Aussenkehr Farms (Pty) Ltd v Trio Transport CC (499/2000) [2002] ZASCA 28; [2002] 3 All SA 309 (A) (28 March 2002)

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Aussenkehr Farms (Pty) Ltd v Trio Transport CC (499/2000) [2002] ZASCA 28; [2002] 3 All SA 309 (A); 2002 (4) SA 483 (SCA) (28 March 2002)

THE
SUPREME COURT OF APPEAL
OF
SOUTH AFRICA
Reportable
CASE
NO
:
499/2000
In the matter between:
AUSSENKEHR FARMS (PTY) LTD
Appellant
and
TRIO TRANSPORT CC
Respondent
___________________________________________________________________________
Before: SMALBERGER, MARAIS, NAVSA, MPATI JJA &
LEWIS AJA
Heard: 7 MARCH 2002
Delivered:
28 MARCH 2002
Summary: Termination of cession
in securitatem
debiti
;
locus standi
of cedent to claim payment from
debtor prior to termination; interruption of prescription.
___________________________________________________________________________
J U D G M E N T
___________________________________________________________________________
LEWIS AJA
LEWIS AJA:
[1]
The
respondent, a transport contractor, instituted action in the Cape
High Court against the appellant, a farming concern, for payment
of
the sum of R127 383 in terms of a contract for the
transportation of fruit. For the sake of convenience I shall refer

to the parties as the plaintiff and the defendant respectively. This
appeal is against the decision of Foxcroft J, with his leave,
that
the defendant was bound to pay the amount claimed. The plaintiff’s
claim was for payment of fees for transporting consignments
of grapes
and other fruit from Namibia, and destined for export from South
Africa to Europe. A number of issues, and a counterclaim
for
damages, were considered by the court
a
quo
. During the
course of the trial, however, the counterclaim was abandoned and the
defendant admitted that it would have owed the
transportation fees
but for a new defence raised in a plea filed after the leading of
evidence by the plaintiff. The defence was
that the plaintiff, at
the time of issue of the summons, had had no
locus
standi
to sue since
it had ceded its rights against its debtors
in
securitatem debiti
to
ABSA Bank Ltd (the bank), and the cession was current at the time
when action had been instituted.
[2]
The
existence of the cession had been brought to light in the course of
the evidence of the plaintiff’s chief witness, a Mr Mouton,
and the
defendant introduced a special plea alleging not only the absence of
locus standi,
but also prescription, in that the claim lay at the instance of the
bank, but had become prescribed because more than three years
had
elapsed since the cause of action had arisen. It was not disputed
that the cession had been current at the time of institution
of
action. It was alleged by the plaintiff, however, that the rights
had been re-ceded to it subsequently. The defendant responded
that
even if the cession had subsequently been cancelled, or the rights of
the bank re-ceded to the plaintiff, the claim had become
prescribed.
[3]
Foxcroft
J found that the cession had been terminated shortly after the action
had been instituted; that the claim had not prescribed;
and that the
plaintiff should succeed in its claim.
[4]
The
claim for payment had become due on about 6 February 1996. The
cession to the bank had been effected on 4 September 1995.
The
plaintiff’s action was instituted on 11 February 1997. The
plaintiff alleged, and this was not in dispute, that the defendant

had admitted liability both in February 1996 and in August of that
year, when the defendant’s representative had conceded liability
to
the plaintiff and had agreed to effect payment by no later than 4
October 1996.
[5]
The
special plea, filed by the defendant on 31 May 1999, relied on a
number of provisions of the cession and was to the following
effect:
(a) The plaintiff had no locus standi to institute the
action because it had, on 4 September 1995, ceded to the bank its
rights
‘in en tot alle bedrae wat nou aan die sedent veskuldig is
of van tyd tot tyd aan die sedent verskuldig mag word ongeag die
oorsaak
daarvan . . .’ .
(b) Clause 4 of the cession provided that it was
‘onherroeplik en sal van krag bly solank as die sedent geld aan die
bank skuld
en die sessie sal van krag wees as voortdurende en
dekkende sekuritiet ten gunste van die bank totdat die sedent se
huidige en
toekomstige skulde aan die bank ten volle gedelg is’.
The defendant averred that at the time when the action was instituted
the plaintiff owed money to the bank.
(c) Clause 15 of the cession read: ‘Geen wysiging van
hierdie akte van sessie sal van enige krag wees tensy dit skriftelik
geskied
en onderteken word deur beide die sedent en die bank nie.’
The defendant alleged that there had not been any variation of the

