Ge Capital Australia Ltd v Pertsinidis No. DCCIV-99-552

GE CAPITAL Australia Ltd v PERTSINIDIS
[2000] SADC 68 `

His Honour Judge Kitchen
Civil

This is an application by the defendant to be released from an undertaking given by him on 23rd June 1999, as varied on 16th December 1999.
By an application dated 20th April 1999 the plaintiff sought an order that the defendant deliver up to the plaintiff a Volvo truck (“the truck”) and a Freightmaster trailer (“the trailer”), possession of both of which the defendant had obtained pursuant to a hire purchase agreement (“the hire purchase agreement”) made between the plaintiff and the defendant, the truck being the subject of a supplement, S1, to the agreement and the trailer being the subject of a supplement, S3, to the agreement, both the supplements being part of the agreement and all being dated 1st June 1995. The basis of the plaintiff’s claim was that by January 1999 the defendant had failed to make several periodic payments due under each of the supplements, S1 at the rate of $3,707 per month and S3 at the rate of $1,278 per month, and on 12th January 1999 the plaintiff served notice terminating both the S1 and the S3 supplements pursuant to the hire purchase agreement, upon the giving of which the plaintiff demanded the delivery up of the truck and the trailer by the defendant, which the defendant failed or refused to do. The plaintiff’s application was supported by the affidavit of David Querzoli, the plaintiff’s Risk Manager, Credit and Operation.
The plaintiff’s application came before me on 2nd June 1999. I adjourned the application to 9th June 1999, directing that the defendant file by 8th June 1999 any affidavit or affidavits upon which he sought to rely.
On 8th June 1999 the defendant filed an affidavit in which he deposed inter alia that on 1 January 1999:

as to S1, and by reason of (inter alia) an overpayment by him in relation to another supplement (S3) to the hire purchase agreement, the arrears of periodic payments were $4,279.38 and not $44,484 as the plaintiff claimed (paragraph 19).
As to S3, the arrears of periodic payments were $120.76, not $6,390 as the plaintiff claimed, and the $120.76 was “less than one periodic payment. The (hire purchase agreement) states that the default must be of a periodic payment” (paragraph 20).

those assertions being drawn from a report by Brett & Watson Pty Ltd, consulting actuaries, obtained by the defendant “.... showing a statement of payments due and payments made .... compiled by reference to my bank statements”; the report was exhibited to his affidavit.

In his affidavit the defendant deposed (in paragraph 23):-
“While I acknowledge that as at 1st January 1999 I was a little more than one periodic payment in default on S1, I say that the lack of co-operation and inaccurate and incomplete book keeping by the plaintiff has significantly contributed to the situation becoming what it is .....”

The defendant’s affidavit also dealt with his contention concerning the amount to be paid by him to obtain ownership of the truck and the trailer, having regard to the terms of the hire purchase agreement; it is apparent there had previously been exchanges between the parties on that topic.

When the adjourned application resumed on 9th June 1999 Mr Tilmouth Q.C., counsel for the defendant (at pages 4 and 5 of the transcript) canvassed the topic of the amount required to “pay out” the supplement S1 and S3, and also the matter of the arrears of periodic payments; it appears in those pages that Mr Tilmouth Q.C. conceded there were arrears of periodic payments at 1st January 1999, at least to the extent the defendant had admitted particularly at paragraph 23 of his affidavit. At page 7 of the transcript Mr Tilmouth Q.C. said:
“When it came to the notices of demand and termination in January, there was plainly a dispute of a substantial proportion, as to the amount of money which was owing. Since then, the money has simply increased on the monthly repayment basis, because there was termination and there’s been no payment.
When it came to the notices of termination, just to give you an example on the S1, the prime mover, it was alleged that there were practically no payments at all - I beg your pardon, there were no payments for the 12 months from 1 February 1998 of the $3,770 per month.
The appendix A relating to S1 of the accountant shows that although there were some difficulties in ‘98, there were five payments made on 1 June, there were another three payments made on 29 June and then there were two more paid in August. That means that there’s also a dispute about the basis of termination, because on this basis, the amounts alleged in the notice of default and then the termination on the basis of that, were erroneous.
What I put to you is this, putting aside any question of default, which in our submission, if there is one, would be minor in the context of the large dispute about what is now a difference of $50,000, which is significant. Our submission is, it’s inappropriate to order possession at this stage, the defendant’s livelihood depends on these vehicles.”

