Frank v Premier Hangers CC (11821/05) [2007] ZAWCHC 21; 2008 (3) SA 594 (C); (15 May 2007)

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[2007] ZAWCHC 21
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Frank v Premier Hangers CC (11821/05) [2007] ZAWCHC 21; 2008 (3) SA 594 (C); (15 May 2007)

in
the high court of South Africa
(cape
of good hope provincial division)
Case
No 11821/05
In
the matter between:
deon
stuart frank Excipient (Plaintiff)
and
premier
hangers cc Respondent (Defendant)
judgment:
delivered 15 may 2007
Griesel
J:
Introduction
This
is an exception noted by the plaintiff against the defendant’s
plea and counterclaim on the grounds that the said pleadings
do not
disclose a defence or a cause of action; alternatively, that they
are vague and em­barrassing. It raises legal issues
of some
complexity and I am indebted to counsel on both sides for the very
full and helpful arguments submitted by them.
The
claim arises against the following background: The plaintiff, Mr
Deon Stuart Frank, was a director and 50% share­holder
in D S
Frank & Associates (Pty) Limited (in liquidation) (
the
com­pany
). The company was placed in provisional liquidation
by an order of this court on 6 July 2004, which order was made final
on 17
August 2004. Prior to its winding up, the company conducted
business in the engineering, production, maintenance and repair of

specialised industrial and other related products. The defendant,
Premier Hangers CC, which conducts business as a manu­facturer
and whole­saler of,
inter alia
, plastic hangers, was one
of the com­pany’s customers. In the course of this business
relationship, the company rendered
specialised engineering services
to the defendant from time to time, involving work to some of its
moulds and related equipment.
At the date of winding-up the
defendant allegedly owed the company an amount of R238 927.58
in respect of such work.
On
11 November 2005, the plaintiff concluded a written agreement with
the joint liquidators of the company in terms of which the
liquidators purported to cede to the plaintiff ‘the entire right,
title and interest in and to any claim that [the company] has
or may
have in future’ against certain debtors of the company, including
the defendant. In return, the plaintiff under­took
to pay to the
liquidators ‘compensation’ of 10% of the amounts collected and
received from the debtors concerned, after deduction
of his legal
expenses.
The
pleadings
Relying
on this cession the plaintiff, on 17 November 2005, launched the
present action against the defendant, claiming payment
of the
above­mentioned amount of R238 927.58. The composite claim
arises from nine separate trans­actions in respect
of
‘specialised engineering services’ rendered and moulds supplied
by the company to the defendant during 2002 and 2003. In
each
instance, the plaintiff alleges that the company had ‘duly’
performed the services in terms of the respective contracts
and,
accordingly, claims the full contract price.
In
its plea, the defendant raises various defences
in rem
against
the plaintiff’s claims, based mainly on alleged defective,
incomplete and/or late perform­ance rendered by the company.
The
details of those defences are not relevant for present purposes.
What
is
relevant, is the defendant’s denial of the validity
of the cession on which the plaintiff’s claims are based and hence
his
locus standi
to sue. In amplification of its denial, the
main grounds of this defence are pleaded in the following terms:
‘
3.2 At
all material times prior to 11 November 2005 and at the
time of the execution of the cession on which Plaintiff relies
herein
(“
the cession
”), Plaintiff and the joint liquidators of
the Company were aware, or should reasonably have been aware:
3.2.1 Of all of the
facts and allegations set out in Defendant’s Counter­claim
filed herewith; and/or
3.2.2 That
Defendant had a claim for breach of contract against the Company
greatly exceeding the amount of the claims purportedly
ceded to
Plaintiff (“
the Company’s claims
”); and
3.2.3 In the event
of the joint liquidators issuing summons against Defendant to enforce
the Company’s claims, Defendant would have
instituted its
Counterclaim, with the result that their own action would have been
stayed; and
3.2.4 That at all
material times there existed a mutuality of claims and/or reciprocity
of debts between the Defen­dant’s Counterclaim
and the
Company’s claims and/or between the contractual obligations giving
rise thereto; and
3.2.5 That
upon judgment being granted in favour of Defendant in respect of its
Counterclaim, the Company’s claims would have been
defeated and/or
rendered ineffectual by virtue of the application of the principles
of set-off and/or
compensatio
; and
3.2.6 That
if the cession could be validly effected on the terms intended by
Plaintiff and the joint trustees [
sic
– should be
‘liquidators’], Defendant’s Counter­claim could be rendered
ineffective, inasmuch as Defendant would retain
only a concurrent
claim against the Company in liquidation whilst being obliged to
defend Plaintiff’s action for the Company’s
claims;
3.3 Plaintiff and
the joint liquidators accordingly effected the cession fraudu­lently,
or in bad faith, and with the intention
and/or purpose of:
3.3.1 depriving
Defendant of its right to raise its Counterclaim in reconvention;
and/or
3.3.2 rendering
Defendant’s Counterclaim ineffectual.’