cession (which included, it argued, a re-cession), which complied
with this provision. Any purported oral cession or waiver was

similarly precluded by this term.
(d) Any claim of the bank for enforcement of the
defendant’s debt had prescribed in terms of
section 11
(d) of the
Prescription Act 68 of 1969
as at 6 February 1999. The bank was thus
unable either to enforce the claim against the defendant or to
re-cede it to the plaintiff.
[6]
The
plaintiff, rather than amending its summons, and by apparent
agreement with the defendant, filed a replication dated 8 June
1999.
It admitted the fact of the cession, and that at the time when it had
instituted action it was indebted to the bank ‘in
respect of the
debit balance on an overdrawn account’. The plaintiff conceded,
moreover, that ‘as a consequence of the aforesaid
cession,
plaintiff, having divested itself of its rights in respect of,
inter
alia,
its book debts, no longer had
locus standi
to
enforce such rights’. The plaintiff averred, however, that the
bank had cancelled the cession on about 5 June 1997, and that
all its
former rights, including its claim against the defendant, had
revested in it. Alternatively, it averred that had such
cancellation
and consequent revesting not occurred, there had been a re-cession of
the rights by the bank to the plaintiff in terms
of a written
agreement dated 3 June 1999, and which was attached to the
replication.
[7]
The plaintiff denied
that the provisions of the deed of cession relied upon by the
defendant in its plea precluded the cancellation
or re-cession
pleaded. Further, it contended that the defendant had in February
1996 acknowledged its indebtedness for the transportation
of fruit by
the plaintiff during 1995 and 1996, and had undertaken to pay the
balance of what was owing by means of post-dated
cheques, the last of
which was payable on 30 June 1996. Four of the cheques had been
dishonoured, and the plaintiff had, in August
1996, given the
defendant a further extension of time to pay until 4 October 1996.
Accordingly, the plaintiff averred, the running
of prescription had
been interrupted on a number of occasions during the period from
February to October 1996, and the claim of
the bank had not become
prescribed before the re-cession to the plaintiff on 3 June 1999.
[8]
After the filing of
these further pleadings, the plaintiff led the evidence of the
commercial manager of the Durbanville Branch
of the bank, Mr André
van Schoor. Van Schoor had been the credit manager of the branch in
1995. He had had extensive dealings
with the plaintiff’s
representatives – he was involved, he said, with at least 90 per
cent of their transactions with the bank.
He testified that the
overdraft facility of the plaintiff had increased significantly
towards the end of 1996. The plaintiff
had been advised to reduce
the amount by which it was overdrawn, and in January 1997 a meeting
had been held with representatives
of both the bank and the plaintiff
in this regard. He stated:
‘
In Januarie het ons met hulle ooreengekom dat hulle
die debiteure sal vorder en dan die fasiliteit sal afkort. Ons het
spesifiek
vir hulle gesê dat hulle die debiteure moet vorder want in
die verlede het ons al agtergekom sodra as die bank betrokke raak by

