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[2012] ZAGPPHC 85
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Amplisol (Pty) Ltd v Gerhard Van Der Merwe Attorneys (36409/2011) [2012] ZAGPPHC 85 (13 April 2012)
NOT
REPORTABLE
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG, PRETORIA)
Case
No: 36409/2011
Date
heard: 20/02/2012
Date
of judgment: 13/04/2012
In
the matter between:
Amplisol
(Pty)Ltd
......................................................................................................
APPLICANT
and
Gerhard
Van Der Merwe
Attorneys
.....................................................................
RESPONDENT
JUDGMENT
DU
PLESSIS J:
Based
on the contention that the respondent, a firm of attorneys, is
unlawfully collecting debts from the applicant's debtors, the
applicant applies for declaratory, interdictory and related relief.
The application concerns the "Unifer Loan Book",
a
collective name for a large number of debts that respective debtors
owed to Absa Bank Ltd (Absa) and to two other entities
1
.
In terms of a written contract Absa appointed a company called
Maravedi Credit Solutions (Pty) Ltd (Maravedi) to collect the Unifer
Loan Book on Absa's behalf. (i shall refer to this written contract
as the "Maravedi contract".)
Maravedi
in turn appointed the respondent
2
to collect, among other debts, the Unifer Loan Book. This was done by
way of a written contract dated 20 November 2009 ("the
collections contract").
On
4 August 2010 Absa and the two other entities sold, with effect from
30 June 2010, the Unifer Loan Book
3
to the applicant (i shall refer to this sale as "the Unifer
sale"). In terms of the written Unifer sale Absa and the
other
two entities ceded their rights in the respective agreements
comprising the Unifer Loan Book (their rights as creditor against
the
respective debtors) to the applicant. The Unifer sale was subject to
suspensive conditions that of necessity also applied to
the cession.
After
the Unifer sale the applicant notified the respondent thereof and of
the cession. The applicant also sought to enter into
a collections
agreement pertaining to the Unifer Loan Book with the respondent.
These negotiations came to nought. On 28 February
2011 the
applicant's attorneys wrote to the respondent and requested it to
hand over to the applicant the files pertaining to those
debts that
had been sold to the applicant
4
.
The respondent refused and still refuses to hand over the files. The
refusal prompted this application. The respondent contends,
first,
that its instructions from Maravedi to collect the relevant debts
have not been terminated. In the second place it contends
that it has
a right of retention over the files as Maravedi still owes it fess in
respect thereof.
The
applicant initially brought an urgent application seeking an order
compelling the respondent to hand over the files. By agreement
the
court hearing the urgent application made an interim order
regulating, pending this matter, the parties' relevant conduct
pertaining to the collection of the Unifer Loan Book.
I
shall now deal with each of the orders that the applicant seeks.
In
the first place the applicant seeks an order declaring that, pursuant
to the Unifer sale, it became to owner of the debts known
as the
Unifer Loan Book. At the risk of being pedantic, I point out that the
question is not whether the applicant became the owner
of the
relevant debts. The question is whether, pursuant to a valid cession,
it became the creditor of each of the debtors comprising
the Unifer
Loan Book. In a nutshell, did Absa and the other entities cede their
rights as creditors to the applicant?
Clause
3.1 of the written Unifer sale provides that the "Vendors hereby
sell, cede and assign and the Purchaser purchases and
accepts the
sale,
cession
and assignment, with effect from the Effective Date but subject to
the fulfilment of the Suspensive Conditions ..."
the rights of
each of the sellers against each of the debtors comprising the Unifer
Loan Book. The effective date under the Unifer
sale was 30 June 2010.
It follows that, once the suspensive conditions had been fulfilled,
the applicant became the creditor of
each of the debtors with effect
from 30 June 2010
5
.
In
the founding affidavit the applicants avers that all the suspensive
conditions have been fulfilled. On its own evidence the respondent
initially sought to enter into an agreement with the applicant to
collect on its behalf the Unifer Loan Book. On its own evidence
Maravedi confirmed to the respondent that the applicant is entitled
to receive collections made in respect of the Unifer Loan Book.
Despite the fact that the respondent has for some time been aware of
the Unifer sale and despite the fact that the respondent's
conduct
shows that it knew about and accepted the cession, there is in the
answering affidavit a practically bald denial that the
suspensive
conditions have been fulfilled. The respondent bases the denial
thereon that it has not had an opportunity to inspect
the
documentation pertaining to the fulfilment of the conditions. The
applicant attached to the replying affidavit written confirmation
by
Absa that ail the conditions have either been fulfilled or waived.
The respondent did not seek to respond thereto and that resolves
the
factual dispute, to the extent that the respondent's denial created
such. For reasons that will become apparent, I shall nevertheless
pay
more attention to the fulfilment of one of the suspensive conditions.
Clause
2.1.4 of the Unifer sale provides that it is a suspensive condition
thereof that "Absa Bank Limited obtains the written
consent from
Maravedi to the assignment of ...