In
the premises, so the defendant pleads, ‘the cession is invalid,
illegal, contrary to public policy and unenforceable’. In
the
alternative, the defendant claims that, should it be held that the
cession is indeed valid, then, by virtue of the facts pleaded
in
paras 3.2 and 3.3, the defendant is entitled (a) to raise its
counter­claim in recon­vention to the plaintiff’s
claims;
and (b) to set off any amount found to be owing by the
plaintiff to the defendant in terms of such claim in reconvention
against any amounts found to be owing by the defendant to the
plaintiff under the ceded claims. The defendant accordingly asks
that the plaintiff’s claims be dismissed with costs;
alternatively, that judgment in respect of the plaintiff’s claims
be
postponed until judgment on the defendant’s counterclaim has
been given.
In
its counter­claim the defendant claims payment of a total amount
of R499 445.77 as damages allegedly suffered by it
as a result
of the company’s breach of its obli­gations in terms of the
relevant contracts. After setting out the necessary
factual
allegations with regard to each individual transaction, the basis
for the counterclaim is pleaded as follows:
‘
28. By
virtue of the facts pleaded in paragraphs 3.2 and 3.3 of Defendant’s
Plea, and only in the event of the above Honourable
Court finding
that the cession pleaded by Plaintiff in paragraph 6 of its
Particulars of Claim (“the cession”) is valid and enforceable,
Defendant pleads that:
28.1 Defendant’s
Counterclaim is reciprocal to Plaintiff’s claim in convention and
is enforceable against Plaintiff, who is in
law obliged to defend
same;
28.2 Plaintiff is
therefore liable for the payment to Defendant of the aforesaid amount
of R499 445,77, plus interest and costs.
29. In the
alternative and only in the event of this Honourable Court finding
that Plaintiff is not liable to pay Defendant the full
amount of
R499 445.77, plus interest and costs, Defendant pleads that, by
virtue of the facts pleaded in paragraphs 3.2 and
3.3 of Defendant’s
Plea and only in the event of the above Honourable Court finding that
the cession is valid and enforceable,
it is entitled in law to raise
its Counterclaim against Plaintiff and to an order declaring
Plaintiff’s claim in convention to
be extinguished by virtue of
set-off of Plaintiff’s claim in convention against the aforesaid
amount of R499 445,77.’
In
essence, therefore, the defendant attacks the validity of the
cession on the basis that the cession burdened its position as
debtor in that it precluded the defendant from obtaining set-off of
its counterclaim against the insolvent cedent.
The
exception
In
his exception to the counterclaim, the plaintiff avers that it was
the consequences of the
concursus creditorum
,
and
not
the execution of the cession, that deprived the defendant of its
counterclaim against the company. The plaintiff accordingly denies
that he became liable to defend the defen­dant’s counterclaim
against the company. Furthermore, since the defen­dant’s
counterclaim was not liquidated and pay­able prior to the
establishment of the
concursus credi­torum
, set-off of
the defendant’s counterclaim against the company’s claims (as
reciprocal debts) cannot occur. In these circumstances,
so it is
con­tended, the defendant is not entitled to the relief sought
in prayer (b) of the plea (i.e. a stay of proceedings),
nor is the
defendant entitled to raise its claim against the company as a
counter­claim against the plaintiff. In any event,
so the
argument goes, the defendant as debtor is not entitled to institute
a counterclaim against the cessionary which exceeds
the amount of
the ceded claim. For these reasons, the plaintiff contends that the
defendant’s plea does not disclose a defence
and that its
counterclaim does not disclose a cause of action.
