Court name
High Court
Case name
Kaap Agri Bedryf Ltd v Hardap Co-operative Ltd
Media neutral citation
[2010] NAHC 130


















CASE
NO. I 827/2008






IN THE HIGH COURT OF
NAMIBIA






In the matter between:






KAAP AGRI BEDRYF
LIMITED
…...............................................................PLAINTIFF





and





HARDAP
CO-OPERATIVE LIMITED
….......................................................DEFENDANT














CORAM:
NDAUENDAPO, J














Heard
on: 1 March 2010





Delivered
on: 4 October 2010









JUDGMENT:







NDAUENDAPO, J:
[1] This judgment deals with an exception raised
by the defendant, in which the defendant,
inter
alia
, attacks the validity of the
cession upon which the plaintiff based its claim against the
defendant.







The plaintiff, Kaap
Agri Bedryf Limited, is a public company with limited liability duly
registered in terms of the company Act, Act 61 of 1973, with
registered address and place of business of 65 Voortrekker Road,
Malmesbury, Western Cape, South Africa. The Defendant is Hardap
Co-Operative Limited with registration number 703/98, also a public
company duly registered in terms of the company laws of Namibia, with
registered address and chosen
domicillium
cidandi et executandi
at main road,
Windhoek at Stampriet Crossing, Namibia.







[2] The Plaintiff
issued summons against the Defendant. In its particulars of claim it
alleges,
inter alia,
the following:
(I quote the relevant
part for this judgment)







The
Plaintiff has
locus
standi
in
that:







2.1 Agri Oranje (Pty) Ltd, a private
company with limited liability, with registration number
1999/023186/07, duly registered in terms of the Company Act, Act 61
of 1973, with registered address at 65 Voortrekker Road, Malmesbury,
Western Cape, South Africa, ceded all debtors including all
securities to WPK Landbou Limited, a private company duly registered
in terms of the company Act, Act 61 of 1973, with registration number
1995/000336/06 with effect from 1 October 2005. A copy of the Cession
is annexed and marked Annexure “KB1”.







2.2 WPK Landbou Limited obtained all
rights, title and interest of Agri Oranje (Pty) Ltd of all the
debtors of Agri Oranje (Pty) Ltd as a result of the said cession.







2.3 WPK Landbou Limited changed its
name to Kaap Agri Bedryf Limited as more full descried in paragraph 1
supra. A copy of the name change is annexed and marked
Annexure “KB2”.”







[3] The above Honourable Court has
jurisdiction to adjudicate the matter in as far as the Defendant’s
chosen domicile is within the Honourable Court’s
jurisdiction.







[4] The Defendant, duly represented by
Gerhard Van Der Merwe, completed a credit application as well as a 30
days trade facility on 10 August 2000 at Mariental, Namibia, a copy
of the application is annexed and marked Annexure “KB3”.







[5] The credit facility was granted in
the amount of R500 000.00 and the 30 days trade facility on open
account was granted by the Plaintiff’s predecessor on 10 August
2000, subject to the following relevant conditions, as contained in
the Credit application (Annexure “KB3”).







5.1 payment of the balance owing on
the account shall be made on/or before the last business day of the
month following the month in which the statement of account concerned
was issued; See clause 1.







[6] The Plaintiff’s predecessor
and from 1 October 2005, the Plaintiff, sold and delivered goods to
the Defendant from time to time on the open account on the
Defendant’s special instance and request and thus complied with
all its obligations in terms of the credit agreement.







[7] In terms of a certificate of
balance issued by the Plaintiff’s credit manager the Defendant
is indebted to the Plaintiff as the 29 February 2008 in the amount of
R1 014 583.06 (One Million Fourteen Thousand Five Hundred and Eighty
Three Rand and Six Cents). The certificate is annexed and marked
Annexure “KB4”.







[8] The Defendant made various
payments on the open account from time to time, but despite demand,
fails and/or refuses to make payment of the balance outstanding to
the Plaintiff.







[9] The Defendant entered an
appearance to defend the action.







The cession reads as follows:-







Cession
of Debtors








  1. Agri Oranje (Eiendoms) Beperk,
    registration number 1999/023186/07 do hereby cede, with effect from
    1 October 2005 any and all debtors (together with underlying
    securities) of the company to WPK Landbou Beperk, registration
    number: 1995/000336/06 (“WPK Landbou”).









  1. All debtors, at face value thereof,
    as at 24:00 on 30 September 2005 are hereby ceded to WPK Landbou.








  1. WPK Landbou accepts such cession”.







Upon receipt of the further
particulars of claim, the Defendant filed an exception to the
particulars of claim.







