Court name
High Court
Case number
1343 of 2000
Title

Wessels NO v Aussenkhr farms (Pty) Ltd (1343 of 2000) [2012] NAHC 255 (04 October 2012);

Media neutral citation
[2012] NAHC 255
Coram
Shivute J













HIGH COURT OF NAMIBIA
MAIN DIVISION, WINDHOEK



JUDGMENT







Case no.: I 1343/2000



In the matter between:























GEORGE FREDERICK
WESSELS N.O PLAINTIFF







and














AUSSENKEHR
FARMS (PTY) LTD



DEFENDANT








Neutral
citation:
Wessels v Aussenkhr farms (Pty) Ltd (I 1343/2000)
[2012] NAHCMD 10(04 October 2012)



Coram: SHIVUTE J



Heard on: 8 May
2002



Delivered on: 04
October 2012







Flynotes: Oral
agreement for the supply and delivery of agricultural chemicals by
the plaintiff to defendant- existence of the agreement disputed –
Issue of locus standi and prescription raised in limine by
the defendant.



Summary: Points in
limine raised by the defendant – On prescription, counsel for
the defendant argues that the date on which the agricultural
chemicals were delivered because that is the date on which the
defendant became liable to pay the amount – Such argument based
on s 12(1) of the Prescription Act, 1969 (Act 68 of 1969) –
Facts reveal that Africur CC ceded all its rights, title and interest
in any and all debts which are owed or become owing to it to ABSA and
Sanachem – Counsel for defendant argues that it is trite law
that in the context of a cession of a debt, the cessionary replaces
the cedent and has exclusive right to claim the debts so ceded –
Action instituted by another party apart from plaintiff does not
interrupt prescription.



Held - Trite law
that a cedent cannot claim for repayment of a debt ceded by it -
Africur CC ceded to Sanachem all its reversionary rights in terms of
any debts ceded to any other financier or discounter and not its
reversionary rights in respect of its debt towards Sanachem –
That the law applicable is that of insolvency as contained in the
Insolvency Act, 1936 ( Act 24 of 1936) – Section 83 of the
Insolvency Act – Issues is whether the ‘creditor’
involved a cedent or the cessionary – Insolvency law
accordingly applicable where the cessionary’s estate is
declared insolvent .







Held – Upon
the insolvency of the debtor’s estate the ceded debt vests in
the trustee (being the liquidator in the present case) subject to the
cessionary’s special rights, namely a guaranteed security –
The trustee is therefore in law entitled to claim payment from the
debtors of the insolvent Africur CC – Plaintiff does thus have
locus standi to institute these proceedings – The
court therefore held that the remaining issue to be determined is
whether Africur CC was authorized to receive the acknowledgments of
debt from the defendant which would interrupt prescription – In
this case Africur CC was expressly prohibited from acting as the
creditor’s agent or partner for any purpose and therefore the
acknowledgments of debts and the agreement to postpone the due date
for payment are of no legal force and consequence .







Held: That only
upon insolvency of the cedent's estate do the proceeds of the ceded
debt vest in the trustee, prior to this the ceded debt vests in the
cessionary’s estate – In the event the cessionary’s
estate is declared insolvent, the proceeds of the said debt remain in
the cessionary’s estate until the debt by the cedent is settled
– Prescription was accordingly not interrupted and the claim
therefore prescribed prior to the date on which it was instituted.







ORDER



The following order is
made:




  1. The answers to the
    questions posed in the case stated are as follows:





  1. The plaintiff does have
    locus standi to institute these proceedings.



  2. The claim against the
    defendant has prescribed.




2. One of the special
pleas raised by the defendant has been upheld with costs, such costs
to include the costs of one instructing and one instructed counsel.



______________________________________________________________________



JUDGMENT



______________________________________________________________________SHIVUTE
J:
[1] The plaintiff, in his capacity as a duly appointed
liquidator in the insolvent estate of a close corporation known as
Africur Close Corporation (Africur CC), instituted action in this
court claiming payment in the amount of R437 479,47 with interest
calculated as set out in para 2 of the plaintiff’s amended
particulars of claim as well as costs of suit. The plaintiff alleged
that this amount was owed to Africur CC pursuant to an oral agreement
in terms of which Africur CC would supply and deliver certain
agricultural chemicals (also referred to in the agreement as ‘goods’)
to the defendant. The defendant in turn undertook to effect payment
for the supply of the said agricultural chemicals within 30 days of
invoice (also referred to in the agreement as ‘statement’).
The parties agreed that interest on the amounts payable would be
calculated at the prime bank rate determined from time to time by
commercial banks in the Republic of South Africa plus 2% calculated
on the amount of the statement, from thirty days of date of
statement. The plaintiff alleged that Africur CC had complied with
its obligations in terms of the oral agreement by delivering
agricultural chemicals worth R437 479,47 and that the defendant had
failed and/or refused to pay the aforementioned amount.