The
exception also raises a complaint that the defendant’s pleadings
are vague and embarrassing on the basis that it is uncertain
from
the pleadings whether the defendant’s alleged counterclaims
against the plaintiff arose prior to the commencement of the
concursus creditorum
. Clearly, if such claims only arose
subsequent to the
concursus
, then the defendant could not
rely thereon by way of set-off or counterclaim.
In
order to succeed in its exception, the plaintiff has the onus to
persuade the court that, upon every interpretation which the
defendant’s plea and counterclaim can reasonably bear, no defence
or cause of action is disclosed. Failing this, the exception
ought
not to be up­held.
1
Although
there is some ambiguity in the defendant’s pleadings in this
respect, I am satisfied that it is possible to read the
plea and
counterclaim as alleging that the defendant’s alleged illiquid
claims against the plaintiff did indeed arise prior to
the
commencement of the
concursus credi­torum.
It follows,
therefore, that the exception raised on the basis of the plea being
vague and embarrassing cannot be sustained.
In
order to consider the validity of the substantive exception and the
contentions underlying it, it is necessary first of all to
examine
the nature of the legal relationships between the various parties.
This will be considered under the following headings,
namely –
the
rights and obligations existing between the company and the
defendant prior to winding-up;
the
effect of the winding-up of the company on the rights between the
company and the defendant; and
the
effect of cession to the plaintiff of the company’s rights
vis-à-vis the defendant.
The
rights and obligations between the company and the defendant
Although
the plaintiff’s claims are presented in the particulars of claim
as liquidated contractual claims in respect of services
‘duly’
performed, it is apparent from the pleadings as a whole that the
claims arise in respect of specialised engineering
services rendered
by the company to the defendant at its special instance and request.
As such, the underlying contracts are instances
of
locatio conductio operis
.
In
BK Tooling (Edms) Bpk v Scope
Precision Engineering (Edms) Bpk
,
2
Jansen JA set out the following principles in relation to this type
of contract:
(a) As
with contracts of sale, the obligations under
locatio conductio
operis
are ordinarily reciprocal, with the result that the
contractor’s entitlement to receive payment is dependant on
performance of its
obligations.
3
(b) Other
than in circumstances in which the contractor specifically pleads for
the payment of a reduced contract price, an employer
is entitled to
withhold payment for the contractor’s services until such time as
the latter has strictly and fully performed its
obligations.
4
(c) In
addition to a right to withhold payment, the employer is entitled to
counterclaim for any damages suffered by it.
5
On
the factual allegations contained in the defendant’s pleadings, it
must be accepted for present purposes that the company’s
entitlement to claim payment from the defen­dant was reciprocal
to, and dependant on, due and proper perform­ance of its
own
obligations under the contracts. Had the company, therefore, prior
to liqui­dation, sued the defendant for payment in terms
of the
various contracts, the defendant would have been entitled to invoke
the
exceptio non adimpleti contractus
and to withhold payment
of the contract price until such time as the company had fully
performed its own obligations in terms of
those contracts. In
addition, the defendant could have instituted a counterclaim for
damages as a result of the company’s alleged
defective
performance. This raises the next question, as to how the
super­vening liquidation of the company affected this situation.
The
effect of the winding-up of the company on the rights of the parties
As
rightly pointed out
on behalf of
the
defendant, the plaintiff’s exception presupposes that a
concursus
creditorum
results in an absolute and
inviolable freezing of the liquidated company’s estate with the
result that there is no potential to
set off illiquid claims or
counterclaims. This argument overlooks the extensive body of law
addressing the effects of the establishment
of a
concursus
creditorum
on executory contracts.
