IN THE HIGH COURT OF SOUTH AFRICA

(WESTERN CAPE HIGH COURT. CAPE TOWN)

In the matter between:

THE LAND & AGRICULTURAL DEVELOPMENT

and

JUDGMENT

[3] The defendants resist the granting of provisional sentence, both on constitutional grounds and on the basis that the plaintiffs claims have been novated or settled in a lesser amount. 1 will deal with the latter aspect first.

[4] The defendants contend that the plaintiff is not entitled to enforce the terms of the acknowledgement of debt against them as the plaintiff's claim has been novated in an amount of R20 million by way of an oral agreement between the parties and, in any event, the defendants have been afforded an extension of time within which to restructure their finances so as to make payment to the plaintiff of the said amount of R20 million. Furthermore, the defendants contend that the said amount of R20 million was not to be called up without reasonable notice to them and that as such notice has not been given, these proceedings are premature.

[5] With regard to this defence, it is noted that the defendants bear the onus of proving that the probabilities of

"I refer to our numerous discussions and proposals and   thank   you   for   your   support   and   advice. Following   our   discussions,   we   are   currently finalising arrangements for alternative financing on commercial   bank  terms   and   now   propose   the following: We propose that we pay The Land Bank R20 million in full and final settlement of all claims between us. We await your confirmation that this is acceptable in order for us to finalise our new arrangements.    We would then proceed with the cancellation of the existing bond and registration of the  new bond,  and  the  formal  release  of the personal sureties related to the indebtedness, on payment of the amount."

[10] "Annexure NK4" itself says that the proposal was subject to "confirmation that this is acceptable". There is no proof of the acceptance of the offer by the plaintiff.

[13] In any event, paragraph 4 of the acknowledgement of debt provides that in the event of default or insolvency, the balance of the principal debt shall become due and payable without demand.

[14] I accordingly conclude that the defendants have not succeeded in discharging the onus of proving that in the principal case the probabilities of success are against the plaintiff.

[15] I will briefly deal with the alternate basis upon which the defendants resist the granting of provisional summons. They contend that the common law remedy of provisional sentence is inconsistent with the Constitution of the Republic of South Africa and in particular sections 9 and 34 thereof. Section 34 of the constitution provides:

"34. Access to Courts. Everyone has the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court or, where appropriate, another independent and impartial tribunal or forum."

[16]   Mr A G Binns-Ward SC, who appeared with Ms P F van

[20] The Rule 8 measures, which assist the plaintiff to obtain rapid and cost effective execution against the property of the defendant, do not remove the possibility of any recourse to the judicial system and do not necessarily result in the defendants receiving an unfair hearing. Rule 8 recognises that the plaintiff is required to have recourse to the Court before he or she can execute against the property of the defendant. The rule makes provision for the filing of two affidavits only, but the Court has a discretion to allow the filing of a further set of affidavits in exceptional circumstances. The entire procedure which governs Rule 8 does not exclude proper judicial intervention.    The Court retains its discretion to refuse the granting of provisional sentence in certain instances. Rule 8(9), it seems, creates a balancing act which ensures fairness to both parties to the proceedings. Its proceedings are governed by the rules of court, which are at all times subject to judicial oversight.

[22]  The learned authors go on to say:

"The limitation on a defendant's right to an oral hearing and cross-examination is justifiable. The law... has taken cognisance of the ideals and conceptions prevailing in a community. The law has to pay due regard to the needs of the commercial world... (see page 244)".

[23] Mr Binns-Ward also referred in argument to the potential inequity of the remedy, in that it only allows a provisional sentence judgment debtor, who is able to satisfy the claim and the cost of the provisional sentence proceedings, the right to proceed to trial. This, he says, offends against the equality provision of section 9 of the constitution, in that it differentiates between categories of people.

[25] The provisional sentence procedure seeks to strike a balance by ensuring fairness to both parties. It serves a rational objective of ensuring that indebted defendants do not unduly delay matters and avoid their obligations by engaging in lengthy and costly litigation at the expense of legitimate creditors. The provisional sentence proceedings contain sufficient safeguards which ensure fairness to both parties to the proceedings. That being so, such proceedings are, in my view, not inconsistent with the constitution.

(a)	Payment of the sum of R37 914 027,01.
(b)	Interest at the rate of 15,5% per annum, calculated from the date of service of summons being 26 November 2008 to date of payment.
(c)	Cost of suit on a scale as between attorney and own client and collection commission at 10%.
DESAI, J