Exception







The grounds upon which the defendant
excepts to the particulars of claim as amplified by the further
particulars are stated as follows:-








  1. GROUND 1










    1. In law, in order to establish a
      valid cession, the cession must contain a iusta causa
      traditioners;



    2. The Plaintiff relies on an alleged
      written agreement;



    3. The alleged written agreement, is
      the sole source of the Plaintiff’s course of action;



    4. The parole evidence rule is
      accordingly applicable;



    5. Ex facie the written
      agreement, no iusta causa traditiones exists;



    6. Accordingly, the cession is null and
      void and cannot sustain a cause of action.




  1. GROUND 2




    1. WPK Agriculture Limited’s name
      was change to that of the Plaintiff on 9 September 2005;



    2. Thus, as from 9 September 2005, no
      WPK Agriculture Limited was in existence anymore;











    1. Nevertheless, the cession document
      indicates that the alleged cession agreement between Agri Oranje
      (Eiendoms) Beperk and WPK Landbou Beperk took place on 30 September
      2005;



    2. As at 30 September 2005, and on
      Plaintiff’s own allegations, WPK Landbou Beperk was not in
      existence, or known, anymore.









[10] When the matter came before me
the Court was asked to adjudicate on the exception only. Mr Heathcote
S.C. appeared on behalf of the Defendant and Mr Janse Van Rensburg
appeared on behalf of the Plaintiff. Both Counsel submitted written
heads of arguments.







Defendant’s submissions:







[11] Mr Heathcote, SC submitted that
the Plaintiff’s claim is based or relied upon the written
cession exhibit “KB1” alone and as a result the parole
evidence rule is applicable. He referred this Court to the matter of
Incledon Welkom (Pty) Ltd v Qwa Qwa Development
Corporation Limited
1990 (4) SA 798(A) in
support of his contention.







[12] Mr Heathcote, SC, further
submitted that exhibit “KB1” does not comply with the
requirement of a (valid) cession. In terms of the law there are two
requirements for a valid cession:








  1. A valid cause or (Justa causa)
    coupled by the (ii) transfer of the right.








[13] He referred the Court to the
matter of Johnson v Incorporated General Insurance Limited 1983(1)
SA
318 at 319 where the Court stated (at 319) that:







Cession, in
our modern law, can be seen as an act of transfer to enable the
transfer to take place. It is accomplished by means of an agreement
of transfer between the cedent and the cessionary arising out of a
justa
causa
from
which the intention of the cedent to transfer the right to claim to
the cessionary
(animus
transferendi)

and the intention of the cessionary to become the holder of the right
to claim
(animus
acquirendi
)
appears or can be inferred. The agreement of transfer can coincide
with, or be preceded by, a
justa
causa

which can be an obligatory agreement such as, e.g, a contract of
sale, a contract of exchange, a contract of donation, an agreement of
settlement or even a payment (solution)”.







[14] Mr Heathcote SC, further
submitted that for an effective cession to take place, the cedent and
the cessionary must have the intention to transfer based on an justa
causa
. It is in respect of the last mentioned requirement that
the Plaintiff’s claim is lacking in substance. It is to be
noted that the exception cannot be determined on the basis that there
may be a causa, which may or may not be defective. On
exception stage (and in the absence of an allegation of causa)
and given the application of the parole-evidence rule, no causa
be assumed (not even a defective one).







[15] He also referred the Court to the
commentary on cession of action by Johannes A Sande translated by Dr
Anders, where the following is stated at page 14.







3. “Again the causa
required must be such as is proper and sufficient for the transfer of
corporeal as well as incorporeal things: for example purchase; the
giving of dowry; payment; donation, and the like”.







4. “A further requirement is
that the cause of cessions shall be real, and not fictitious or
imaginary”.







5. “It is not necessary that the
title should be specifically mentioned in the document, but it is
sufficient that the existence of it can be gathered by inferences and
from the surrounding circumstance just as if it were expressed in the
document. Caius has ceded to Sempronius his actions
against Maevius for the sum of one hundred florins: from the
addition of a price the title of purchase is concluded, as Bartolus
points out and reports that it has been so decided. This opinion is
embraced by the authorities, as Alexander trentacinquius
proves”.