6
its rights and obligations under the Maravedi Agreement to the
Purchaser, alternatively if Absa Bank Limited confirms by written
notice to the Purchaser that it is unable to procure such assignment
to the Purchaser, the execution by Absa Bank Limited and the
Purchaser of the Vendor Services Agreement more fully contemplated in
clause 2.3 below Clause 2.3 of the Unifer sale provides:
"To the
extent that Absa Bank Limited cannot procure the assignment of the
Vendors' rights and obligations under the Maravedi
Agreement to the
Purchaser as notified in writing by the Vendors to the Purchaser...
the parties agree that they will negotiate
a written agreement in
terms of which Absa Bank Limited will attend to the collection of the
Unifer Loan Book on behalf of the
Purchaser until 30
th
November 2010." The essence of this "condition" is
that Absa would endeavour to procure Maravedi's continued services
to
collect the Unifer Loan book failing which Absa would continue until
30 November 2010 to collect the Unifer Loan Book. The clear
implication is that Absa would until the said date continue to allow
Maravedi to do the collections in the terms of the Maravedi
contract.
The significance of the date 30 November 2010 is apparent from clause
1 of the Unifer sale that defines that Maravedi
Agreement as one that
expires "on or about 30 November 2010". In the papers the
applicant avers that the Maravedi contract
expired on 30 November
2010.
From
the above it follows that it was not a true condition that Absa had
to procure Maravedi's permission to cede its rights and
assign its
obligations under the Maravedi contract to the applicant; it was a
term of the Unifer sale. Reading the relevant clauses
as a whole, the
parties to the Unifer sale agreed that Absa would endeavour so to
cede and assign its rights and obligations. If
it failed, the Unifer
sale would not fail because the Maravedi contract terminated on 30
November 2010.
In
its opposing papers the respondent sought to deny, in the face of the
applicant's allegation, that the Maravedi contract terminated
on 30
November 2010. The point, however, is that the parties to the Unifer
sale contracted on the agreed basis that the Maravedi
contract
terminated on 30 November 2010. Whether it actually so terminated is
beside the point because the "condition"
contained in
clause 2.1.4 read with clause 2.3 was only to operate until 30
November 2010. After that date the Unifer safe was
to proceed whether
Maravedi consented or not.
It
is concluded that Absa and the other entities duly ceded their rights
under the Unifer Loan Book to the applicant and that, at
least from
30 November 2010, the applicant was entitled to collect the
individual debts owing to it as a result of the cession.
As
to the declaratory order that the applicant seeks it is of note that
in terms of the Unifer sale the applicant bought the "Unifer
loan book owned by the Vendors as at the Effective Date {30 June
2010)
to the exclusion of the Excluded Accounts
". (I have
added the words in italics and also the underlining.) The "Excluded
Accounts" are also defined in the
Unifer sale. The fact that
certain debts were excluded from the Unifer sale must be reflected in
the declaratory order.
The
applicant also seeks a declaratory order that the respondent "has
no rights in respect of the Unifer Loan Book". The
further
orders that the applicant seeks are ail ancillary to this declaratory
order in that they seek that the respondent accounts
to the
applicant, hands over the relevant files to the applicant and desists
from interfering with the applicant's collection of
the relevant
debts. It is convenient to deal simultaneously with the applicant's
entitlement to all these orders.
The
respondent's case in essence is that its collections contract with
Maravedi has not been cancelled. Accordingly, it contends,
it is
entitled to continue collecting the Unifer Loan Book under that
collections contract. In argument Mr Erasmus for the respondent
submitted that when it entered into the collections contract with the
respondent, Maravedi acted as agent for the creditor, Absa.
Accordingly, the argument continued, the collections agreement
limited Absa's rights as creditor under the Unifer Loan Book. Absa
could thus, so it was argued, only cede to the applicant, its rights
as creditor subject to the respondent's rights to collect
the
relevant debts.
The
collections contract itself does not show that Maravedi acted as an
agent for Absa when it appointed the respondent to collect
the Unifer
Loan Book. There also is no evidence of such an agency. On the
contrary, the evidence shows that Absa appointed Maravedi
and that
Maravedi in turn appointed the respondent as attorneys.
In
any event, the Unifer Loan Book comprises a multitude of contracts
between Absa and each of the relevant debtors. Absa's rights
as
creditor under those agreements were ceded to the applicant. The
respondent was not in terms of any of those contracts appointed
to
collect the relevant debts. Its appointment was made in terms of a
separate agreement (the collections contract). The collections
contract did not limit any of Absa's rights as creditor against its
debtors. Therefore, it is with respect not so that the collections
contract limited the rights that Absa ceded to the applicant.
The
question really is whether there is any reason why the applicant is
in law bound to the collections contract to which it is
no party. As
a general proposition personal rights flowing from a contract bind
only the parties to the contract. There are exceptions,
but the
respondent did not show that any of those exceptions apply here and
that the applicant is somehow bound by the terms of
the collections
contract.