Again, in my view, the words conveyed an admission as to some periodic payment being in arrear at 1st January 1999. The reference to $50,000 was the difference, as I apprehend, between the plaintiff’s and defendant’s calculation of the “pay out” figure for the S1 and S2 supplements.

I further adjourned the plaintiff’s application to 22nd June 1999 to give the plaintiff the opportunity to consider the defendant’s affidavit, and its exhibited report, and for the defendant to reflect on my intimation that he “proffer an amount of the order of that which he would have paid” had the supplements S1 and S2 “remained on foot”, that is, they had not been terminated, or purportedly terminated, by the plaintiff. I said “Mr Pertsinidis would clearly understand that if he is not going to proffer an amount in the order of that he would have paid had it remained on foot, then the Court might be disposed to make the order” sought by the plaintiff. Mr Tilmouth Q.C. said in effect there would be some serious proposal put to the Court concerning that issue.
On 22nd June 1999 Mr Tilmouth Q.C. announced he was instructed by the defendant “to offer that a payment of a bank cheque tomorrow in the sum of $31,029.71 and to continue to furnish bank cheques as and when the next monthly payments on the agreements S1 and S3 accrue, so that the current obligation undoubted on the agreement continues to be met”. Mr Robertson, counsel for the plaintiff, announced that provided those payments were made the plaintiff “does not now press its application made specially returnable and dated 20th April 1999, but we ask that the application remain on foot so that the checking exercise can be undertaken and that we have liberty to apply to re-list it on reasonable notice to my friend”, after what Mr Tilmouth had described as “mutual discovery” of and access to primary records to further the “accounting exercise” the parties wished to engage in.
On 23rd June 1999 the plaintiff brought in minutes of a consent order and the Court made the following order:-
“The Court notes the following undertakings of the defendant, by his Counsel, to the Court and to the plaintiff, without prejudice:
1...... To pay on 23 June 1999 the sum of $ 31,072.71 by bank cheque to the plaintiff by delivery to its solicitors, Marshalls, whose receipt shall be sufficient acknowledgment of payment.
2To pay on the first working day of each month by bank cheque to the plaintiff by delivery to its solicitors, Marshalls, whose receipt shall be sufficient acknowledgment of payment the following sums:-
......... 2.1 $ 3,707.00 in respect of Supplement V0400201S1; and
2.2$ 1,278.00 in respect of Supplement V0400201S3.
3...... To maintain, operate and use the Volvo Prime Mover registered as VWR 820 and the Freightmaster Trailer registered as YBX 124 in accordance with the terms and conditions of the Master Commercial Hire Purchase Agreement dated 1 June 1995 and the Supplements thereto:
The Court orders BY CONSENT:
1...... That within 7 days the defendant do make available for inspection by the plaintiff the bank statements of the defendant relating to accounts maintained by the defendant with:
1.1National Australia Bank;
......... 1.2 Citibank;
1.3Commonwealth Bank of Australia;
......... referred to in paragraph 18 and Exhibits “F”, “G” and “H” of the defendant’s affidavit sworn 8 June 1999.
2That within 28 days of the documents referred to in paragraph 1 hereof being made available for inspection the plaintiff do file and serve an affidavit of service (sic) of response to the affidavit of the defendant sworn 8 June 1999.
3...... That the plaintiff’s application be otherwise adjourned to a date to be fixed.
4That the costs of and incidental to the plaintiff’s application and this order be reserved for further consideration.
5...... That the action be referred to the Masters’ List for further directions.
AND the parties may be at liberty to apply on 48 hours written notice.”
The sum of $31,072.71, as the parties agreed for the purposes of the order, was the aggregate of the periodic payments payable since 1st January 1999 pursuant to S1 and S3 had the agreement not been terminated by the plaintiff.
On 11th August 1999 the matter came before Master Kelly for directions - he adjourned it to 15th September 1999, noting that “the D(efendant) requests pleadings. That question is reserved for further consideration”.
On 15th September 1999 the Master referred the matter to me for hearing on a date to be notified. That reference, as I understand, was made pursuant to the liberty to apply reserved in the order dated 23rd June 1999.
Before me on 6th October 1999 the plaintiff protested that bank statements provided by the defendant had been partly “masked”, and sought an order that the defendant’s bank statements be produced in their entirety. The defendant’s solicitor requested an adjournment to brief counsel. On 12th October 1999 an order was made that the defendant produce the bank statements referred to in the order made in June 1999. On that occasion Mr Tilmouth Q.C. gave the following answer to the question I posed to him (pages 17, 18):-
“HIS HONOUR:         Going back one further step: is it that the defendant says that, by looking at the payments identified in the particular bank statements which he is now intending to produce, there is an aggregate of payments, which would, if looked at carefully, show that he was not in arrears? Is that his position, or is it that, beyond that, there are other payments which are not shown in any bank statement of the defendant?
MR TILMOUTH:       As to the former, you will remember that we did admit to arrears and we paid money into court, but we say yes, we are not in arrears.
......... As to the latter, I have to be careful, because I have been away and in the Full Court.   My hesitancy is that I haven’t had time to get fully on top of the matter. Can I take some instructions?”
HIS HONOUR:          Yes.
MR TILMOUTH:       I understand we also assent to your second proposition that, ultimately, we are not in arrears, but what we are trying to do is focus upon what really is in dispute, to try and work out the bottom line, in a dollar sense, about what is in dispute here. There is a very wide margin, at the moment, something in the order of $100,000. We have produced a report which says basically no. ......”
On 29th November 1999 the defendant applied for an order that:
“1.     The plaintiff’s application dated 20th April 1999 be dismissed;
2.   This action proceed by way of pleading;
3.   The defendant be released from his undertaking to make monthly
payments to the plaintiff in the sum of $4,985;
4.   (Discovery by the plaintiff);
5.   Costs;
6.   Such further or other order as the Court deems just or equitable
and a Declaration
1.     That the plaintiff has no further legal or equitable interest in the
equipment, the subject of this action.”

