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[2016] ZAGPPHC 224
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Dolphin Whisper Trading (Pty) Ltd v Born Free Investments 568 (Pty) Ltd (38117/15) [2016] ZAGPPHC 224 (24 March 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO: 38117/15
DATE:
24 MARCH 2016
DOLPHIN WHISPER
TRADING (PTY)
LTD
................................................................
APPLICANT
And
BORN FREE
INVESTMENTS 568 (PTY)
LTD
..........................................................
RESPONDENT
JUDGMENT
KHUMALO J
[1] In this
Application the Applicant is seeking an order compelling the
Respondent:
[1.1] to sign all
necessary documents in order to effect transfer of two immovable
properties into the Applicant's name;
IN THE
ALTERNATIVE:
[1.1] to make
payment in the amount of R2 000,000.00 (Two Million Rands)
[1.2] interest
thereon at the rate of 9% a tempore more;
[1.3] an order
declaring the immovable property executable in favour of the
Applicant.
[2] The Applicant
alleges his claim to have arisen from a written money lending
transaction that the parties concluded on 18 June
2013, in terms of
which the Applicant lent and advanced the Respondent an amount of R1
500 000.00 (One Million Five Hundrend Thousand
Rand) and in turn as
security for the repayment of the debt the Respondent registered a
bond over its two immovable properties
known as Portion 81 (Portion
of Portion 11), Registration Division IR, Mpumalanga Province and The
remaining Portion of Portion
11 (Portion of Portion 7) of the farm
Middelbult 235; Registration Division IR, Mpumalanga Province
("hereinafter rreferred
to as "the properties") in
favour of the Applicant.
[3] According to the
agreement the money was advanced to the Respondent for a period of 12
months within which the Respondent was
to repay it as an amount of R
2 000,000.00. On default the Applicant was entitled, either to hold
the Respondent responsible for
the repayment of the money or upon its
election, without any further ado, to take transfer of the properties
and give notice in
writing to the Respondent of its election who will
then sign the necessary documents for the transfer.
[4] After the lapse
of a 12 months period, on 19 November 2014, J A Parsons ("Parsons")
one of the two directors of the
Applicant sent a letter, a
notification of substitution of creditors directing the Respondent to
transfer the property into the
name of a company called Parsons
Transport Holdings ("Parsons") instead of that of the
Applicant,
[5] On 17 February
2015 the Applicant's attorneys sent a letter of demand to the
Respondent notifying Applicant, inter alia, of
the following:
[5.1] that they were
acting on behalf of the Applicant as well as of a company called
Parsons Transport Holdings (Pty) Ltd ("Parsons").
[5.2] that ail the
rights and obligations that Applicant had against the Respondent
emanating from the loan agreement have been
ceded /transferred to
Parsons.
[5.3] that as a
result of Respondent's default, their clients were giving notice to
the Respondent of their election, without further
notice, to take
transfer of the immovable properties and calling upon the Respondent
and its director Mr Lamprecht to give effect
to their election by
signing the necessary documents at the offices of the Respondent's
attorneys within 10 days of the notice
from the date of the letter.
[6] Soon afterwards
two sale agreements were presented to the Respondent for its
signature as the transferor whilst bearing the
name and signature of
Parsons as the transferee. In terms of the two agreements the
Respondent was selling to Parsons the immovable
properties each at a
purchase price of R750 000.00 to give effect to the loan agreement,
Applicant being substituted for Parsons.
On failure by the Respondent
to sign the documentation the Applicant proceeded with these motion
proceedings.
[7] In opposing the
application the Respondent raised two substantive defences in limine,
that:
[7.1] The Applicant
has divested itself of all its rights, title and interest it may have
had in terms of the loan agreement;
[7.2] the option to
purchase the property without further payment and notice that is in
the loan agreement is unenforceable as it
constitutes a pactum
commissorium which is void in South African Law.
[8] In its Replying
Affidavit the Applicant simply just denied that it divested itself of
the rights, title and interest it had
in terms of the loan agreement,
without addressing the letters substituting Parsons as the creditor
and notifying them of the cession
that were sent to the
Respondent and his
attorney. It also denied that the loan agreement constitutes a pactum
commisorium.
[9] Later in its
heads of argument that were filed on 18 August 2015, the Applicant
conceded that it has not dealt with the issue
of locus standi in its
Affidavits and undertook that should its locus standi remain in
dispute it will apply to file a supplementary
affidavit to
substantiate thereon.