die vordering van debiteure dat sekere debiteure dan net ophou betaal
en dit is hoekom ons vir hulle gesê het om die debiteure
te vorder
en ons het dit gemonitor, soos hulle het elke dag vir ons lyste van
die debiteure gegee met die bedrae wat inbetaal is
en ons het dit
afgemerk om die fasiliteit so af te bou na nul toe.’
Relying on this evidence, which was not gainsaid,
Foxcroft J held that the bank had permitted the plaintiff to exercise
the rights
held by it by virtue of the cession. The collection of
the debts by the plaintiff had had the effect of reducing the
overdraft
such that a nil balance was achieved on 4 June 1997. At
that stage, the learned judge said, ‘the overdraft having
disappeared,
the cession disappeared with it’.
[9]
Foxcroft J held,
furthermore, that the existence of other debts owed by the plaintiff
to the bank after that date was no bar to
his conclusion. The
cession had been intended to secure only the overdraft facility.
This was certainly the uncontroverted evidence
of Van Schoor,
supported by that of Mouton for the plaintiff. Van Schoor testified
that the purpose of the cession had been to
secure ‘die oortrokke
fasiliteit en die kredietlyn’. When asked whether the cession had
not also served as security for other
obligations, Van Schoor
responded that obligations in respect of vehicles were secured
through the assets themselves. His view
was that the cession was
cancelled when the overdraft ceased to exist despite the existence of
other amounts owed by the plaintiff
to the bank. The overdraft had
been extinguished, he testified, on 4 June 1997, the first date on
which there was no longer a
debit balance on the account.
[10]
When it was put to
Mr van Schoor by Mr
Barnard
, for the defendant, that the
cession could not have been cancelled at that stage because the
plaintiff had also owed the bank money
on a bond over immovable
property, his response was similarly that the debt was secured by the
property itself, which was valuable
and easily realizable. The
contention that the cession was framed also as covering security for
future indebtedness was met with
the same response: the bank had
sufficient security in other forms to protect itself, and did not
rely upon the cession. The cession
was intended to cover only the
overdraft and credit facility, and when that had terminated, the
cession had been ‘cancelled’.
Van Schoor asserted that he had
had the authority to cancel the cession, and had taken steps to do
so. He testified that there
had in fact been a formal cancellation
on 5 June 1997. It subsequently came to light that he had been
mistaken in this regard.
A formal record of the termination of the
cession (a form entitled ‘Permanent Withdrawal of Securities’)
was signed by Van
Schoor only on 14 November 1997. But Van Schoor
also said that the bank’s computer system had not reflected the
existence of
the cession after June 1997, testimony that also was not
controverted.
Foxcroft J held that the later completion of the
bank’s formalities did not affect the legal position, since the
cancellation
had in fact taken place earlier.
[11]
In so far as the
status of the plaintiff was concerned in August 1996, when it granted
an extension of time to pay to the defendant,
the court
a quo
held that although the bank was the creditor (by virtue of the
cession) the plaintiff had acted as agent for the bank. It had
been
dealing with the debtors itself since the bank (according to Van
Schoor) did not involve itself in the collection of the debts.
In
Pentz v Government of the Republic of South Africa
1983 (3) SA
584
(A) at 594C-E Nicholas AJA held that
section 14
(1) of the
Prescription Act should
be construed as meaning ‘an acknowledgment
to the creditor or his agent’. The running of prescription was
thus found to have
been interrupted in August 1996.
[12]
It is to be noted,
however, that the plaintiff did not plead that at the time when the
acknowledgment of debt had been made to it,
it had been acting as
agent for the bank. Mr
Barnard
submitted also that no evidence
had been led to support the proposition that the plaintiff had
attempted to claim payment on behalf
of the bank. I shall deal with
this argument later.
[13]
Foxcroft J granted
the plaintiff’s claim on the basis that the cession to the bank had
ceased to be in force in early June 1997,
and that when the nature of
the plaintiff’s claim was changed (by virtue of the replication in
June 1999) the claim had not yet
prescribed.
[14]
On appeal, Mr
Barnard
argued that the claim had indeed prescribed,
submitting, first, that the plaintiff could not rely on any agency
agreement either
for the purpose of instituting the action or in
order to assert that the prescription period had been interrupted.
[15]
The principal
difficulty with the argument that the plaintiff had been acting as
the bank’s agent in instituting action is that
it had, in its
replication, admitted that it had no
locus standi
to enforce
the rights against the defendant at that time; and that it had
nowhere pleaded that it had litigated on behalf of the
bank. It had
sued in its own name. Moreover, it appeared that the representatives
of the plaintiff had overlooked the existence
of the cession at that
time and had not deliberately or consciously litigated as agent for
the bank. Mr
Vivier
, for the plaintiff, did not pursue the
argument that although the plaintiff had initially sued
qua
principal, when it discovered that the rights actually vested in the
bank at the time of institution of action, its conduct had
in some
way subsequently been ratified by the true principal. It seems to me
that the defendant’s argument that the plaintiff
had sued in its
own name, on the incorrect assumption that the rights against the
defendant vested in it, is correct. Accordingly,
this aspect of the
defendant’s argument is well-founded.
[16]
But the submission
of the plaintiff, and indeed the finding of the court
a quo
,
that the plaintiff had been acting in its capacity as the bank’s
agent in August 1996, when it gave the defendant an extension
of time
within which to pay its debt, is of a different order. The evidence
of Van Schoor and Mouton was unequivocal in this regard.
It was the
practice of the bank to require their debtors, such as the plaintiff,
to collect their own debts. They were actively
encouraged to do so.
I have already discussed the testimony of Van Schoor that the bank
had instructed the plaintiff to proceed
against its debtors.
Although the meeting in January 1997 at which the bank’s
representatives had insisted that the plaintiff’s
overdraft be
reduced, and that the plaintiff do this by way of proceeding against
the debtors, and the defendant in particular,
had followed the
plaintiff’s attempt in 1996 to obtain payment of its account by the
defendant, there can be no doubt that it
was acting even on the
earlier occasions on behalf of the bank. Whatever moneys it
collected from the defendant were required
by the bank to be paid
into the plaintiff’s overdrawn account (see clause 2(b) of the deed
of cession, set out below). And the
bank monitored on a regular
basis the plaintiff’s progress in respect of the collection of
amounts owing.
[17]
The conclusion
that the plaintiff was acting as agent on behalf of the bank when
attempting to claim payment from the defendant,
and when affording
the defendant an extension of time in which to make payment, is
fortified in my view by the wording of clause
2 (b) of the deed of
cession. It reads:
'Die sedent erken en onderneem ten gunste van die Bank:
(a) . . .
(b) Dat terwyl die sedent ‘n bedrag aan die Bank
veskuldig is, alle gelde wat die sedent na die datum hiervan mag
invorder van
die sedent se debiteure deur die sedent ingevorder en
ontvang sal word as agente namens en ten behoewe van die Bank en die
sedent
onderneem, . . . om sodanige invordering en ontvangs van gelde
van die sedent se debiteure te staak vanaf die datum waarop die Bank