The application was supported by the defendant’s affidavit sworn on 26th November 1999 in which he deposed (paragraph 24) that he had obtained further reports from Brett & Watson Pty Ltd which he exhibited to his affidavit; as to those further reports, which are dated in October 1999, the defendant deposed that they were prepared not only upon the records the defendant had of his payments to the plaintiff (as had been the case with the earlier reports) “but also those payments acknowledged as received by the plaintiff for which I had no record”. The defendant went on to depose (paragraph 26) that upon making the payment due on 1st December 1999 pursuant to his undertaking “the plaintiff would have received $2,540 more than the full value and benefit of the agreement”.

On the hearing of that application, on 10th December 1999, Mr Wells Q.C. for the defendant submitted that not only was the defendant not in arrears at 1st January 1999 but the defendant had “paid out any residuals”, therefore the defendant was absolutely entitled to the equipment, the subject of S1 and S3 and “we have a concern about paying money for the plaintiff in that event. We are seeking a release from that aspect of your Honour’s order which was in the form of requiring an undertaking”. Further Mr Wells Q.C. said there were a number of defences of set-offs and counter claims that the defendant wished to pursue were the plaintiff’s originating application to be put into a permissible and appropriate form. The plaintiff had produced to the defendant, what I understood to be, a copy of an unfiled affidavit canvassing the defendant’s affidavit sworn on 8th June 1999 and other matters. In the course of his submissions Mr Wells Q.C. said that the defendant had not had an opportunity to consider the plaintiff’s answering affidavit. Mr Wells Q.C. replied to the following question I put to him (page 10):
HIS HONOUR: Now, concerning the monthly payments, I will hear Ms Forsythe about that. The difficulty of course is that in order to determine whether indeed there is any amount still owing, or any instalments continue to fall due, on the basis the contract is still on foot, they should continue to be paid. But it might be appropriate to consider that they be paid into court.
MR WELLS:That would be our second position, that if you feel that in order to, as it were, preserve the balance between the parties, the payments should continue, on one view at the moment because the plaintiffs think they are entitled to them, then they should be paid into court. For the time being at least, at least until we have been able to examine this affidavit and see where it leads us, we would - if you were so disposed, we would not oppose an order in those terms. It would be, however, manifestly unfair to require us to continue to pay them to the plaintiff, given the defence that we raise and the evidence that we bring forward to support it.”

The application was adjourned until 16th December 1999.

