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[2016] ZAGPPHC 1129
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Nedbank Limited v Gent (39042/2009) [2016] ZAGPPHC 1129 (10 November 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
10/11/2016
CASE
NO: 39042/2009
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
REVISED
In
the matter between:
NEDBANK
LIMITED
PLAINTIFF
And
PHILIP
JOSEPH
GENT
DEFENDANT
JUDGMENT
HUGHES
J
[1]
The defendant and Springs Car Wholesalers CC (the Dealer) entered
into an agreement on 30 November 2005 termed a "Variable
Rate
Lease Agreement" (VRLA) where the defendant leased a new 2005
Renault Grand Scenic II Expression 2.0 motor vehicle (the
motor
vehicle).
[2]
The financing engine was "The Motor Finance Corporation"
(MFC) who had concluded a Master Discount Agreement dated
8 April
2003 (annexure 81 in the papers) with the Dealer to finance the VRLA
of the defendant. Herein the Dealers rights title
and interest were
ceded to MFC. MFC in turn concluded a Master Discount Agreement
(annexure 82) with Imperial Limited on 23 November
2001. In essence
Imperial Bank Limited financed MFC to finance the Dealer and as such
MFC's rights, title and ownership were in
fact that of Imperial Bank
Limited.
[3]
As Nedbank Limited had acquired Imperial Limited's entire
shareholding, MFC, Imperial Bank Limited and Nedbank Limited
concluded
an Addendum to the Master Discount Agreement on 27
September 2010. By doing so the rights, title, ownership and
obligations were
ceded from MFC, Imperial Bank Limited to Nedbank
Limited.
[4]
The plaintiff's, cited as Nedbank Limited, claims from the defendant
payment for arrears in terms of the VRLA entered into with
the
dealer, for the lease of the motor vehicle financed by MFC. Imperial
Bank Limited transferred its asset to Nedbank Limited
on 1 October
2010.
[5]
The plaintiff pleads that it derives its
locus
standi
in terms of a
number of cession agreement's which are covered by the VRLA between
the Dealer and the defendant; the Master Discount
Agreement '81'
between the Dealer and MFC; the Master Discount Agreement '82'
between MFC and Imperial Bank Limited and the eventual
absorption of
Imperial Bank Limited into the plaintiff, Nedbank Limited. The
plaintiff pleads further that the defendant was notified
of these
cessions.
[6]
The defendant disputes the locus standi of the plaintiff, the
authenticity and validity of the VRLA, the proof of B1 and 82
and the
cessions alluded to in B1 and 82, the defendant's knowledge of the
cessions and the defective nature of the motor vehicle.
[7]
The defendant from the outset submitted that B1 as an agreement
between the Dealer and defendant facilitates a cession but it
does
not amount to a cession and it only provides formalities in order for
the cession to take place. Likewise with 82 the agreement
between MFG
and Imperial Bank Limited.
[8]
At the trial the plaintiff called witnesses whilst the defendant
opted to close its case without adducing any evidence. I must
point
out that at the close of the plaintiff's case the defendant had
sought absolution from the instances which I refused after
a detailed
judgment delivered. The entire case, in my view, relies on the
interpretation of the two Master Discount Agreements
81 and 82.
[9]
The defendant argues that for the plaintiff to succeed it would have
demonstrated its
locus
standi;
prove B1 and
82 and the cessions it relies on together with their notification to
the defendant, as well as the authenticity and
validity of the VRLA.
[10]
Adv. Williams for the defendant premises his argument within the
confines of the Master Discount Agreements B1 and 82. He argues
that
there has been non-compliance with section 2.1.2 and 2.2 (with its
sub-paragraphs), in respect of B1 and sections 1.1; 1.3;
1.6 and 2
(inclusive of the sub paragraphs) in respect of B2. His emphasis
that B1 and B2 do not constitute cession agreements
but merely, as
set out in the section mentioned above set out the formalities to be
adopted to give effect to the cessions coming
about.
[11]
The argument that the plaintiff has not proven B1 and B2 in my view
holds no substance. Yes, the signatories to those documents
were not
called to testify however the documents are what they purport to be
as submitted by the plaintiff. Whether they constitute
cessions is
another issue which I address below.