die sedent en/of die sedent se debiteure in kennis mag stel dat die
Bank in die toekoms self die bedrae, deur die sedent se debiteure

verskuldig en ingevolge hierdie sessie gesedeer, sal invorder.’
I consider, therefore, that
the court
a quo
was correct in finding that when the defendant
acknowledged to the plaintiff its indebtedness, and requested an
extension of time
for payment until October 1996, the running of
prescription was interrupted.
[18]
The question remains
as to the basis on which the plaintiff could have acquired the right
itself to enforce the action for payment
against the defendant after
5 June 1997. Mr
Vivier
contended for two, alternative, bases.
The first, in chronological sequence, is that when the plaintiff’s
overdraft was extinguished
in June 1997, the cession terminated and
rights against debtors revested in the plaintiff. The other is the
purported re-cession
of rights by the bank to the plaintiff on 3 June
1999, the record of which was attached to the replication. The
effect of that
is dependent on whether the cession had in any event
ceased to exist in June 1997, in which case the re-cession was a
nullity and
does not fall to be considered further.
[19]
Did the cession
terminate when the overdraft was extinguished? The evidence of Van
Schoor in this regard has already been discussed.
It was the view of
Van Schoor that as soon as the overdraft had been paid, he should
cancel the cession. He maintained that he
had taken the necessary
steps to terminate it. And it was on the basis of that cancellation
that the court
a quo
held that the cession had come to an end
and the rights ceded had revested in the plaintiff.
[20]
The legal principles
governing the termination by consent of a cession (and which would
a
fortiori
govern a cession
in securitatem debiti
) are
discussed in
Johnson v Incorporated General Insurances Ltd
1983 (1) SA 318
(A) at 332. Joubert JA, relying on
Voet
Commentarius
18.4.16, stated that the parties can by agreement
terminate a cession.
‘
Voet
verwys hier na ‘n ontbindingsooreenkoms
wat deur die sedent en die sessionaris ten aansien van die
oordragsooreenkoms aangegaan
word omdat hulle die wedersydse
wilsooreenstemming van die oordragsooreenkoms wil terugtree
(
resiliri
). Hulle bedoeling is onmiskenbaar om die
oordragsooreenkoms ongedaan te maak met die bedoeling van die
sessionaris om op te hou
om reghebbende van die vorderingsreg te wees
en met die bedoeling van die sedent om weer reghebbende van die
vorderingsreg te wees.
Die ontbindingsooreenkoms bring a
translatio
van die vorderingsreg mee en vervul derhalwe die funksie van ‘n
terugsessie.’
A formal act of re-cession is
thus unnecessary. This conclusion follows logically, in any event,
from the principle that a contract
of cession has the effect not only
of creating rights and obligations, but also of transferring rights
from the cedent to the cessionary.
If rights can be transferred by a
cedent to a cessionary by virtue of an agreement, which embodies an
intention to transfer and
to accept transfer respectively, then
clearly they can be retransferred by virtue of an agreement to
terminate the cession, which
will in turn, necessarily, embody the
intention to transfer the rights back to the cedent. Such an
agreement may take any form:
it might be concluded tacitly, by
conduct or in writing. But there can be no reason why some
additional act or formality is required
for retransfer. See in this
regard the discussion in
Standard General Insurance Co Ltd v SA
Brake CC
[1995] ZASCA 46
;
1995 (3) SA 806
(A) at 814I--815A.
[21]
Mr
Barnard
submitted that there can be no unilateral cancellation of a cession,
and, naturally, that the requisite retransfer cannot occur
unless
both parties intend that the rights formerly ceded should revest in
the cedent. That must be so. But there was ample evidence
that the
bank and the plaintiff were agreed that the overdraft would be
extinguished, and that the plaintiff would then once again
possess
all the rights that it had, prior to the cession, enjoyed against its
debtors, including the right to sue them. Mouton
testified that it
was his understanding that as soon as the overdraft was extinguished
the cession would terminate: it was ‘per
definisie ook
gekanselleer’ when the overdraft facility was itself cancelled.
Although Mouton was not aware of any formal steps
taken to record the
cancellation, he had certainly agreed that the cession would
terminate at a particular point – when the plaintiff’s
account