In
this regard, it has long been recognised that executory contracts do
not terminate automatically when a company is wound-up.
Instead, the
liquidator has an election whether to enforce or to repudiate the
relevant contract. The legal position was summa­rised
as follows
by Vivier JA in
Nedcor Investment Bank v Pretoria Belgrave
Hotel (Pty) Ltd
:
6
‘
A trustee in
insolvency, and thus a liqui­dator of a company in liquidation,
is invested with a discretion whether to abide
by or terminate an
executory contract not specifically provided for in the Insolvency
Act which had been concluded by the company
in liqui­dation
before its liquidation. Such an agreement does not terminate
automatically on the company being placed in liquidation.
The
liquidator must make his election within a reasonable time. Should
he elect to abide by the agreement the liquidator steps
into the
shoes of the company in liquidation and is obliged to the other
party to the agreement to whatever counter-prestation
is required of
the company in terms of the agreement. Once the liquidator has
accepted the benefits of the contract, he cannot
limit the other
party to a concurrent claim against the free residue of the estate
for anything reciprocally due to it. The other
party’s claim then
lies against the trustee who must meet it as an expense incurred in
the estate’s administration since his
decision to abide by the
contract is reached for the purpose of his administration of the
estate.’
The
question as to whether or not a liquidator has elected to abide by a
particular executory contract is a question of fact and
not a
question of law. If that question of fact is to be decided by a
process of inference, the conclusion drawn must be consistent
with
all the proved facts. Insofar as reliance is placed upon conduct of
a liquidator as constituting an election to abide by the
relevant
executory contract, that conduct must be unequivocal.
7
Based
on the above analysis, it was argued
on behalf of
the defendant that the contracts on which the plaintiff’s
claims are based are executory contracts. This follows, so it was
argued,
from the fact that, at the time of the provisional
winding-up, the defendant was withholding full pay­ment to the
company until
such time as the services had been fully and correctly
performed. Consequent­ly, on the facts pleaded by the defendant,
neither
party had rendered complete performance at the date of the
provisional winding-up.
The
defendant further submitted that, in ceding the company’s claims
under the contracts to the plaintiff, the joint liquidators
of the
company must necessarily be taken to have elected to abide by the
agree­ments. After all, so it was argued, the right
that the
liquidators had was to claim payment from the defendant if, and only
if, they themselves had (a) elected to abide
by the contracts
in question and (b) fully performed the obligations that rested
on the company.
8
Had they repudiated the agree­ments, they would not have been
able to con­fer on the plaintiff the rights that form the
subject matter of the claims herein.
The
plaintiff’s counter-argument was that the plea does not contain
any allegations to the effect that the agreements in question
were
executory contracts or that the liquidators of the company did elect
to abide by such contracts. The alle­gations contained
in para
3.2.6 of the plea seem to suggest, on the contrary, that the
contracts had been repudiated by the liquidators, because
the
defen­dant complains that it ‘would retain only a concurrent
claim against the company in liquidation whilst being obliged
to
defend plaintiff’s action for the company’s claims’.
9
Were the contracts relied upon by the defendant in fact executory
contracts by which the joint liquidators had elected to abide,
the
claims of the defendant against the company would not be con­current
claims at all, but rather administration expenses
in the estate,
recoverable in full.
While
the plaintiff’s argument on this aspect is not without merit, the
test on exception, as noted above,
10
is a strict one. In my view, the defendant’s pleadings – on a
proper interpretation thereof – contain sufficient allegations
to
justify the inference that the contracts on which the plaintiff
relies are indeed executory contracts. Furthermore, the inference
that the liquidators had elected to abide by such contracts is
irresistible in view of the fact that the contrary inference would
not have given rise to the rights being pursued herein.
The
exception must accordingly be considered on the basis that the
claims ceded to the plaintiff arise from executory contracts
by
which the liquidators had elected to abide. It follows from this
approach that, had the liquidators sued the defendant on the
claims
in issue, the defendant would have had exactly the same rights as it
would have had, had it been sued by the company.