[2] The defendant
admitted that it had refused, but with good reasons, to effect
payment of the amount claimed for by the plaintiff and further
alleged that it was entitled to an abatement of the account due to
returned and/or undelivered goods. The defendant denied the existence
of an oral agreement; disputed the prices reflected by the plaintiff
as the prices for the goods allegedly delivered, and denied that all
the goods listed in the plaintiff’s amended particulars of
claim had been delivered to it. The defendant also raised two special
pleas with regard to plaintiff’s claim. Firstly, that the
plaintiff did not have locus standi to institute the claim;
and secondly, that the plaintiff’s claim had prescribed. The
parties have applied that the aforesaid two special pleas raised by
the defendant be adjudicated separately and that the remaining
disputes stand over for later determination.







Admitted facts



[3] By way of a stated
case in terms of rule 33(4) of the rules of Court, the parties agreed
to the following facts, amongst others, relevant to the two special
pleas to be adjudicated upon:







(a) Africur CC delivered
certain agricultural chemicals to the defendant during the course of
1996 and 1997.







(b) Africur CC was placed
in final liquidation on 11 November 1997 and plaintiff was duly
appointed as liquidator in the insolvent estate of Africur CC on 26
November 1997.







(c) The last delivery by
Africur CC of the aforementioned agricultural chemicals to the
defendant occurred on 25 July 1997. The defendant agreed to assume
that, solely for the purposes of the stated case, said delivery took
place. The invoice for said delivery was dispatched to defendant on
31 July 1997.







(d) On 15 May 1996
Africur CC entered into a written agreement with Sanachem (Pty) Ltd
(Sanachem) in terms of which it had ceded all its rights, title and
interest in and to all claims that it may acquire from time to time
against any of its debtors, howsoever arising and ceded, assigned and
transferred to Sanachem all reversionary rights and all residual
rights, title and interest in and to all debts already ceded to any
financier or discounter. The agreement provided that Africur CC
undertook inter alia, not to act as agent or partner of
Sanachem (or Sentrachem).







(e) On 19 August 1996
Africur CC concluded a written agreement with ABSA Bank Limited
(ABSA) and Cuffin (Pty) Ltd styled ‘Invoice Discounting
Agreement’ in terms of which it ceded, assigned and made over
to ABSA all its rights, title and interest in and to all amounts
whatsoever nature, howsoever arising and by whomsoever owing to
Africur CC or which may at any future time become owing to Africur
CC.







(f) Plaintiff has not
pleaded that Africur CC at any stage acted as agent on behalf of
either Sanachem and/or ABSA.







(g) At the time when this
action was instituted both cession agreements were valid and in
operation.







(h) Africur CC placed on
record that it at no stage to date of filing the stated case incurred
any financial liability to ABSA; conducted any business relationship
with ABSA; and ABSA had not endeavoured to enforce the agreement or
to rely thereon.








  1. On 31 July 1997 and 11
    August 1997 the defendant acknowledged liability to the plaintiff in
    terms of the debt, which acknowledgements are accepted by both
    parties as constituting admissions to Africur CC of a liability to
    pay Africur CC’s claim.









  1. Africur CC has at all
    times collected debts owing to it and recovered same with the full
    knowledge and consent of Sanachem and Sanachem never collected such
    debts.








Counsel’s
submissions



[4] The plaintiff was
represented by Mr D G Grobler while the defendant was represented by
Mr T A Barnard.







[5] By agreement between
the parties, counsel for the defendant was heard first on the special
pleas raised by the defendant since the defendant bore the onus in
that regard. As mentioned before, one of the special pleas raised by
counsel for the defendant was that of prescription. Counsel submitted
that prescription should run from the date on which the agricultural
chemicals were delivered because that is the date on which the
defendant became liable to pay the amount. This, he submitted is the
correct interpretation to be given to s 12(1) of the Prescription
Act, 1969 (Act 68 of 1969).
1
He contended that the
last date upon which prescription would have commenced running was on
25 July 1997 and would have been completed on 25 July 2000. In the
event that the court should find that prescription had been
interrupted by the acknowledgments of liability made by the defendant
on 11 August 1997, counsel argued that then prescription would have
been completed by 11 August 2000. It is common cause that the summons
in these proceedings was served upon the defendant on 8 August 2000.
Counsel for the defendant submitted furthermore that the claim had
clearly prescribed if it had not been interrupted by the
acknowledgments of liability. He went on to argue, however, that the
acknowledgments did not interrupt prescription by virtue of the
second special plea raised by the defendant, namely that by either or
both cession clauses Africur CC had divested itself of all and any of
its rights and/or entitlement to claim against defendant and that any
party whose standing relating to the enforcement of the claim of
Africur CC, is dependent on the rights of Africur CC. Plaintiff is
such a party and therefore has no standing to enforce the claim
against the defendant.







