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[2016] ZAECPEHC 41
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Ukuboniswa Logistics And Engineering CC v Johnson Controls Automotives SA (Pty) Ltd (1183/2013) [2016] ZAECPEHC 41 (25 August 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE LOCAL DIVISION, PORT ELIZABETH)
CASE
NO.: 1183/2013
DATE:
25 AUGUST 2016
In
the matter between:
UKUBONISWA
LOGISTICS AND ENGINEERING
CC
.......................................................
Plaintiff
And
JOHNSON
CONTROLS AUTOMOTIVES SA (PTY)
LTD
................................................
Defendant
JUDGMENT
BESHE
J:
[1]
Plaintiff in this matter is suing defendant for damages arising out
of an alleged breach of an agreement that was entered into
between
the parties.
[2]
Over and above its plea, defendant raised two special pleas.
[3]
Following an agreement between the parties, I exercised my discretion
in favour of authorising the separation of issues as agreed
upon by
the parties. I ordered that the second special plea be separated from
the rest of the issues and that it should be adjudicated
first.
[4]
It is common cause that the parties entered into an agreement of
carriage in terms of which plaintiff was to transport defendant’s
goods. It is as regards that part of the agreement that concerns the
points of collection of goods and the destinations thereof
that the
parties seem to be at odds with each other. However that does not
have a bearing on the special plea concerned.
[5]
The point raised by the defendant by way of the special plea in
question is that the plaintiff lacks the legal standing to institute
the action in question against it by virtue of the fact that it
executed a deed of cession in favour of the Eastern Cape Development
Corporation (ECDC) and ceded all its rights to title and interest in
and to all its debts and claims, in fulfilment of plaintiff’s
obligation to Eastern Cape Development Corporation.
[6]
The existence of a deed of cession executed favour of ECDC
(cessionary) by the plaintiff is common cause. In terms of the deed
of cession plaintiff as the cedent, in fulfilment of obligations to
the cessionary (ECDC) in respect of a loan
“
cedes
to the Cessionary, unreservedly, all his right title and interest in
and to all progress payments, money, other debts, and
claims
whatsoever nature due and to become due to it by the employer”.
In the deed of cession, the “employer”
is given as
defendant in this matter.
[7]
In its reply to defendant’s second special plea, plaintiff
admitted the existence of the deed of cession as pleaded by
the
defendant. Denied that plaintiff was not vested with legal standing
to advance the claim against the defendant. In amplification
of the
denial that it was not vested of a legal right, plaintiff pleaded
that:
(i)
In terms of paragraph 2.3 of the cessionary ECDC nominated the
plaintiff as its authorised representative to collect and receive
all
payments relating to the contract in question.
(ii)
That written consent was sought from and granted by ECDC to institute
action against the defendant arising from defendant’s
alleged
breach in termination of the contract in question.
[8]
Clause 2.3
of the Deed of Cession
provides that
“
the cessionary (ECDC)
hereby nominates cedent (plaintiff) as its authorised representative
to collect and receive all payments relating
to this contract as
referred to in paragraph 3.1 (which the parties agree should read
2.1) above from the employer in terms of
a special power of attorney
executed by the cedent in favour of the cessionary”.
[9]
As regards second leg of plaintiff replication, correspondence
between plaintiff and those representing ECDC is attached. The
correspondence reveals that ECDC consented to plaintiff proceeding
with legal action against the defendant. The relevant part of
the
letter ends with
“
All our clients’
rights in terms of the deed of cession are reserved”.
[10]
There is no dispute regarding interpretation of the terms of deed of
cession as being a complete cession by the plaintiff of
its rights to
recover any money from defendant to ECDC. Put differently ECDC holds
a real right to claim the debt from the defendant.
This has the
effect of depriving the plaintiff of the legal standing to claim
payment from the defendant in terms of or flowing
from the agreement
entered into between it and the defendant.
[11]
Mr De La Harpe
for the defendant submitted that
Clause
2.3 of the Deed of Cession
which
nominates the defendant as cedent as the representative of ECDC to
collect and receive all payment relating to the contract
in question
cannot be interpreted to be clothing the plaintiff with
locus
standi
to sue the plaintiff in respect
of the agreement. He argued further that this interpretation will
entail that there is no cession
to speak of. Which in turn will
negate the cession entirely.
[12]
I agree that the interpretation contended for by the plaintiff in its
replication is untenable. It is only the cessionary who
has a right
to sue upon the contract as the party that has the legal standing to
do so. This is a position that was affirmed in
Standard
General Insurance Co. Ltd v Eli Lilly (SA) (Pty) Ltd, (FBC Holdings
(Pty) Ltd, 3
rd
Party)
1996 (1) SA 382
(W)
where it was held that a plaintiff who has ceded his claim before the
institution of action could not sue as agent for the cessionary.
Further that the plaintiff had divested itself of its rights in
respect of the claim. My attention to the matter of
Standard
General Insurance v Eli Lilly
supra
,
was drawn by
Mr
White
who was acting on behalf of the plaintiff. He submitted that
plaintiff was under the impression they could sue the defendant on
the basis of
Clause
2.3
and the written consent granted to them by ECDC (the cessionary). He
conceded, rightly so in view, that on the authority of
Standard
General Insurance
and
other authorities,
[1]
the two
grounds are not sufficient to clothe plaintiff with the right to sue
the defendant in respect of the agreement concerned.
[13]
Even on the basis of the written consent of the cessionary to the
cedent to proceed with legal action against the plaintiff,
it could
only do so as an agent of the cessionary and not in its own name as
rightly pointed out by
Mr De La Harpe
and conceded by
Mr
White
.
[14]
In the circumstances, defendant’s second special plea falls to
be upheld.
Accordingly
the following order will issue:
1.
Defendant’s second special plea is upheld.
2.
Plaintiff’s claim against the defendant is dismissed with
costs.
N
G BESHE
JUDGE
OF THE HIGH COURT
APPEARANCES
For
the Plaintiff : Adv: White
Instructed
by : CECIL BEYLEVELD ATTORNEYS
Room
512, Oasim South
Pearson
Street
Central
PORT
ELIZABETH
Tel.:
041 – 582 1695
Ref.:
C Beyleveld/ck
For
the Defendant : Adv: DH De La Harpe
Instructed
by : PAGDENS ATTORNEYS
Pagdens
Court
18
Castle Hill
Central
PORT
ELIZABETH
Tel.:
041 – 502 7200
Ref.:
RH Parker/djs/JOH94/0001
Date
Heard : 22 August 2016
Date
Reserved : 22 August 2016
Date
Delivered : 25 August 2016
[1]
Sentrakoop Handelaars Bpk v Laurens and Another
1991 (3) SA 540.