About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2025
>>
[2025] ZAGPPHC 1175
|
|
Fiamme Holdings (Pty) Ltd v Dikhutlo Enterprises (Pty) Ltd and Another (5757/17) [2025] ZAGPPHC 1175 (31 October 2025)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
CASE
NO: 5757/17
(1)
REPORTABLE:
(2)
OF INTEREST TO OTHER JUDGES:
(3)
REVISED.
DATE
31/10/25
SIGNATURE
In
the matter
between:
FIAMME
HOLDINGS (PTY) LTD
Applicant
and
DIKHUTLO
ENTERPRISES (PTY) LTD
First
Respondent
MOLOKO
BENNET NCUBE
Second
Respondent
In
re
:
TASTE
FOODS FRANCHISING (PTY) LTD
Plaintiff
and
DIKHUTLO
ENTERPRISES (PTY) LTD
First
Defendant
MOLOKO
BENNET NCUBE
Second
Defendant
JUDGMENT
MBONGWE,
J:
INTRODUCTION
[1]
This is an interlocutory application brought by Fiamme Holdings (Pty)
Ltd (‘the
Applicant’) for an order substituting it as
plaintiff in an action instituted by Taste Foods Franchising (Pty)
Ltd (‘Taste
Foods’), a liquidated company, against the
respondents for payment of R1,092,969.72, arising from an alleged
breach of a
Business Sale Agreement and a Franchise Agreement
concluded in June 2015. The application is opposed by the Second
Respondent,
the erstwhile sole director and surety of the first
respondent, an entity that was finally deregistered in 2024.
Factual
Background
[2]
The Applicant and the First Respondent concluded a Business
Sale
Agreement and a Franchise Agreement on 1 June 2015. The Franchise
Business was to endure for a period of five years commencing
on 1
June 2015. The First Defendant, without the consent of the Plaintiff,
ceased to operate the franchise business and vacated
the business
premises during June 2017.
[3]
Taste Foods instituted action against the respondents claiming a
total amount of R1,092,969.72
consisting of:-
R344 546.84 in
outstanding business purchase price
R180 577.57
franchise purchase price
R318 559-29 in
outstanding franchise fees
R249 286.02
in outstanding marketing fees contributions
TOTAL
R1 092 969.72
[4]
The respondents defended the action and filed a counterclaim for
damages in the amount
of approximately R3 million.
[5]
In November 2019, the Plaintiff sold its franchising business to the
Applicant
and ceded its rights to the claim against the respondents
to the Applicant. Approximately three months after it had sold its
franchising
business to the Applicant and ceded its rights in the
pending litigation against the respondents on 15 November 2019, Taste
Foods
went into voluntary liquidation.
[6]
Despite acquiring the business and the claim in November 2019, and
serving a notice
in terms of Rule 15(2) of the Uniform Rules of Court
on the respondents’ attorneys, the Applicant only brought this
application
for its substitution as Plaintiff on 1 October 2022, that
is, four days before the matter was scheduled for hearing on 5
October
2022.
[7]
The Second Respondent opposes the substitution on the following four
grounds:
(i)
That he will be prejudiced by the Applicant’s delayed bringing
of the substitution application in that the 1
st
Respondent
was deregistered in 2024 and the witnesses to the misrepresentations
that the plaintiff’s representatives had
made to the first
respondent may no longer be available or have forgotten the facts
.
(ii)
That the liquidators of Taste Foods had abandoned the action.
(iii)
The First Respondent’s counterclaim would fall away as a result
of the liquidation
of Taste Foods and cannot be pursued against the
Applicant.
(iv)
The Applicant’s right to the action has allegedly prescribed,
so contends the Second
Respondent.
Legal
Principles Pertaining To The Respondent’s Grounds for
Opposition
[8]
Rule 15(2)
permits substitution where there has been a transfer of interest in
the subject matter of litigation. The discretion
to grant
substitution must be exercised judicially, with due regard to
considerations of fairness, prejudice, and the interests
of
justice.
[1]
There is no merit in
the Respondent’s first ground for opposing this application.
Nor is the alleged prejudice established.
These factors together with
the speculation relating to the Respondents’ witnesses ought to
be rejected.