[10] Subsequently on
19 February 2016, a few days before the set down on 7 March 2016 the
Applicant abandoned or waived the main
relief that it was seeking,
conceding to the pactum commissorium defence of the Respondent. The
matter proceeded on 9 March 2016
only on the alternative relief
sought, the monetary claim, against which the defence of the
Applicant's locus standi also remained.
[11] The Respondent
reiterated the defence at the beginning of the hearing by filing
supplementary heads of argument highlighting
also the attorney and
client costs it was seeking which were to include costs of senior
counsel as a punitive sanction for Applicant's
persistence with its
Application as it did. Applicant still did not respond or move for a
motion to file further affidavits to
address the prevailing issue of
its locus standi visa vis the cession raised in the papers.
LEGAL FRAMEWORK
LOCUS STANDI & CESSION
[12] The onus, that
is the duty to allege and prove locus standi in judiclo rests on the
party instituting the proceedings; See
Mars Incorporated v Candy
World {Pty) Ltd
[1990] ZASCA 149
;
1991 (1) SA 567
(A) at 575H-I; Trakman NO v Livshitz
1995 (1) SA 282
(A) at 287B-F. An objection taken in limine to the
locus standi of a plaintiff or applicant, like an exception, must be
dealt with
on the assumption that all the allegations of fact relied
upon are true; see Kuter v South African Pharmacy Board 1953 (2) 307.
[13] A cession
divests the cedent (a creditor) of its rights against a debtor
displacing its locus standi and subjecting the debtor
to another
creditor (cessionary).
[14] In Johnson v
Incorporated General Insurance Ltd
1983 (1) SA 318
(A), the
principles of cession are clearly defined as:
(a) an act of
transfer (oordragshandeling); see also Hippo Quarries (Tvl) (Pty)Ltd
v Eardley 1992{1) SA 867 (A) at 873E-F;
(a) to enable the
transfer of the right to claim (translatio juris) to take place;
© accomplished
by means of an agreement of transfer (ordragsoorenkoms)
(d) between the
cedent and the cessionary,
(e) arising out of a
justa causa
(f) From which the
intention of the cedent to transfer the right to claim and the
intention of the cessionary to become the holder
of the right appears
or can be inferred.
(g) The justa causa
is stated to be an obligatory agreement [verbintenisskeppende
ooreenkoms) that is between the debtor and the
cedent arising from,
for example:
1. An agreement of
sale; exchange; donation; or
2. A loan or
settlement agreement and or payment.
[15] This is the
obligation that Is transferred to the cessionary when a cession is
effected. The debtor is therefore an integral
part of the cession as
the obligatory agreement is in fact the causa of the cession
agreement. For that reason notice to the debtor,
even though it might
be considered not necessary, is crucial, since he has to tender his
performance to the cessionary (the new
creditor) henceforth; see
Johnson v Incorporated General Insurances Ltd
1983 (1) SA 318
(A) at
330H-331H. In Lynn & Main Incorporated v Brits Community
Sandworks CC(348/2007) [2008] ZASCA100 (17 September 2008)
it has
been held that "a cession of rights is ineffective as against a
debtor until such time as he has knowledge of it.'
Notice,
consequently completes (put the finishing touches to) the cession.
Notice is consequently the way in which substitution
of creditors is
finalised.
[16] It was held in
Botha v Fick
1995 (2) SA 720
(A) that "mere consensus is
sufficient to effect a cession" Also see Lawsa 2nd, vol 2, para
6. It is as a result not
necessary for the transfer agreement
(Cession) to be in writing, but advisable. Once cession is effected,
the cedent falls out
of the picture, his locus standi being destroyed
and the vinculum juris is between the debtor and the cessionary,
unless if the
cession is not of an interest in the claim but in the
result of the litigation, whereupon the locus standi to sue will
remain until
the result is achieved; see portion 1 of 46 Wadeville
(Pty) Ltd v Unity Cutlery (Pty).
[17] A person that
relies on a cession must allege and prove the contract of cession;
see Lief N Ov Dettmann
[1964] (2) All SA 448
(A),
1964 (2) SA 252
(A). This can be done by the production in evidence of an apparently
regular and valid cession, whereupon the evidentiary burden
shifts to
the party disputing the cession; see Hippo Quarries (Tv!) (Pty) Ltd v
Eardley
[1991] ZASCA 174
;
[1992] 1 All SA 398
(A);
1992 (1) SA 867
(A) 873.