On 16th December 1999 the parties came in with draft minutes of order. The Court made the following order:-
“The Court Orders:
1..... That without prejudice to the Defendant’s application for the costs of the proceedings to date upon the basis that they are summary proceedings which have failed, the Plaintiff has leave to proceed by way of a Statement of Claim in the within action (No.552 of 1999) as if the Plaintiff’s Application by Application for Directions dated 20 April 1000 was for all purposes an originating process in accordance with Rule 7 of the District Court Rules.
2.That the Defendant be released from his undertaking, noted by the Court on 23 June 1999, to pay on the first working day of each month by bank cheque to the Plaintiff by delivery to its solicitors Marshalls the sums of
......... 2.1 $3,707.00 in respect of Supplement V0400201S1; and
2.2$1,278.00 in respect of Supplement V0400201S3
......... and the Court notes that the Defendant now undertakes to make these payments into Court to the credit of this action.
3.That the Plaintiff file and serve a Statement of Claim by 14 January 2000.
4..... That the Defendant file and serve a Defence by 4 February 2000.
5.That the Plaintiff file and serve any Reply by 18 February 2000.
6..... That the question of the costs of the proceedings to date be adjourned for further consideration to Friday 14 January 2000 at 9.15 a.m.”
In the course of his submissions concerning the Minutes of Order Mr Wells Q.C. said (pages 21-22):-
“And you will see that para. 2 effectively seeks the leave of the court to vary the undertaking about the payment of monthly instalments by having those amounts paid into court. Our instructions are to seek to be released entirely from that undertaking, and we can’t do that today and we proffer for the time being the undertaking to pay the monies into court and seek a release from the present undertaking to that extent, but we wish to give notice to my friend and to you that we will be making an application which will be directed towards a full release from those undertakings. Our case is we have paid and we are now overpaying, and overpaying in a way which is having a serious effect on our business as we are having to put aside moneies which affect our cash flow, in circumstances where we claim we are not obliged to do so. So the payment into court does not cure our concern, but given that we’ve got limited time this morning it’s not a matter that in the end we will pursue today but we need to give you notice that we propose to pursue it and will be issuing an application and seeking to have it heard just as soon may be. We have another monthly instalment to pay towards the beginning of January and it is hurting us, to put it bluntly.”
On 14th January 2000 I heard and determined the defendant’s application that he have his costs of the proceedings prior to the order made on 16th December 1999.
On 1st March 2000 the defendant filed an application seeking an order that he “be released from his undertaking to make monthly payments to the Court to the credit of this action in the sum of $4,985”. He filed his affidavit sworn on 1st March 2000 in support of his application. In that affidavit the defendant deposed:
“3(a)In June 1999 the plaintiff made an application to this honourable Court for a summary order for the delivery up of certain equipment, the subject of what is referred to as a Master Commercial Hire Purchase Agreement and the supplementary agreements made pursuant to that Master Agreement. At the time the plaintiff alleged that there were payments in arrears on the supplementary accounts referred to as “S1” and “S3”. There was uncertainty as to the amounts, if any, which were in arrears. There was uncertainty as to the balance payable in order to discharge the Agreements.
(b)Through my legal representatives I sought an adjournment of the plaintiff’s application. It was a condition of the adjournment that I undertook to make up the alleged arrears from the time of the alleged termination of the agreement (January 1999) until the time of the plaintiff’s application and that I undertook to continue to make the monthly payments due pursuant to the Agreement because, on my case, the alleged termination was invalid and the contracts were still on foot. I was prepared, therefore, to continue to make the payments as at that time I acknowledged that I was under a contractual obligation to do so.
(c)The undertaking, however, was not intended to extract payments beyond my contractual obligations, nor was it intended that I provide security to the plaintiff.
4.On 16th December 1999 I was released from my undertaking to make the monthly payments to the plaintiff on my undertaking to make the payments into Court. I now seek to be released from that latest undertaking.”

Under the heading “Circumstances Have Now Changed” the defendant went on to depose:

“5(a)There is a genuine dispute as to the validity of the notices of termination, including as to whether or not there are any arrears and as to whether or not there is any balance payable pursuant to the Agreement.
(b).....
(c)Considerable further payments made to the plaintiff pursuant to the undertaking have brought us to the point where I have completely honoured my contract with the plaintiff (inclusive of all supplements to the Agreement). The plaintiff has been paid and has received all moneys it is entitled to pursuant to the Agreement between the parties. Actuarial figures have been compiled which demonstrate this and I refer this honourable Court to exhibits “E”, “F” and “G” of my affidavit sworn 26th November 1999. Further to this I say I have overpaid on the Agreements as other payments in the form of cash and telegraphic transfers have been made for which I do not have the original source document and consequently have not been included in the actuarial calculation. The extent and amounts of these payments should be apparent on the plaintiff’s statements and deposit receipts.
(d)Any further payments into Court will operate as a security for the plaintiff’s claim.
(e)Payments made into Court will have an impact on my business operation.”