[9]
A cession
of rights in pending litigation does not terminate the proceedings,
but entitles the cessionary to be substituted as plaintiff.
In
Engen
Petroleum Ltd v Flotank Transport (Pty) Ltd
[2]
,
the Supreme Court of Appeal confirmed that an out-and-out cession
transfers full rights to the cessionary, including the right
to
litigate, even where the cedent is later liquidated. In the present
matter the Plaintiff had already ceded its right to the
litigation
when it went into liquidation. The liquidators of the Plaintiff had
nothing to do with the Plaintiff’s ceded claim,
let alone
abandoning it. The Respondent’s contention stands to be
rejected.
[10]
Prescription
is governed by the
Prescription Act 68 of 1969
. In
Van
Deventer and Another v Nedbank Ltd,
[3]
the court held that prescription runs against a creditor unless
interrupted by judicial demand or acknowledgment of liability.
Prescription of a right to claim finds no application to pending
litigation, nor does it affect a party substituting the initial
claimant in the pending litigation.
[11]
As to
counterclaims post-liquidation,
Knoop
NO and Others v SAFIC (Pty) Ltd
[4]
clarified that the liquidation of a party does not extinguish a
counterclaim against it or its successor, provided the cause of
action remains intact and procedural substitution is effected.
Application
of Law to Facts
[12]
The cession of the claim to the Applicant cannot be gainsaid. The
Applicant has acquired
the right to pursue the claim and is entitled
to be substituted as plaintiff. The liquidation of Taste Foods does
not extinguish
the ceded claim, nor does it render the counterclaim
nugatory. The counterclaim remains extant and may be pursued against
the substituted
plaintiff, subject to procedural amendment.
[13]
While the delay in bringing the substitution application is
regrettable, the respondents
have not demonstrated material prejudice
that cannot be addressed by appropriate directions or a costs order.
The
Rule 15(2)
notice was served before trial, and the respondents
were aware of the sale and cession.
[14]
The contention that the right to the action has prescribed due to
abandonment by
the liquidators is misplaced. The cession of the
Plaintiff’s rights to the claim against the Respondents
occurred before
the Plaintiff went into liquidation. The liquidators
had nothing to do with the claim. The Respondent’s contention
stands
to be rejected. The substitution does not create a new cause
of action but merely reflects the change in locus standi. The
Applicant’s
right to the pending action flows from the cession
and is not extinguished by the passage of time.
[15]
The argument that the counterclaim falls away due to the liquidation
of Taste Foods is misconceived.
The counterclaim may be pursued
against the Applicant, who would step into the shoes of Taste Foods
should this application be
granted. The Respondents retain their
procedural remedies and may amend their pleadings accordingly.
CONCLUSION
[16]
The Applicant has established its entitlement to be substituted as
plaintiff. The opposition
is without merit and appears to be
tactical. The interests of justice favour granting the relief sought.
ORDER
[17]
The following order is made:
1.
The Applicant, Fiamme Holdings (Pty) Ltd, is substituted as plaintiff
in
place of Taste Foods (Pty) Ltd;
2.
The respondents are granted leave, if so advised, to amend their
pleadings
within 20 days of this order.
3.
The respondents are directed to pay the costs of this application on
Scale
B.
MPN
MBONGWE
JUDGE
OF THE HIGH COURT
GAUTENG
DIVISION, PRETORIA
APPEARANCES
For the Applicant:
Advocate NSH Ali
Instructed by:
Lanham-Love
Galvraith-Van Reenen Inc
For the Second
Respondent:
Advocate E. Mann
Instructed by:
Langenhoven
Pistorius Modihapula Attorneys
Date of hearing:
24 April 2025
Date of judgment:
31 October 2025
[1]
United Watch & Diamond Co (Pty) Ltd v Disa Hotels Ltd
1972 (4)
SA 409
(C) at 415H–416A.
[2]
Engen Petroleum Ltd v Flotank Transport (Pty) Ltd
[2022] ZASCA 98
(21 June 2022).
[3]
Van Deventer and Another v Nedbank Ltd 2016 (3) SA 622 (WCC).
[4]
Knoop NO and Others v Safic (Pty) Ltd [2024] ZAGPJHC 1 (4 January
2024).