11
After all, ‘liquidation is not designed to endow the liquidator
with “rights under the contract greater than those of the

insolvent whose place he is taking”’.
12
It
follows, further, that – save to the extent indicated below
13
– the exception to the defendant’s plea cannot be upheld. In
reaching this conclusion, I have not found it necessary to consider
one of the alternative arguments strongly relied on by the
defendant, namely that a cession effected with the
mala
fide
purpose of depriving the debtor
of the procedural advantages of a counterclaim is invalid.
14
The
effect of cession of the company’s rights to the plaintiff
I
now turn to consider the exception to the defendant’s
counterclaim. In this regard, the effect of cession of the company’s
rights to the plaintiff is of cardinal importance. Ordinarily, the
effect of cession is that the
rights
(and not the
obligations) of the cedent are trans­ferred to the cessionary.
While a debtor is entitled to raise against a cessionary
any defence
in rem
that he or she could have raised against the cedent,
the question whether or not a debtor can, in addition, raise against
a cessionary
a counterclaim that it has against the cedent remains
unclear in our law.
In
LTA Engineering Co Ltd v Seacat Investments (Pty) Ltd
,
15
the
Appellate Division
held – with reference to
D
.3.3.34
– that a cessionary was obliged to ‘defend’ the cedent where
the cession was
mala fide
;
that is to say, where it was purposively entered into with a view to
preventing the debtor from instituting a counter­claim.
In that
case, a debtor sought a stay of judg­ment in favour of a
cessionary so as to allow for a claim in reconvention against
the
cedent to become liquidated and capable of set-off against the
cessionary. The court held in this regard:
‘
It is as
inequitable today as, e.g., in the fourteenth century, that a debtor
should be prejudiced by a cession designed to circum­vent
its
right of reconvention, where the cessionary is a party to that
design.’
16
In
the
LTA
case, the defendant only sought a stay of proceedings
while pursuing its claim against the cedent; it did not seek to
institute
a counterclaim against the cessionary. In the
circumstances, Jansen JA found it neither necessary nor
desirable ‘to consider
fully the precise nature of a cessionary’s
duty “to defend the cedent” in the light of modern concepts and
procedure’.
17
In
an erudite argument
on behalf of
the
defendant, Adv
Van Helden
sought to persuade me that the
cessionary’s above-mentioned duty includes the duty to defend a
counterclaim that the debtor may
have against the cedent, even where
such counterclaim exceeds the value of the claim by the cessionary.
He relied in this regard
on a careful analysis of certain
dicta
in the judgment of Jansen JA in the
LTA
case, as
well as some of the common law authorities referred to therein. In
my view, however, the weight of authority is against
these
submissions.
Van
der Merwe
et al,
18
in commenting on the
LTA
case, state that it is not clear (and was not settled by the
judgment in that case) whether the principle – namely that the
mala fide
cessionary is obliged to ‘defend’ the cedent – entitles the
debtor to more than an order suspending the claim by the cessionary
until such time as judgment is given in the debtor’s claim against
the cedent. With reference to a trilogy of cases
19
that followed on the
LTA
case,
however, the authors express the view that –
‘
The rule does
not entitle the debtor to bring the counterclaim against the
cessionary, eg where the cedent has become insolvent.’
20
Nienaber
21
crisply summarises the prevailing position as follows: The debtor
who is sued by a cessionary can rely on a claim that he or she
has
against the cedent if such claim, at the time of cession, qualified
for set-off against the ceded right. This follows from
the
proposition that cession is not to impair the position of the
debtor. However, where the debt which is owed by the cedent to
the
debtor was still unliquidated at the date of the cession and hence
incapable of supporting set-off, a debtor is not permitted
to rely
on set-off against the cessionary. Nor would the debtor be permitted
to rely on a counterclaim which he or she had against
the cedent but
which was not yet ripe for set-off, either at the date of the
cession or at the date when the action was instituted.
