Johannesburg — WINEMAKER Nicolas Krone and his company, Twee Jonge Gezellen, are taking a dispute with the Land Bank to the Constitutional Court to challenge the principle of "paying up before arguing the validity of a debt".

Mr Krone is contesting a R37,9m debt with the Land Bank and says he owes only R20m.

He was not available for comment yesterday.

The Land Bank had obtained a provisional order from Judge Siraj Desai in the Cape High Court saying that Mr Krone and his company had to pay the bank R37,9m within two months. The case is to be heard on November 18.

In a Constitutional Court directive, Chief Justice Sandile Ngcobo last week ordered that the parties' arguments should address only whether it is constitutional that a provisional sentence can order a debtor to pay a creditor before the debtor can legally challenge the amount involved.

Judge Desai tried to address this matter when granting the provisional order in favour of the Land Bank on November 24 last year. He said the order to pay was a "special procedure designed" to assist a creditor who has prima facie proof of his claim, and was a speedy remedy without the expense and delay that an ordinary trial would entail.

He said that Mr Krone's company acknowledged the debt but challenged the amount, and that it was aware that the issue of a final settlement of R20m was subject to approval by the Land Bank head office in April 2008.

"There is no proof of acceptance of the offer by the plaintiff (Bank) ... furthermore, nowhere in the subsequent correspondence from the defendant's (Mr Krone's company's) legal representatives in reply to the Bank's demand for payment of the capital sum in terms of the acknowledgment of debt, is there any reference to a settlement," Judge Desai said.

Land Bank CEO Phakamani Hadebe said yesterday that several cases were being pursued through the courts because clients had taken advantage of the bank's problems and system failures and had chosen not to pay.

"We now have a competent legal division and credit monitoring systems to pursue such cases to proper conclusion."

Jerome Mthembu, the Land Bank's chief legal officer, yesterday said if the Constitutional Court ruled in its favour, it would have ammunition to resolve many outstanding cases.

An opposite ruling, however, would bog the Land Bank down in endless court battles.