6. “By the authority of a very
recent Frisian statue no cessions are recognised by the Court unless
the causa or titulus are set forth and if the causa
is purchase the amount of the price must be stated”. The
Frisian statue referred to by Sande is part of the common law of
Namibia as rightly pointed out by Mr. Heathcote SC. In Frans Paschke
and others 2007(2) NR 520(8c), the court said the following:







[14] The
common law referred to in art 66 of the Namibian Constitution
embraces, fully, the concept of ‘Roman-Dutch law as existing
and applied in the Cape of Good Hope’, as explained by Gutsche
J in the Tittle case supra. Accordingly, Roman-Dutch law which was
applied in the Cape of Good Hope through legislation, judicial
precedent,
custom
or the pre-codal system of old authorities

(such
as the decisions of the High Court of Holland, Grotius, Voet, etc) is
common law as envisaged in art 66 of the Namibian Constitution to the
extent it has not fallen into disuse. This becomes abundantly clear
if regard is had to the wording of s 1(1) of the Administration of
Justice Proclamation which provides that the Roman-Dutch law as
existing and applied in the Province of Good Hope … shall ….
Be the common-law of the Protectorate. The concept ‘common law’
as used in the proclamation, and ‘common law’ as used in
art 66 of the Namibia Constitution, must and does have the same
meaning.”







[16] In Mclachlan v Wiemand 1913
(J) at 195
the court stated that:







And
cession is nothing but the special mode in which other persons may
acquire rights therein. As Sande says (De Actionum cession, 2, 2, 4),
the only requisite is that there must be the same consideration
(
causa)
as is required for the transfer of corporeal things such as sale,
dowry, payment, donation and the like. And that consideration must be
genuine and not unlawful or fictitious”.







Plaintiff’s submissions:







[17] In support of his contention that
the intention to transfer and the intention to acquire is clear from
the cession, Mr. van Rensburg referred this Court to the case of
First National Bank v Lynn & others 1996 (2) SA 339 (A)
where the court stated (at 339) that:







cession
is a particular method of transferring rights in a movable
incorporeal thing in the same manner in which delivery (traditio)
transfers rights in a movable corporeal thing. It is in substance an
act of transfer (oordragshandeling) by means of which the transfer of
a right (translatio juris) from the cedent to the cessionary is
achieved. The transfer is accomplished by means of an agreement of
transfer (oordrags-ooreenkoms) between the cedent and the cessionary
arising out of
justa
causa

from which the former’s intention to transfer the right (animus
transferendi) and the latter’s intention to become the holder
of the right (animus acquirendi) appears or can be inferred”.








[18] First National Bank supra,
is clearly also authority for the proposition that there must be
a justa causa which is clear from the cession or can be
inferred from the surrounding circumstances.







[19] He further referred this Court to
the case of Commissioner of Customs & Excise v Randles,
Brothers & Hudson Ltd 1941 AD 369
as authority for his
contention. The facts in that case where briefly as follows (as per
the headnote):-



Prior to
1925 it was the practice of the defendant company (Randles, Brothers
& Hudson Ltd) to import goods and then transfer them under a form
prescribed by regulation to a registered manufacturer to be made up
into shirts and pyjamas for the defendant upon the cut, make and trim
principle. Under the existing regulations, framed under Act 36 of
1925, such goods were imported under rebate of customs duty. In 1936,
new regulations were promulgated recalling that, in such
circumstances, in order that the goods might be imported under rebate
of duty, the registered manufacturer to whom the importer transferred
the goods should make a declaration that the goods were his own
property. The defendant, thereupon, with the intention of complying
with the new regulations, changed its procedure and purported to sell
the goods to the manufacturer and at the same time agreed to purchase
the garments at the price of the sum at which the goods had been
sold, plus the costs of making. The goods were duly delivered to the
manufacturer, who signed the appropriate form declaring that the
goods were his own property. Payments were effected when the
manufacturer delivered the garments he had made, the final result
being that the defendant paid in cash and the manufacturer received
the agreed costs of manufacturing the garments. The commissioner of
Customs contended that, not withstanding the procedure adopted by the
defendant the latter (defendant) remained at all times the owner of
the goods and that it was liable to pay full duty upon such goods.



The court held that assuming it was
a necessary implication from the regulations that it was a condition
precedent to a rebate of duty that the ownership in the goods had in
fact passed from the importer to the manufacturer, on the facts the
plaintiff (Commissioner) had not proved that the contracting parties
did not genuinely mean to enter into contract of sale and to transfer
ownership of the goods when delivery was made in pursuance of those
contracts, and that ownership in the goods had passed to the
manufacturer, not withstanding the special features present in the
transaction and not withstanding that the manufacturer had bound
himself contractually to deal with the goods delivered to him in a
certain manner only.