The balance of the affidavit contains the plaintiff’s averment concerning the affect on his business of him continuing to make payments pursuant to his undertaking.

The defendant’s application came before me on 17th April 2000. The plaintiff objected to some paragraphs of the defendant’s affidavit, sought limited discovery as to others (which I ordered) and applied for an order that the defendant be called for cross-examination upon those paragraphs of his affidavit concerning the affect on his business of continuing to make payments pursuant to his undertaking. I was informed that the defendant had not made any payments into Court since January 2000.
The time made available to hear the defendant’s application was shorter than was reasonably necessary; it was adjourned to 3rd May 2000. On that day the Court was informed that the defendant had made the limited discovery ordered at the previous hearing. Mr Robertson for the plaintiff again pressed his application that the defendant be presented for cross-examination on his affidavit. Mr Wells Q.C. submitted that it would be necessary to embark on evidence concerning the defendant’s business, as affected by continuing payments into Court, only if the Court were to conclude, contrary to Mr Wells Q.C. submissions, which he developed, that a change in the defendant’s financial circumstances was the sole basis upon which he should be discharged from his undertaking. I ruled that I would hear Mr Wells Q.C. submission, but were the truth of the passages in the defendant’s affidavit, to which the plaintiff objected, be seen to be vital, then an order for the cross-examination of the defendant would likely be made.
Mr Wells Q.C. submitted, and the plaintiff does not contend otherwise, that the Court has power to release a party from an undertaking given to the Court, even where the other party does not consent to that. Adam P. Brown Male Fashions Pty Ltd. v Philip Morris Inc. (1981) 148 CLR 170 at 177 - 178:-
“Considerable argument was directed to the question whether a court has power, otherwise than in the case of mistake operative at the time of giving it to release a party from an undertaking, at least in the absence of the consent of the other party. But in our opinion a court undoubtedly has such a power. Just as an interlocutory injunction continues ‘until further order’, so must an interlocutory order based on an undertaking. A court must remain in control of its interlocutory orders. A further order will be appropriate whenever, inter alia, new facts come into existence or are discovered which render its enforcement unjust: (the Court then referred to three cases including Chanel Ltd v F.W. Woolworth & Co. Ltd. (1981) 1 W.L.R. 485 @ 492). Of course, the changed circumstances must be established by evidence.”

Further, Mr Wells Q.C. submitted (and this is the gravamen of the defendant’s application) where an undertaking is given as part of an interlocutory order made in respect of an application which is then adjourned generally or sine die, with express liberty to apply, the party who gave the undertaking does not have to show good grounds, either that there has been a significant change in circumstances or the discovery of new evidence, before applying to discharge the undertaking. He referred to Butt v Butt (1987) 1 W.L.R. 1351.

In Butt the plaintiff, as part of an action by him concerning the proceeds of sale of a coal yard, obtained an ex parte injunction against the defendant restraining him until a date a few weeks hence from disposing of the net proceeds of sale of his former matrimonial home. At a subsequent inter partes hearing the defendant gave an undertaking that “until trial or further order” he would not, inter alia, sell his former matrimonial home save at a fair market price. The Court made an order continuing the undertaking and the order proceeded:-
The motion be adjourned generally.
Costs reserved.
Liberty to apply on 48 hours notice.”
In the course of the inter partes hearing counsel for the defendant indicated to the Judge who heard the application that, at a later date, the defendant might apply to discharge the undertakings, and especially on the grounds of possible material non-disclosure when the plaintiff applied ex parte. The defendant subsequently applied to discharge his undertakings but was met with the plaintiff’s objection, which the Judge hearing the application accepted, that the defendant was not entitled to be discharged from his undertakings by reason of the decision in the Chanel case. The defendant appealed against the dismissal of his application, contending that Chanel’s case was distinguishable on a number of grounds, principally that the motion was not, as it was in Chanel’s case, stood over to the trial of the action but was adjourned generally. Nourse L.J. wrote at page 1354C:-
“(Counsel for the defendant) also relies on the fact that the order contains an express liberty to apply, albeit not an express liberty to apply to vary or discharge the order. In the Chanel case there was no such express provision in the order, although it was held that an undertaking ‘until trial or further order’ necessarily imports a liberty to apply in appropriate circumstances. It may be that if the order in the present case had been silent on the question of an adjournment, the express liberty to apply would not have added anything. But it seems to me that the express collocation of the two must, if anything, show that it was intended that there should be a liberty to apply to re-open the matter in certain circumstances - not necessarily in Chanel circumstances. I do not myself regard this as a very significant point, but I do not think that it is one which can be against the defendant.”
and at page 1354F:-
“For these reasons I am of the opinion that, looking only at the terms of the order, the defendant’s case on this appeal is made out. However, if there had been any doubt about the matter it would have been not only desirable but necessary for the court to pay attention to” (the defendant’s indication in the inter partes hearing that at a later date the defendant might apply to discharge the undertaking). “That shows that it was expressly contemplated that the defendant might wish to apply to be discharged from his undertakings on the ground that there had been a material non-disclosure when the plaintiff first made his ex parte application to Judge Fitzhugh. It seems to me that it would therefore in any event be quite wrong to prevent the defendant from making that application.”