This general
approach is subject to the following qualification:
‘
The debtor is
entitled to rely on a counter-claim that he or she has against the
cedent in order to stay judgment on the cessionary’s
claim until
the counterclaim has been disposed of, but only if the cession was
made mala fide, that is if it was made by the cedent
with the
purpose of circum­venting the debtor’s reliance on the claim
in reconvention the cessionary was aware of the cedent’s
motive.
In these circumstances the debtor would not be precluded
from invoking a future set-off. The cessionary, if shown to have
conspired
with the cedent to frustrate the debtor from raising a
counterclaim by way of reconvention, is obliged to “defend” the
cedent.
The deter­mination of the cedent’s claim is deferred
until the counterclaim has been decided. The cessionary has a vital

interest in the outcome of that dispute. If the counterclaim is
unsuccessful his or her claim, if proved, succeeds in full; if the
counterclaim is successful, it will then have become liquidated and
set-off will operate to extinguish or reduce the cessionary’s
claim against the debtor, even, it is submitted, where the cedent
was not a party to the action. From the fact that the cessionary,
because of his or her own bad faith, is obliged to suffer set-off,
it does not follow, however, that he or she becomes liable for
payment of any excess if the debtor’s counterclaim against the
cedent is proved to exceed the cessionary’s claim against him
or
her: the cessionary is not a substitute debtor for the cedent and
does not become liable for the latter’s debt.’
22
Direct
authority for the above approach is to be found in the judgment of
Howard J in
Munira Investments (Pty) Ltd v Flash Clothing
Manufacturers (Pty) Ltd
:
23
‘
I cannot
accept the defendant’s submission that the decision [in the LTA
case] can be regarded as authority for a counter­claim
against
the plaintiff in the form proposed. Whatever the precise nature of
the cessionary’s “duty to defend”, it cannot have
the effect
of substituting the cessionary for the cedent as the person liable
for payment of the alleged damages totalling R6 861.15
or any
part there­of. The entire claim for damages remains a claim
against the cedent, not the cessionary, and the judgment
in the
Engineering case contains no suggestion to the contrary. In
particular, or set-off is only mentioned (in the passage
at 772
quoted above) as a possibility “‘by reason of the degree of
identification of the cessionary with the cedent”’.
In my
respectful opinion the identification would have to be complete, for
it is fundamental to the operation of set-off that both
debts be due
and payable by and to the same persons in the same capacities (see
Wessels, Law of Contract in South Africa, Second
Edition, paragraph
2514; De Wet & Yeats en Handelsreg, Fourth Edition at 245-246).
The proposed counterclaim is based on the
misconception that the
cessionary’s duty “to defend” renders it liable for payment of
the damages in question. In my judg­ment
it is bad in law and
would be excipiable as such.’
I
respectfully agree with these views. Applying these principles to
the facts of this case, it is clear that the defendant’s

counterclaims against the cedent are, at this stage, unliquidated
claims for damages. Had the defendant – prior to the cession
–
been sued by the liquidators, it would have been unable to apply
set-off. At best, it could have applied for a stay of the
liquidators’ action pending proof of its counterclaim so as to
allow set-off to take place. Cession of the liquidators’ claim
to
the plaintiff cannot affect this position. While it is trite that
cession of a debt cannot be allowed to
impair
the position of
the debtor, it can equally not be relied on to
improve
the
position of the debtor.
For
the above reasons, I conclude that the defendant’s unliquidated
counterclaim against the plaintiff as cessionary is bad in
law and
does not disclose a cause of action. It follows from the foregoing
that paragraphs 47 and 48 as well as prayer (
b
) of the plea
are likewise excipiable and liable to be struck out. To that extent,
I would accordingly uphold the exception against
the counterclaim as
well as the identified portions of the plea. In the result, it is
not necessary to consider the further argument
on
behalf of
the plaintiff, namely that it is in any event not
competent for a debtor to institute a counter­claim that exceeds
the claim
of the cessionary.
Costs
This
result means that the plaintiff is partially successful. He was
accordingly justified in launching the exception. Conversely,
however, the defendant was largely successfully in resisting the
exception insofar as it was directed against its plea. In the
circumstances, I would regard it to be fair to award the plaintiff
one-half of its costs in relation to the exception.
