When a debtor gives the creditor an acknowledgment of debt coupled with an undertaking to pay, can the creditor reject the undertaking to pay and sue based on the acknowledgment of debt? The court dealt with this issue in Kotzé v Suid-Westelike Transvaalse Landbou Koöperasie 2005 (2) SA 295 (SCA).
The respondent (Suid-Westelike Transvaalse Landbou Koöperasie) sued the appellant (Kotzé) for payment of an amount of R191 028,32, together with interest. Two causes of action, a main claim and an alternative claim, were set out in the respondent's summons. The main claim was in respect of goods sold and delivered on credit. The alternative claim was based on a written acknowledgment of debt signed by the appellant. It is not necessary to say much about the respondent's main claim. At the trial the respondent did not succeed in proving its case in respect of this claim against the appellant. The judgment in favour of the respondent given on appeal by the Court a quo does not refer in terms to the main claim and clearly relates only to the alternative claim.
The appellant gave a written acknowledgment of debt coupled with an undertaking to pay to the respondent as part of a settlement proposal. The Respondent rejected the proposal and made a counter-offer of settlement to the appellant, which was in turn not accepted.
The appellant contended that evidence relating to this document was inadmissible because it had been sent by his attorney to the respondent as part of a settlement proposal which the respondent did not accept. The appellant contended that since the respondent had not accepted the offer made to it, no contract had come into existence. It was further contended that it had not been open to the respondent to amend that offer unilaterally by relying only on the acknowledgment of indebtedness and then to accept such offer in its amended form. It was argued that it was clear from the document that the intention of the appellant had been to acknowledge his indebtedness and agree to pay it in the manner set out therein if his offer as a whole was accepted.
The magistrate dismissed the action and the respondent succesfully appealed to the High Court of the Northern Cape Division. The appellant then appealed to the Supreme Court of Appeal.
The Supreme Court of Appeal held that the undertaking to pay did not arise by implication but from the express words in the document which indicated how the appellant proposed to do so. That proposal was an inseparable part of the undertaking and was rejected by the respondent, and the express undertaking to pay having been rejected, there was no basis upon which it could be found that in addition thereto there was also room for an implied undertaking providing the respondent with an alternative cause of action. The magistrate had accordingly correctly dismissed the action and the decision in the Northern Cape Division was reversed.