[12]
The pinnacle of the plaintiff's case is that of cession and as such I
am mindful of that enunciated by Nienaber JA in
Hippo
Quarries (TVL) (PTY) LTD v Eardley
[1991] ZASCA 174
;
1992 (1)
SA
867
at 873E-F:
"Cession,
it is trite, is a particular method of transferring a right. The
transfer is effected by means of agreement. The
agreement consists of
a concurrence between the cedent's
animus
transferendi
of the
right and the cessionary's corresponding
animus
acquirendi.
If a
complete surrender of the right is not intended the transaction,
however it is dressed up, is not an out-and-out cession. The
aim is
to discover the true intention of the parties to the disputed
cession. That enquiry, like any enquiry into intention, is
a purely
factual one. If found to be feigned the simulation is disregarded."
[13]
From the same court, Supreme Court of Appeal later in 2009, Mpati P
had the following to say about cession in
Lynn
&
Main
Incorporated v Brits Community Sandworks
CC
[2008] ZASCA 100
;
2009 (1) SA 308
(SCA)
at para
[6]
:
“
[6]
It is trite that a cession is a method by which incorporeal rights
are transferred from on party to another.
[1]
It is an act of
transfer from a creditor, as a cedent, to the cessionary, of a right
to recover a debt (vorderingsreg) from a debtor.
[2]
Although it entails a
triangle of parties, viz the cedent, cessionary and debtor, the
cession takes place without the concurrence
of the debtor.
[3]
The transfer of the
right is effected by the mere agreement between the transferor
(cedent) and the transferee (cessionary).
[4]
Notice to the debtor
is not a prerequisite for the validity of the cession ‘but a
precaution to pre-empt the debtor from dealing
with the cedent to the
detriment of the cessionary.
[5]
”
[14]
Turning to deal with the relevant cessions in this matter with the
aforesaid in mind, I set out the relevant paragraphs of
B1 to assist
in illustrating why I conclude that in my view the plaintiff has not
complied with sections 2.2.2.1 to 2.2.2.5 of
B1 for a cession to have
come to the fore. I set out the relevant paragraphs of B1 below:
2
Offer and acceptance
2. 1
The
Dealer may
from
time to time offer:
2.1.1 …….
Paragraph
2.1.2 states
2.1.2
"to
assign the Dealer's rights and obligations
under
any or all of the Dealer Agreements to MFG by
furnishing
MFG with
a
completed
application form
furnishing
details of the applicant who is to conclude
a
Dealer Agreement with
the Dealer, a description of the Goods in question and other relevant
information in relation to the traction
in question."
And
Paragraph
2.2 especially 2.2.2 states as follows:
2. 2 MFG may, in its sole
discretion, accept or reject all or any of the Offers referred to in
clause 2.1("the Offers'').
2.2.1 ...
2.2.2
If MFG is
interest in pursuing
a
transaction in
terms of clause 2.1.2 then:
2.2.2.1
"
MFG
shall indicate such interest by sending to the Dealer an application
notification
in
terms of which MFG indicates its acceptance of the application
referred to in clause 2.1.2 (on the terms and conditions set out
in
the application notification);
2.2.2.2
on receipt
of the application notification,
if
the Dealer wishes to accept
the
terms embodied in such application notification
,
the Dealer shall within the time period stipulated in the application
notification furnish to MFG
a
copy of the
value added tax invoice
relating
to the Goods in question;
2.2.2.3
on receipt
of such value- added tax invoice,
MFG
shall, for and on behalf of
the Dealer
,
prepare the appropriate Dealer Agreement
and
any other relevant ancillary legal documentation required by MFG
to be concluded
between the Dealer and the Dealer Client, and furnish the aforesaid
Dealer
Agreement
and
any ancillary legal documentation to the Dealer for signature;
2.2.2.4
after
signature of the Dealer Agreement
and
any relevant ancillary legal documentation
,
the Dealer shall forward to MFG the original completed Dealer
Agreement
and
any relevant ancillary legal documentation in question,
as
well as the original value-added tax invoice
relation
to the Goods which are the subject matter of the Dealer Agreement;
2.2.2.5
on receipt
of the documentation referred to in
2.2.2.
4,
the
Dealer shall be deemed to have assigned to MFG, which shall be deemed
to have accepted the Dealer's rights and obligations under
the Dealer
Agreement
in
question, at the price agreed upon in writing between the Dealer and
MFG in respect of such transaction."