[6] It was counsel for
the defendant’s further submission that the phrase 'due'
employed in s 12(1) of the Prescription Act, 1968 (the Act) should be
interpreted as meaning the date from which the plaintiff could issue
summons and/or enforce payment of the amount owing. The agreement
between the parties provided that the defendant would make payment
for the deliveries within 30 days from the date upon which the
invoice (referred to in the agreement as ‘the statement’)
had been issued to the defendant. In the light of the fact that the
last statement had been issued to the defendant on 31 July 1997 and
payment should have been effected before 30 August 1997, prescription
would only commence, so it was submitted, from this date and be
completed on 30 August 2000. Counsel for the defendant further
contended that the defendant and Africur CC had agreed to postpone
the due date of payment by the defendant until 15 January 1998, being
the date upon which the harvest season would end. Therefore, so
counsel argued, prescription commenced afresh from 15 January 1998
and is completed on 15 January 2001. He further submitted that
Africur CC was entitled to agree to such an acknowledgement and
postponement of the due date for payment. In making this submission,
counsel relied on the reasoning adopted in the judgment of the South
African Supreme Court of Appeal in Aussenkehr Farms (Pty) Ltd v
Trio Transport CC 22(4) SA 483 (SCA).







[7] The second special
plea raised by counsel for the defendant, namely that plaintiff’s
claim had prescribed has a direct bearing on the counter argument
made by him in meeting counsel for the plaintiff’s submissions
on the point. For this reason the discussion on prescription and the
counter argument will be amalgamated into a single discussion.







[8] It will be
recollected that counsel for the defendant raised the absence of
locus standi as a special plea. It will also be recalled that
Africur CC ceded all its rights, title and interest in any and all
debts which are owed or become owing to it to ABSA and Sanachem.
Counsel for the defendant listed numerous cases in support of the
contention that Africur CC was no longer a creditor of the defendant.
He went on to argue that it is trite law that in the context of a
cession of a debt, the cessionary replaces the cedent and has
exclusive right to claim the debts so ceded. The cession to Sanachem
or ABSA not having been cancelled, either Sanachem or ABSA are the
holders of all the rights in a claim against the defendant and is the
only creditor of the defendant recognized by law. The agreement
between Africur CC and Sanachem states explicitly that Africur CC
must not act as its agent or partner. Therefore, in the light of
these facts, the defendant submitted, Africur CC or any of its
agents, including the duly appointed liquidator (the plaintiff), may
not sue on behalf of Sanachem (who is the creditor) and more
particularly not in his own name (as the liquidator in this case has
done) for the debts ceded (including the debt owed by the defendant)
to Sanachem. The defendant’s counsel further submitted that the
acknowledgments of debt made by the defendant to Africur CC did not
interrupt prescription, for the reason that such acknowledgements
must be made to the creditor, its agent or representative, of which
the plaintiff is none. The plaintiff not having instituted action in
his capacity as creditor of the defendant, the institution of the
action by him on 8 August 2000 or on any date thereafter did not
interrupt the running of prescription. The claim became prescribed on
11 August 2000. Therefore, the acknowledgements and the action
instituted are of no legal force or effect. The plaintiff’s
claim is essentially the claim of Africur CC which was later ceded to
Sanachem or ABSA. The claim having prescribed, the liquidator in the
estate of Africur CC had not had any entitlement or standing to
pursue the proceedings on behalf of an insolvent entity that had
divested itself of the of all rights in such claim against the
defendant.







Analysis of the facts
and the law



[9] In an attempt to
assist the Court to decide whether the plaintiff’s claim has in
fact prescribed as submitted on behalf of the defendant, both parties
submitted differing arguments as to the interpretation to be given to
the term ‘due’ used in s 12(1) of the Act. The phrase
‘due’ is not defined in the Act. However, in the context
in which the term has been employed in this specific section, it has
been defined by case law and its definition has been approved in many
cases. One such case is Western Bank Ltd v S J J Van Vuuren
Transport (Pty) Ltd and Others
1980 (2) SA 348 (T) at 349 where
it was stated in the headnote as follows:







The words
"debt is due" in s 12(1) of the Prescription Act 68 of 1969
must be given their ordinary meaning, namely that the debt is
immediately claimable or the debtor is under an obligation to pay the
debt immediately.’











The matter of List v
Jungers
1979 (3) SA 106 (AD) draws a
distinction which sheds ample light on any remaining doubts that may
exist in the meaning to be given to the word ‘due’. At
121 C – D it is stated as follows:







The
difference relates to the coming into existence of the debt on the
one hand and the recoverability thereof on the other hand. See
Apalamah
v Santam Insurance Co Ltd and Another
1975
(2) SA 229 (D) at 232. It is a distinction which is recognised by the
Legislature in the 1969 Prescription Act; s 12 provides that
prescription begins to run “as soon as the debt is due”,
whereas s 16, which relates, not to the running of prescription, but
to the application of the Act, significantly refers to “a debt
which arose”.’