He allowed the appeal.

The other member of the Court Mustill L.J. gave, in my respectful view, even greater emphasis to what the defendant had said at the inter partes hearing:-
“.... if it is made plain and understood by all concerned in the hearing that the undertaking is given in the contemplation that the defendant may subsequently wish to apply for the discharge of the undertaking when his evidence is in order, there would, in my judgment, be something wrong with the law if that common understanding were to be frustrated simply because the relief takes the form of an undertaking rather than an injunction.
..... It is to my mind plain from the judgment of Buckley L.J. (in Chanel’s case) that the defendant there had not in any way signalled an intention to return to the court before trial if the state of the evidence so permitted ......
If any such intention had been intimated and clearly recorded by the judge at first instance (as it was here) it seems to me that the reasoning of Buckley L.J. would necessarily have been entirely different.
....
Here the judge’s record of what was said at the first hearing is consonant with the form of the order which was made. Both showed what had been intended to happen in the future. The defendant had signalled the possibility (not yet crystallised into a firm intention) of returning to court in order to have the injunction discharged.” (Page 1355)
Mr Wells Q.C. submitted that here the plaintiff’s application was for possession of the truck and trailer, it was as a condition of adjourning the application to enable the parties to exchange and examine their respective accounts that the defendant gave his undertaking on 23rd June 1999, that the undertaking was not given in lieu of any injunction the plaintiff sought - none was sought, although the plaintiff characterised its application as an injunction - and by 16th December 1999 at the latest, the purpose of the undertaking was spent, that is, as I understand, the accounts had been exchanged and examined and the defendant then advanced the case that inter alia he was not in arrears on 1st January 1999 when the plaintiff purported to terminate the hire purchase agreement.
In my opinion, at the time the defendant gave his undertaking, he had expressly admitted that on 1st January 1999 he was in arrears with the payments stipulated in each of the supplements S1 and S3, although not in the quantum claimed by the plaintiff - that is the plain effect of paragraph 23 of his affidavit sworn on 8th June 1999 - and he sought the adjournment of the plaintiff’s application to have the opportunity to show that what he contended was the amount required to “pay out” the agreement was the correct figure. The defendant did not in any sense reserve a right to, or indicate he might apply to, re-open the issue of arrear or no arrears as at 1st January 1999. He in effect sought equitable relief from the consequences of his expressly admitted failure to make the monthly periodic payment required by the supplements S1 and S3, so that he might continue in possession of the equipment and pursue with the plaintiff the matter of the “pay out” figure under the agreement. I interpolate here that I do not think there is any substance in his claim that the admitted amount of the arrears in respect of supplement S3, being less than a periodic payment, the plaintiff was not entitled to terminate that particular supplement.
For its part the plaintiff by its counsel on 9th June 1999 acknowledged that, aside from any default by the defendant, the defendant as a hire purchaser had a legitimate expectation that the plaintiff would accept an offer to “pay out” the hire purchase agreement. By 23rd June 1999 the issue between the parties was the amount of the pay out, which in turn depended, among other things, on the aggregate of the arrears at 1st January 1999.
In my opinion the defendant’s undertaking was given as a condition of the Court adjourning the plaintiff’s application for possession of the truck and trailer, founded upon the defendant’s breach of S1 and S3 by failing to make the periodic payments, a breach which he expressly admitted, although not the quantum of the payments in arrear at 1st January 1999. At 23rd June 1999 the defendant’s case was that a pay out of $100,075 to the plaintiff by 30th June 1999 would entirely discharge his financial obligations to the plaintiff and secure him “the ownership” of the truck and the trailer. Conversely the plaintiff said the amount required was $150,725.01. The payments which the defendant on 23rd June 1999 undertook to make were I think understood by the parties to be applied to the reduction of the pay out figure.