[
That underlined is my emphasis]
[15]
The aforesaid paragraphs of the Master Discount Agreement 81 cover
how one would give effect to the cession of the Dealer's
rights to
MFC. In essence these sections illustrate the formalities to be
adopted which culminate in a cession having taken place.
In
particular to assign the Dealer's rights and obligations to MFC,
section 2.1.2 specifically states that 'a completed application
form'
containing details of the applicant (in this instance it would be the
defendant), the description of the goods (in this instance
the motor
vehicle) and information on the transaction be furnished to MFC. The
Master Discount Agreement 81 goes further, in sections
2.2.2 and
2.2.2.1 to 5, by setting out the reciprocal duties upon MFC to
indicate its interest and acceptances, by way of sending
an
'application notification' to the Dealer, the Dealer on this
application notification then furnishes MFC with the value-added
tax
invoice certificate. A Dealer agreement prepared by MFC is completed
between Dealer and Dealer client and this together with
the
value-added tax invoice is forwarded to MFC. This completes the
process and the Dealer's rights are deemed to be assigned to
MFC.
[16]
The VRLA constitutes the value-added tax invoice and the Dealer
agreement concluded between the Dealer and the defendant as
Dealer
client as alluded to in section 2.2.2.3 to 5 is in the form of MFC
contract Acc. No: GENTPJ05113737 (MFC Contract). This
does not
detract from the non compliance on the part of MFC and the
Dealer in respect of that set out in sections 2.2.2.1
and 2.1.2
respectively, to conclude the cession.
[17]
On my assessment, there is no
application
notification
from MFC
of its interest to the Dealer in terms of 2.2.2.1 and there is no
completed application form which was supposed to be furnished
to MFC
as required in 2.1.2
supra.
As I have alluded to
above there is compliance with 2.2.2.2 on the part of the Dealer, as
a value-added tax invoice in the form
of the VRLA was transmitted to
MFC and the Dealer agreement was also transmitted to MFC. Section
2.2.2.4 makes provision for the
original Dealer agreement together
with the original value-added tax invoice to be transmitted to MFC.
In this instance evidence
was adduced by the plaintiff that in fact
fax transmissions of that required were transmitted to MFC. Even so,
this ultimately
resulted in the defendant taking delivery of the
motor vehicle as MFC agreed to finance the deal. Thus the fax
transmission was
sufficient to render substantial compliance.
[18]
In light of that set out above I am of the view that there was
however substantial compliance with the formalities set out
in the
Master Discount Agreement 81. The intention of the parties to engage
in a cession is borne out by the agreements (that is
exhibit B, the
MFC Contract, the VRLA and 81) together with the conduct of the role
players. In my view, the intention to cede
between the Dealer and MFC
was established by the plaintiff and as such this is sufficient to
conclude that there was a cession
between the Dealer and MFC. See
Marcus v Stamper and
Zoutendijk
1910 AD 58
at
75.
[19]
The crux of Adv. Williams' argument as regards the Master Discount
Agreement 82 centres around the fact that the agreement
places
emphasis on written approval of Imperial Bank Limited to MFC and in
furnishing the interest rate in writing as well. Thus
the cession
which is the cornerstone of plaintiff's case, so the plaintiff's
argument goes, has not been proven before this court.
Additionally
having failed to prove the cession from the Dealer to MFG they have
failed to prove the cession from MFC to Imperial
Bank Limited.
[20]
In my view, there was a clear intention to cede between MFG and the
defendant from the signed MFG Contract. It's convenient
to point out
that the MFC Contract signed by the defendant at the dealer's
premises makes provision for the transfer of MFC rights
and
obligations to another party at paragraph [18] which states as
follows:
"[18]
...
You
agree
..
.that
we may transfer our rights and /or obligations to anyone, in which
case you agree to hold the Goods on behalf of, and to fulfil
your
obligations to, such other persons.”
[21]
With the aforesaid in mind, this MFC Contract in itself, in my view,
would amount to the notification to the defendant as signatory
to the
contract of MFC's future intention to cede and this defence raised by
the defendant being overly technical must fail. See
Lynn
&
Main
Incorporated v Brits Community Sandworks
CC
supra at para [16].