As
a general rule an attorney's mandate is terminable at any time. Mr
Erasmus referred me to authority
7
for the proposition that, where the holder of a mandate has a
distinct interest therein that he, and no one else, carries out the
mandate, the mandate is not freely terminable. The proposition does
not apply here: Apart from its entitled to remuneration, the
respondent has no distinct interest that the Unifer Loan Book must be
collected. I have not been referred to authority for the
proposition
that a mandatory's hope of earning remuneration renders the mandate
not freely terminable. What is required for the
first proposition, is
a legal interest in the subject matter of what has to be done under
the mandate.
In
the opposing papers the respondent contends that it is by virtue of a
lien entitled to retain possession of the files until Maravedi
has
paid its remuneration. Mr Erasmus did not advance this argument but,
properly, referred me to authority that an attorney's
lien in respect
of documents is a debtor creditor lien that operates only as between
the relevant debtor and creditor.
8
A
last remark may not be out of place. Whether Maravedi has properly
terminated the respondent's mandate does not appear from the
papers.
The respondent alleges that Maravedi owes it money. That need not be
and is not decided in this case. The contractual relationship
between
the respondent and Maravedi does not affect the applicant's right to
collect money from its debtors.
I
have pointed out that the applicant brought an urgent application for
relief similar to that sought in this application. The parties
agreed
to an order that regulates the interim position pending this
application. The costs of the urgent application were reserved.
The
respondent contends that the applicant must pay those costs because
it did not obtain the order it sought there but only the
order made
by agreement. The contention is ill founded. By agreeing to a
sensible interim solution, the applicant did waive its
rights to the
relief it actually sought. The result of this application vindicates
the applicant's contention that the respondent
must deliver the files
to it and must desist from collecting the Unifer Loan Book. In my
view the costs of the urgent application
must follow the result of
this application.
In
this application the applicant sought costs against the respondent on
a scale as between attorney and own client. The relief
was sought on
the basis that, in the course of the dispute between the parties, the
respondent notified debtors that the applicant
was acting
fraudulently by asserting that it is the cessionary of Absa. Coming
from an attorney who should have known better than
to vilify an
opponent, the conduct was reprehensible indeed. As a mark of this
court's disapproval the respondent should in my
view be ordered to
pay the costs as between attorney and client. The applicant was
represented by senior counsel and his costs
should in my view be
allowed in view also of the importance of the matter. I may add that
the respondent was also represented by
senior counsel who, in its
case, was assisted by junior counsel.
In
the result the following orders are made:
1.
It is declared that the applicant is the creditor in respect of the
debts known as the Unifer Loan Book as defined in the Unifer
Loan
Book Agreement annexed to the founding papers as Annexure "AS3".
2.
It is declared that the respondent has no rights in respect of the
Unifer Loan Book as defined in the Unifer Loan Book Agreement
annexed
to the founding papers as Annexure "AS3".
3.
The respondent is ordered, to the extent that it has not done so, to
render a fuli account to the applicant within 30 (thirty)
days of
date of this order of ail collections performed by it from 1 December
2010 in respect of the Unifer Loan Book as defined
in the Unifer Loan
Book Agreement annexed to the founding papers as Annexure "AS3"
4.
The respondent is ordered, to the extent that it has not done so, to
deposit all moneys collected by it in respect of Unifer
Loan Book as
set out in paragraph 3 above in a bank account pending an action to
be instituted, if necessary, by the applicant
against the respondent
for payment of all moneys collected by the respondent as aforesaid.
5.
The respondent is interdicted from interfering with the applicant's
collection of debts forming part of the Unifer Loan Book
as defined
in the Unifer Loan Book Agreement annexed to the founding papers as
Annexure "AS3".
6.
The respondent is ordered within 10 (ten) days of date of this order
to deliver to the applicant any documentation in its possession
pertaining to the Unifer Loan Book as defined in the Unifer Loan Book
Agreement annexed to the founding papers as Annexure "AS3".
7.
The respondent is ordered to pay the costs of the urgent application
brought under this case number on 25 October 2011.
8.
The respondent is ordered to pay the costs of this application, to be
taxed as between attorney and client, including the costs
of senior
counsel.
B.R.
du Plessis Judge of the High Court
On
Behalf of the Applicant: Couzyn Hertzog & Horak
321
Middel Street Broooklyn Pretoria
Adv.
B.H. Swart SC
On
Behalf of the Respondent: Lamham-Love Attorneys
Lombard
Muller & Partners 7 South Street Menlo Park Pretoria
Adv.
M.C. Erasmus SC Adv. D.J. Van Heerden
1
The
interest of the other two entities is insignificant and the parties
primarily referred to Absa as being the creditor.
2
I
have pointed out that the respondent is a firm of attorneys.
3
Certain
debts were excluded. I shall return to that.
4
The
respondent was on 8 December 2010 sent a list of the relevant files.
5
A
suspensive condition is fulfilled retrospectively.
6
In
the Unifer sale the word "the" appears here. The evidently
is a typographical error.
7
See
Van Niekerk v Van Noorden
(1900) 17 SC 63
8
Amler's
Precedents of Pleadings,
p.
226.