By November 1999 the defendant had discovered what the defendant claimed was material, by way of an acknowledgment by the plaintiff, that the defendant, prior to 1st January 1999, had paid amounts the plaintiff had not previously acknowledged which, together with amounts the defendant alleged, but the plaintiff denied, he had paid before that date and the amounts paid by the defendant pursuant to the order dated 23rd June 1999, aggregated (with a payment to be made in December 1999) more than the entirety of his obligations to the plaintiff. Those matters raised substantial issues of fact between the parties which could be determined only by trial. Accordingly the parties were directed to file pleadings which were also to encompass the defendant’s asserted set-off and counter claim summarised by Mr Wells Q.C.
I do not accept Mr Wells Q.C. submission that the Court had no power to make the order it did, in effect varying the defendant’s undertaking by requiring payment into Court in lieu of payment to the plaintiff. In my opinion the initial undertaking was not to be discharged because by November 1999 its purpose had been spent: the twofold purpose of the undertaking was to secure for the defendant his continuing possession of the truck and trailer, notwithstanding his admitted breach of the hire purchase agreement by being in arrear with periodic payments at 1st January 1999, and to give the defendant the opportunity to explore the “pay out” figure. In the result, in November 1999, the defendant claimed inter alia that at 1st January 1999 he was not in arrear with periodic payments to 1st January 1999, an allegation denied by the plaintiff. In my opinion the purpose of the undertaking has not been spent; it is that the defendant is asserting, in substance, he now has material which shows that the, or a, basis on which he gave the undertaking, namely that he was in arrear with periodic payments at 1st January 1999, was not correct. In my opinion the defendant’s undertaking was not of the kind given in the circumstances which applied in Butt’s case, that is a reservation to re-visit, or signalling an intention to re-visit, the undertaking. If the subsequent undertaking is to be discharged the defendant must bring himself within the principles of Chanel’s and Adam P. Brown’s case.
Concerning the defendant’s now claim that he was not at 1st January 1999 in arrear with periodic payments, the defendant deliberately gave his undertaking based upon the information contained in reports he had obtained from Brett & Watson Pty Ltd in April 1999, by reference to which he admitted in his affidavit sworn 8th June 1999 he was in arrear. It appears that the defendant did not disclose to Brett & Watson Pty Ltd payments he now says he made to the plaintiff but which did not appear in his bank statements. In my view the defendant has not shown, in that respect, he “has become aware of facts which he could not reasonably have known, or found out, in time for the first encounter” when he gave his initial undertaking (see per Buckley LJ in Chanel’s case at page 493).
I turn to the defendant’s submission that his undertaking should be discharged because, on his case now, by December 1999 he had paid all amounts required by the terms of the hire purchase agreement on the footing the agreement had not been terminated, or purportedly terminated, by the plaintiff. I do not think it is appropriate to determine whether that will, or may likely, succeed or to entertain the declaration which the defendant seeks - they are matters for the ultimate trial where the issues can be more fully and properly explored in a way they cannot be on an interlocutory application such as this. However, in my opinion the application for the discharge of the undertaking, being founded at least in part on “new facts”, that is the payments made by the defendant in and after June 1999, which came into existence after the defendant’s initial undertaking was given, I have come to the view that it would be unjust to continue the defendant’s undertaking; to do so would be tantamount to requiring the defendant to contribute to a fund by way of a security for the plaintiff’s claim which, on the defendant’s now case, the defendant challenges. In June 1999 the defendant did not dispute that on his own version he had continuing obligations to the plaintiff pursuant to the hire purchase agreement, but that has now changed by reason of new facts.
I find therefore that, subject to the matter of the defendant’s undertaking to retain possession of and keep the equipment in good order and repair (and as to which I will hear counsel) the defendant’s undertaking should be discharged with effect from 31st January 2000.
Having reached this conclusion it is unnecessary to consider the defendant’s application in so far as it is based upon the asserted deleterious impact upon his business of continuing his undertaking.

[2000] SADC 68

5 June 2000