ANALYSIS
[18] In challenging
the locus standi of the Applicant on the basis of the cession, the
Respondent had in its Answering affidavit,
supplied the pertinent
information that emanated from the Applicant which includes the
Notices of the transfer and substitution
of Parsons as the new
creditor and subsequent agreements. The information suffices as
ostensible proof of the Applicant's rights
to claim against the
Respondent having been transferred to Parsons. So besides carrying
the onus to prove the locus standi as the
party that has instituted
the legal proceedings, Applicant also carries the evidentiary burden
to establish facts that rebuts the
apparent cession as established by
the Respondent.
[19] Although locus
standi must be clear from the Founding Affidavit, since the challenge
of its legal capacity arose in the answering
affidavit, the Applicant
still had an opportunity to quell the challenge in its Replying
Affidavits, using that to its advantage.
Notwithstanding the
opportunity and advantage and being privy to the information upon
which the Respondent is challenging its locus
standi, the Applicant
failed in its Replying Affidavit to substantively address the issue
of the cession and its locus standi.
Neither the contents of its
notification letters nor the two agreements were explained. Instead
Applicant persisted in a denial
that is bare that it never divested
itself of the rights therein.
[20] The Respondent
therefore argued with reference to Plascon Evans Paints v Van
Reebeeck Paints
1994 (3) SA 623
(AD) at 634 that the issue falls to
be decided on the Respondent's version, read together with those
facts in the founding affidavit,
admitted by the Respondents which
facts Counsel argued lead to a conclusion that the Applicant was not
the holder of a right; The
two agreements and Notices were, inter
alia, cited as proof as far as the Respondent is concerned of the
Applicant having divested
itself of the rights, title and interest of
the claim against it. see Portion 1 of 46 Wadeville v Unity Cutlery
[1984] 1 All SA 260
(A),
1984 (1) SA 61
(A)
[21] Applicant's
Counsel argued that its denial that (the cession took place) it was
divested of its right to claim raises a dispute
of fact, therefore
the matter must be referred to oral evidence. It also alleged that
the two companies have the same directors
and shareholders.
[22] For a matter to
be referred to oral evidence the court must have found that a bona
fide dispute on a material fact has been
shown to exist; see Room
Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd
1949 (3) SA 1155
(T) at 1163. There is no response on behalf of the Applicant that
addresses the issues raised by the Respondent from which the
court
can be able to make out whether or not there is a genuine dispute of
facts. The Respondent's bare denial on the cession is
not
supportable. (Peterson v Cuthberts & Co, Ltd
1945 A.D. 420)
[23] It is therefore
due to the Applicant's failure to deal adequately with the
Respondent's allegations that the court cannot determine
the basis
upon which Applicant denies that cession took place to make out
whether or not a real dispute of fact exist. The Applicant
had failed
to discharge the evidentiary burden of showing that notwithstanding
the two sale agreements and the notifications sent
to the Respondent
regarding the transfer of its rights arising from the loan agreement
to Parsons, it still holds the right to
claim from the Respondent.
[24] Applicant's
allegations that it shares the same directors and shareholders with
Parsons lacks substance, as no further details
are provided to
explain why that is mentioned or how does that affect the facts on
cession as established by the Respondent. It
is therefore logically
unsustainable. The Applicant has as a result failed to discharge the
onus to establish that it has the necessary
locus standi to sue on
the basis of the loan agreement, thus failing to make a case for the
relief that it is seeking.
[25] The Applicant
has also been very reckless in the manner that it responded to the
contention raised by the Respondent. It must
have foreseen that on
its failure to prove its locus standi the application will be
dismissed. It was also warned adequately by
the Respondent of the
costs sought in the event of it persisting with the Application
without attending to the issue, it nevertheless
proceeded on the same
basis. Normally an order for costs on the attorney and client's scale
will be made only when there is a special
prayer for it or when
notice has been given that the order will be asked for Sooher v
Sooher
1957 (1)
SA 598
(W) at 600
D-E; Marsh v Odendeabrus ColdStrages Ltd 1963(2) SA 263 (W) at 269 H
[26] Under the
circumstances the following order is made:
THE ORDER
[26.1] The
Application is dismissed with costs on an attorney and client scale
that includes the costs of senior Counsel.
N V KHUMALO J
JUDGE OF THE HIGH
COURT
GAUTENG DIVISION:
PRETORIA
For the
Applicant: N VN VUUREN
Instructed by:
MARITZ SMITH VAN EEDEN INC
Tel: 012 342 0000
Ref: M4534.14 jss
For the
Respondent: L W De KONING
Instructed by:
GERHARD BOTHA & PARTNERS INC
Tel: 012 347 0480
Ref: Mr G H J
Botha/HB75-15