c) of the Act.
  • The notices of appeal are amended accordingly.