This then covers MFG
having notified and stated its intention, to the defendant, of a
cession, to be in the future.
[22]
Now as regards the dealer and the defendant. The VRLA and the MFG
Contract signed by the defendant are to be taken as one as
stated in
the VRLA by virtue of the paragraph below which appears in the MFC
Contract:
"We
the Lessor let to you the Lessee, who lets from us, the goods
described below ("the Goods') upon the conditions of
this
agreement ("this Agreement').
This
Agreement includes this Schedule and the folder of standard terms and
conditions
."
[23]
As both the VRLA and the MFC Contract taken as one, that being the
case, in the definitions section of the MFC Contract there
is the use
of the word
"us"
this, in my view, is
indicative that the schedule signed between the defendant and
"us",
the reference to
"us"
must only denote the
Lessor. The conclusion to be reached in this instance is that the
defendant was informed and notified by the
Dealer and MFC of the
intended cessions, by way of the MFC Contract and VRLA combined.
[24]
There was delivery of the motor vehicle to the defendant which amount
to compliance as required for the cession of ones rights,
title,
interest and ownership, in this instance, in the motor vehicle. See
Absa Bank Ltd v
Myburgh
2001 (2) SA 462
(W) at 466A-G.
[25]
The Master Discount Agreement 82 between MFC and Imperial Bank
Limited sets out at paragraph 1.3 the intentions between the
parties
of the cession of MFC's rights and obligations in terms of the Dealer
agreement and the MFC agreement. As set out below:
"1.3
It is intended that the Bank will, from time to time, purchase from
MFG all the rights and obligations of MFG in terms
of the Dealer
Agreements and in terms of the MFG Agreements ( collectively "the
Discounted
Agreements'
)...
"
[26]
As stated in
Marcus
supra,
as long as the
intention to cede is genuine and proven then cession is deemed to
have taken place. In this instance, by way of the
Master Discount
Agreement 82 the intention to cede to my mind was evident of a
cession, genuine and proven. The addendum to the
Master Discount
Agreement 82 makes provision for the transfer from Imperial Bank
Limited to the erstwhile plaintiff, Nedbank by
the plaintiff
attaining Imperial Banks entire shareholdings.
[27]
In conclusion I duly find that indeed the relevant cession has taken
place and as such the defendant is liable to pay the plaintiff
in
respect of the claim as set out in the particulars of claim and
verified in the certificate of balance attached.
[28]
The costs are to follow the result; provision of the scale thereof is
set out in the MFC Contract being an attorney and client
scale.
[29]
Consequently I make the following order:
[1]
The defendant, PHILIP JOSEPH GENT, is ordered to pay the plaintiff,
NEDBANK LIMITED, an amount of R149 680.74.
[2]
Interest on the amount in prayer 1 at the rate of 6.761% per annum,
compounded monthly, from 21 August 2015 to date of final
payment;
[3]
Costs of the action, including all reserved costs, to be taxed on a
scale as between attorney and client.
_______________________
W
HUGHES J
JUDGE
OF THE HIGH COURT, GAUTENG DIVISION, PRETORIA
APPELLANT'S
REPRESENTATIVES
ADVOCATE
: ADV. R
RAUBENHEIMER
INSTRUCTING
ATTORNEY
: VEZI &
DE BEER INCORPORATED
C/0
: EHLERS
INCORPORATED
RESPONDENT'S
REPRESENTATIVES
ADVOCATE
: ADV. D
L WILLIAMS
INSTRUCTING
ATTORNEY
: MANFRED
JACOBS ATTORNEYS
C/O
: MEGAW
VAN JAARSVELD ATTORNEYS
[1]
Hippo Quarries (Tvl)(Pty)
Ltd v
Eardley
[1991] ZASCA 174
;
1992 (1) SA 867
(A) at 873E-F;
Uxbury
Investment (Pty) Ltd v Sunbury Investments (Pty) Ltd
1963
(1) SA 747
(C) at 752A.
[2]
Johnson v Incorporated General Insurances Ltd
1983 (1) SA 318
(A) at 330H – 331H.
[3]
Lawsa
2
nd
, vol 2, para
6.
[4]
Johnson v Incorporated General Insurance
, fn 3
at 331H.
[5]
Lawsa
, fn 4, para 6.