ceased to have a debit balance. The cancellation was thus not
unilateral: the bank and the plaintiff agreed on termination,
and
that agreement would by its nature have entailed the respective
intentions to transfer and to accept transfer of the rights
in
question.
[22]
Mr
Barnard
argued further, however, that this conclusion was in conflict with
the provisions of the contract of cession itself. First, the
cession
was stated to be in respect of
all debts
owed to the bank by
the plaintiff, both existing and future (clauses 1 and 4). The
plaintiff had owed the bank various sums of
money from time to time
after the alleged re-cession. Secondly, any variation (including a
re-cession, it was argued) was required
to be in writing, signed on
behalf of the bank and the cedent (clause 15).
[23]
The first argument
was met by Mr
Vivier
with the response that both the bank and
the plaintiff had intended, no matter what the wording of the
contract was, that the cession
would constitute security only for the
overdraft; and that once the overdraft had been extinguished, the
cession, despite the existence
of other debts, would be terminated.
That submission is borne out by the evidence of Van Schoor and
Mouton, discussed above.
Where the parties to a contract are agreed
on its meaning, is it open to a third party to contend for a
different meaning even
if that does accord with the apparent meaning
of the written document reflecting the agreement? Similarly, as to
the second argument,
is it open to a third person to insist that a
variation of a contract by the parties be in writing when the parties
themselves
are not relying on the provision in their contract
requiring written variations?
[24]
In answering these
questions one must consider the purpose of the provisions at issue.
Clearly all contractual terms are designed
to govern the relationship
between the parties themselves. The terms are included at their
instance and for their particular requirements.
The term governing
the nature and extent of the rights ceded to the bank ensures
certainty, for the parties, in the event of a
dispute as to whether a
particular right is covered by the cession. A term prohibiting
variation of a contract unless it takes
a particular form likewise
ensures that the written record of the parties’ agreement governs
their relationship, and accordingly
affords certainty as to the terms
of the contract.
[25]
Where the parties
dispute the meaning of a term then a court must necessarily look to
the wording of the provision itself to determine
its correct
construction. But where they agree on its meaning, even though the
provision appears objectively to reflect a different
understanding,
it would be absurd to insist on binding them to a term upon which
neither agrees only because of a third party’s
insistence on
reliance on the apparent meaning of the provision.
[26]
Accordingly, in my
view, it should not be open to the defendant to contend that although
the parties intended the cession to constitute
security only for the
overdraft, it covered also all other debts owed or that might in
future be owed to the bank. And similarly,
where the parties have
agreed that the cession will be extinguished when the overdraft
ceases to exist, it should not be open to
the defendant to argue that
the re-cession must be in writing in order for it to take effect.
Thus even if the re-cession by the
bank to the plaintiff in June 1997
did constitute a variation of the contract (a dubious proposition in
itself, since the re-cession
constitutes a termination of the
relationship and not a change to contractual terms) if the parties
were not contending that a
written termination was needed, it was not
open to the defendant to argue invalidity of the act.
[27]
There might of
course be situations where a third party has reasonably relied on the
apparent terms of an agreement between others
to his or her
detriment, such that an estoppel could arise. But that is certainly
not the case here, and no argument to this effect
was or indeed could
have been raised.
[28]
In the circumstances
I consider that the right to claim payment from the defendant became
vested once again in the plaintiff when
the cession was terminated on
4 June 1997. And when the replication to the new plea (in effect
embodying the plaintiff’s amended
claim) was filed by the plaintiff
in June 1999, the prescriptive period had not yet run its course,
prescription having been interrupted
by the defendant’s admission
of liability and undertaking to pay made in August 1996 to the