[20] It was further held as per
Watermeyer JA at (398-9) that: “If the parties desire to
transfer ownership and contemplate that ownership will pass as a
result of the delivery, then they in fact have the necessary
intention and the ownership passes by delivery. It was contended,
however, on behalf of the appellant that delivery accompanied by the
necessary intention on the part of the parties to the delivery is not
enough to pass ownership; that some recognised form of contract (a
causa habilis…) is required in addition. I do not agree with
that contention. The habilis causa referred to by Voet means merely….
an appropriate reason for the transfer or a serious and deliberate
agreement showing an intention to transfer.” At 411 Centlives
JA held that:















A
wide meaning must be given to the words “
justa
causa”

or
causa
habilis
...[A]
all that these words mean in the context I am at present considering
is that the legal transaction preceding the traditio may be evidence
of an intention to pass and acquire ownership. But there may be
direct evidence of an intention to pass and acquire ownership and, if
there is, there is no need to rely on a preceding legal transaction
in order to show that ownership has, as a fact, passed. To put it
more briefly it seems to me that the question whether ownership
passed depends on the intention of the parties and such intention may
be proved in various ways”.







[21] According to Mr. Van Rensburg the
intention to transfer and the intention to acquire is clear from the
cession.







[22] The facts in Commissioner of
Customs and Exercise
supra are distinguishable from the
facts in the case at hand. That case was not dealing with transfer of
ownership based on a cession. It is also clear from those facts that
the justa causa for the transfer of ownership was the sale”.
The Commissioner of Customs and Exercise supra is
therefore no authority for the contention by Mr. Van Rensburg.







[23] Mr. Van Resnburg further
submitted that the defendant is not a party to the cession, and
whatever the justa causa is that preceded the cession (or can
be inferred from the cession) is in any event only relevant visa vis
the cedent and the cessionary and not the defendant. All that needs
to be established is the cedent’s intention to transfer (animus
transferendi)
and the cessionary’s intention to acquire
(animus acquirendi), which is unequivocally inferred from the
cession. It is therefore not necessary to plead the justa causa
as it also be inferred.







[24] Although I agree that the
defendant is not party to the cession, the reason (causa) for
the claim against the defendant is the cession. As pointed out by
Sande and the authorities referred to by Mr. Heathcote, SC, the justa
causa
must be apparent from the document or from the surrounding
circumstances.







[25] Mr. van Rensburg also submitted
that the defendant has all the defences available against the
cessionary that it has against the cedent and the defendant can raise
its defences in its plea. (See Scottish Rhodesian Finance Ltd v
Olivier 1965 (2) SA 716.







[26] I agree with that submission,
provided of course, it is clear from the cession what the justa
causa
is, otherwise how can it (the defendant) attack the cession
if the justa causa is not apparent from the document or from
the surrounding circumstances?







[27] I therefore come to the
conclusion that it is an essential requirement of our law that for a
cession to be valid there must be a real and genuine (not fictitious)
justa causa which is apparent from the cession document or
which can be inferred from the surrounding circumstances. The cession
in this case (“KBI”) is totally silent as to what the
justa causa is, nor can this Court infer it from the
surrounding circumstances.







The second ground of exception:



















[28] Mr. Heathcoat, SC, submitted that
the one party, i.e WPK Agriculture, to the transfer agreement was not
in existence or known by its name, when the alleged cession “KB1”
was allegedly entered into. Mr. Van Rensburg, on the other hand,
submitted that ex facie the document “KB1” it is
clear that the same legal entity continues to exist with the same
registration number albeit with a different name.







On its own admission the name of WPK
Agriculture Ltd was changed to Kaap Agri Bedryf Ltd. This was on the
9th September 2005.







The so called cession “KB1”
was entered between WPK Agriculture Ltd and Agri Orange Pty Ltd on
the 30 September 2005. WPK Landbou a non existing entity and could
not enter into a cession with Agri Orange. Although the registration
numbers are the same, that does not detract from the fact that at the
time of entering the cession “KB1” WPK Agriculture was
non existent.







In the result the second ground of
exception must also succeed.







The order:























[29] In the result I make the
following order:








  1. The first and second grounds of the
    exception are upheld with costs.
















__________________________________



NDAUENDAPO, J



























































































ON BEHALF OF THE PLAINTIFF: Adv.
Heathcote SC



INSTRUCTED BY: Van Der Merwe-Greeff
Inc.











ON BEHALF OF THE DEFENDANT: Mr. Van
Rensburg



INSTRUCTED BY: Grobler & Co