Order
For
the reasons stated above, I would issue the following order:
1. The
exception is upheld in part, to the extent that the defendant’s
counterclaim as well as paragraphs 47 and 48 as well as prayer
(b) of
the plea are struck out.
2. The
defendant is granted leave, if so advised, to amend its pleadings
within 20 days from the date of this order.
3. The
defendant is ordered to pay one-half of the plaintiff’s costs in
respect of the exception.
B
M Griesel
Judge
1
Erasmus
Superior
Court Practice
(1994 with loose-leaf updates, Service 27) at B1–151 n 4;
B–152 n 9; B1–153 n 1 and 3.
2
1979
(1) SA 391
(A).
3
At
418B–C.
4
At
419C–G.
5
At
435F–G.
6
2003
(5) SA 189
(SCA) para 6.
7
Du
Plessis & Another NNO v Rolfes Limited
[1996] ZASCA 45
;
1997 (2) SA 354
(A) at 364F–G.
8
In
this regard, it should be noted that the plaintiff does not seek to
claim a reduced contract price in accordance with the principles
set
out in the
BK
Tooling
case,
supra.
9
Quoted
in para In its plea, the defendant raises various defences in rem against the plaintiff’s claims, based mainly on alleged
defective, incomplete and/or late performance rendered by the company. The details of those defences are not relevant for present
purposes. What is relevant, is the defendant’s denial of the validity of the cession on which the plaintiff’s claims are based
and hence his locus standi to sue. In amplification of its denial, the main grounds of this defence are pleaded in the following
terms:
above.
10
Para
above.
11
See
para above.
12
Thomas Construction (Pty) Ltd
(In Liquidation) v Grafton Furniture Manufacturers (Pty) Ltd
1986 (4) SA 510
(N) at 522F, quoting with approval
from
Smith &
Another v Parton NO
1980
(3) SA 724
(D) at 729H.
13
Para
below.
14
See
eg Scott
The Law
of
C
ession
(2ed)
1990 at 197–201;
Nedcor
Bank Limited v Hyperlec Electrical and Mechanical Suppliers CC and
three similar cases
2000 (2) SA 880
(T)
at
884E–G;
Corinth
Properties (Pty) Ltd v First Rand Bank Limited
2002 (6) SA 540
(W) at
546D
and I–J. But cf also Van der Merwe
et
al
Contract –
General Principles
(2ed) 2003 at 451 n 227; and
Goodwin
Stable Trust v Duohex (Pty) Ltd & Another
1998 (4) SA 606
(C) at 617B.
15
1974
(1) SA 747
(A).
16
At
771A.
17
At
772C–D.
18
Op
cit
at
450–1 and authorities cited therein.
19
Munira Investments (Pty) Ltd v
Flash Clothing Manufacturers (Pty) Ltd
1980 (1) SA 326
(D);
Regional
Factors (Pty) Ltd v Charisma Promotions
1980 (4) SA 509
(C); and
Beukes
v Claassen
1986 (4) SA 495
(O).
20
Loc
cit
n 229. See also De Wet & Van Wyk
Kontraktereg
& Handelsreg
(5ed) 1992 at 258 n 35.
21
2(2)
Lawsa (2ed) 2003 para 51.
22
Id.
(footnotes
omitted.) See also
Regional
Factors (Pty) Ltd v Charisma Promotions, supra,
at 512B, where it was held that there is no authority indicating
that a cessionary could be sued by way of counterclaim for an
amount
in excess of the cessionary’s claim. Note however the doubts
expressed about the
dictum
at 512E of the same judgment in
Beukes
v Claassen, supra,
at
499D and in Lubbe & Murray
Farlam
& Hathaway, Contract – Cases, Materials, Commentary
(3ed) 1988 at 679; and Van der Merwe
et
al, op cit
at 451 n 229, with which doubts I respectfully associate myself.
23
Footnote
19
supra
at 330D–E.