plaintiff.
[29]
It follows that any
purported re-cession in 1999 by the bank to the plaintiff was
ineffective, and need not be considered.
[30]
For these reasons
the appeal is dismissed with costs.
__________________________
C H LEWIS
ACTING JUDGE OF APPEAL
SMALBERGER
ADP )
NAVSA JA ) CONCUR
MPATI JA )
MARAIS JA/
MARAIS JA:
[1] With one reservation I
concur in the judgment of my learned colleague Lewis AJA. In my
view, it cannot safely be concluded
that the plaintiff was in fact
acting as the bank’s agent when the acknowledgment of the debt and
request for an extension of
time to pay it occurred. It was not
pleaded to have been the case and consequently the issue was not
pertinently canvassed in
evidence. In my opinion, such evidence as
there is on record points away from such a conclusion.
[2] The reasons given by Lewis AJA in paragraph 15
of her judgment for the conclusion that when plaintiff instituted
action
to recover the debt it was not acting as agent for the bank,
seem to me to be no less applicable to the capacity in which the
plaintiff
was acting when the acknowledgment of liability and the
request for an extension of time to pay occurred.
[3] There are other indications in the evidence
that, despite the provisions of the agreement of cession, the
plaintiff probably
did not in fact act as the bank’s agent in
collecting and/or receiving payment of the ceded debts during the
period under consideration.
The proceeds of the debts so collected
or received were not required by the bank to be paid into a separate
account of the bank’s
where they would not be subject to immediate
withdrawal by the plaintiff. They were deposited and permitted by
the bank to be
deposited in the plaintiff’s own bank account and no
embargo was placed upon the plaintiff immediately utilising those
proceeds
as it saw fit. That embargo on the plaintiff’s freedom of
action in regard to deposits and withdrawals from its own account
only came into being at the meeting in January 1997. In short, prior
to that embargo, and with the concurrence of the bank, the
plaintiff
appears to have behaved in fact exactly as it had behaved before the
cession. It collected the debts due to it in its
own name, paid the
cheques or money received into its own current bank account, drew
further cheques on the bank account as it
saw fit, and utilised the
proceeds of the collected debts for its own purposes without demur
from the bank. The debtors were unaware
of the cession and did not
regard the plaintiff as acting as agent for the bank when they paid
their debts to the plaintiff.
[4] While it is of course possible in law to agree
to constitute a cedent in a cession
in securitatem debiti
as
the cessionary’s agent to collect and receive payment of the ceded
debts without having to advise the debtors that the cedent
is acting
in that capacity, it does not follow that what happens thereafter
will always be, in fact, compatible with that agreement.
If it is
not, and is consistent only with the cedent having been allowed to
carry on exactly as before by collecting and receiving
payment of the
ceded debts and utilising the monies so collected or received for its
own purposes, it would have to be concluded
either that the cession
was a mere sham or, if it was not, that the cessionary had tacitly
allowed the cedent to continue to collect
and/or receive payments of
the debts in the cedent’s own right and for the cedent’s own use,
until such time as the cessionary
asserted or reasserted its right to
collect the debts itself or to have the cessionary collect them as
its agent. In law, allowing
the cedent to behave in the manner I
have described would amount to a tacit re-cession to the cedent by
the cessionary of each
of the debts so collected or received. That
tacit re-cession to the cedent of the debts could of course be
brought to an end by
the cessionary at any time but, until that was
done, the cedent would be acting in his, her or its own right and not
as agent for
the cessionary.
[5] It was for the plaintiff to plead and prove that
prescription had been interrupted. In so far as it sought to do so
by
proving that it was acting as the bank’s agent when the
acknowledgment of debt and request for an extension of time occurred
I do not think it has discharged that onus of proof on a balance of
probability. In any event, not having pleaded that it was acting
as
the bank’s agent, I cannot be sure that all the potentially
available evidence relevant to that issue was placed before the

court.
[6] However, this conclusion is not fatal to there
having been an effective interruption of liability. It seems clear
that
in the case of a ceded debt there can be only one applicable
period of prescription of that debt under the
Prescription Act 68 of
1969
. That follows from the derivative character of a ceded debt.
The debt owed to the cessionary is not a different debt from that

owed to the cedent. It is the same debt.
[7] There cannot be one period of prescription for
the cedent and a different period of prescription for the cessionary.
The prescription
commences to run against the debt on the day it
becomes due. Unless delayed or interrupted it will continue to run
until it has
completed its course. And it will do that whether the
debt is in the hands of the cedent or the cessionary. But of course
effective
suspensions or interruptions of prescription which may
occur will travel, so to speak, with the debt. An effective
interruption
or suspension which occurred prior to a cession will
inure to the benefit of the cedent if the cedent should subsequently
become
revested with the right to payment of the debt.
[8] The question which arises in the case of a ceded
debt (whether outright or
in securitatem debiti)
is to whom
must an acknowledgment of liability be made in order to bring about
an effective interruption of prescription? Because
of the
distinctive and unique character of a ceded debt there seems to me to
be much to be said for the view (at least in a case
where the debtor
has no knowledge of the cession) that an admission of liability made
to the cedent should be regarded as sufficient
in law to interrupt
the running of prescription. Payment made by the debtor to the
cedent in such circumstances will discharge
the debt even although
the right to claim the debt is no longer vested in the cedent. If
the unilateral dealings of the debtor
with the cedent can and do in
law redound to the prejudice of the cessionary, why should the law
balk at allowing the debtor’s
dealings with the cedent to inure to
the benefit of the cessionary? Why should an acknowledgement of debt
made to the cedent in
the belief that the cedent is the creditor be
regarded as devoid of any effect in law upon the debt or the running
of prescription
against the debt? The situation is very different
from one in which the admission of liability is made to a third party
who has
no connection, factual or jural, with the debt. I leave
these questions for future consideration as they were not fully
argued
and, for the reasons which follow, it is unnecessary to
resolve them in this case.
[9] The defendant, in my opinion, is on the horns
of a dilemma. On the facts of this case, when the acknowledgment of
debt and
the request for time to pay was made, the plaintiff could
only have been acting in one or other of two capacities: either as
agent
for the bank or in its own right by virtue of the freedom of
action which the bank had allowed it to have at that time in
collecting
and receiving payment of the debts. Whether subjectively
or objectively regarded, there is no other conceivable capacity in
which
the plaintiff could have been acting for there is no other
basis in law which would have empowered it to claim and receive
payment
of the debt. Counsel for the defendant was constrained to
concede that, on the facts of this case, he could not conceive of
any.
In whichever of those two capacities the plaintiff was acting
at the time or, perhaps more accurately, in whichever of those two

capacities it would have to be taken in law to have been acting, the
acknowledgment of liability and the request for time to pay
made to
it would have effectively interrupted the running of prescription.
[10] The further notional possibility, namely,
that the plaintiff, knowing that it was in fact not entitled to do so
in its own
right, nevertheless decided to chance its arm and collect
the debts without having any justification in law for doing so, does
not arise on the facts of the case. Nor does the notional
possibility of a bona fide but mistaken belief that, despite the
cession,
it continued to be entitled to collect the debts in its own
right even without the concurrence of the bank. It is common cause

that the plaintiff’s collection and receipt of payment of the debts
prior to the meeting in January 1997 took place with the
knowledge
and consent of the bank. I agree therefore with the order made by my
colleague Lewis AJA.
___________________
R M
MARAIS
JUDGE OF APPEAL