[10] In applying the
above principles to the facts of this case, it is clear that the date
upon which the plaintiff could institute action against the defendant
is the date upon which prescription had commenced. The last date upon
which delivery was made is 25 July 1997, as agreed between the
parties. The defendant had to effect payment of the amount it owed to
plaintiff thirty days from the date of statement. Therefore on 30
August 1997 (date of invoice was 31 July 1997), prescription had
commenced and the debt became due and payable, thus the last
requirement necessary to institute the action was met. Before this
date, plaintiff could not immediately institute action for the
recovery of the amount due. Prescription was completed on 30 August
2000. Whether any event had interrupted the running of prescription,
will be discussed later in this judgment.







[11] As previously
mentioned, the remaining aspect of the special plea raised by the
defendant was the alleged lack of locus standi on the part of
the plaintiff and Africur CC. It will be recalled that Africur CC
ceded all its rights, title and interest in any and all debts
accruing to it to ABSA and Sanachem. In terms of the written
agreement, being a cession securitatem debiti with Sanachem,
Africur was prohibited from acting as agent or partner of Sanachem.
Therefore, so defendant’s counsel submitted, the plaintiff had
no locus standi to enforce the claim and the proceedings
instituted by him do not interrupt prescription and are of no legal
force or effect. This, counsel for the defendant contended, is the
correct interpretation to be given to s 15(1) of the Act, in terms of
which the creditor must serve notice on the debtor of any process
whereby the creditor claims payment of a debt. Counsel cited and
quoted numerous cases in which this point was confirmed and submitted
that it had become trite law that a cedent cannot claim for repayment
of a debt ceded by it.







[12] While conceding that
the position contended for by counsel for the defendant on this score
represents the correct position in law, counsel for the plaintiff
argued, that the principles set out in the cases cited by counsel for
the defendant were not of application in the present case for the
reason that the law of insolvency rather was applicable in this case
and therefore the above principles were to be applied subject to the
Insolvency Act, Act 24 of 1936 (the Insolvency Act).







[13] Counsel for the
defendant’s counter-argument on this score was that the
Insolvency Act was not of application at all to this case since
neither the defendant nor Sanachem (the creditor) was insolvent. Sec
83 of the Insolvency Act reads as follows and it has become necessary
to quote the section in full:







83
Realization of securities for claims








  1. A creditor of an insolvent estate who
    holds as security for his claim any movable property shall, before
    the second meeting of the creditors of that estate, give notice in
    writing of that fact to the Master, and to the trustee if one has
    been appointed.









  1. If such property consists of a
    marketable security or a bill of exchange, the creditor may, after
    giving the notice mentioned in subsection (1) and before the second
    meeting of creditors, realize the property in the manner and on the
    conditions mentioned in subsection (8).









  1. If such property does not consist of
    a marketable security or a bill of exchange, the trustee may, within
    seven days as from the receipt of the notice mentioned in subsection
    (1) or within seven days as from the date upon which the certificate
    of appointment issued by the Master in terms of subsection (1) of
    section eighteen or subsection (2) of section fifty-six
    reached him, whichever be the later, take over the property from the
    creditor at a value agreed upon between the trustee and the creditor
    or at the full amount of the creditor's claim, and if the trustee
    does not so take over the property the creditor may, after the
    expiration of the said period but before the said meeting, realize
    the property in the manner and on the conditions mentioned in
    subsection (8).









  1. If no trustee has been appointed
    before the said meeting, the creditor may, with the permission in
    writing of the Master and before the said meeting, realize in manner
    and on the conditions mentioned in subsection (8) any such property
    which he is not entitled to realize in terms of subsection (2).









  1. The creditor shall, as soon as
    possible after he has realized such property, prove in terms of
    section forty-four the claim thereby secured and he shall
    attach to the affidavit submitted in proof of his claim a statement
    of the proceeds of the realization and of the facts on which he
    relies for his preference.









  1. If he has not so realized such
    property before the second meeting of creditors, he shall as soon as
    possible after the commencement of that meeting deliver the property
    to the trustee, for the benefit of the insolvent estate and if the
    creditor has not delivered the said property to the trustee within a
    period of three days as from the commencement of the said meeting
    the trustee may demand from him delivery of such property. If the
    creditor fails to comply with such demand of the trustee, the
    Master, at the request of the trustee and after notice to the
    creditor shall direct the deputy-sheriff within whose area of
    jurisdiction the property is situate to attach the property and to
    deliver it to the trustee, and in that case the creditor shall be
    liable for the deputy-sheriff's costs, as taxed and allowed by the
    Master. If those costs cannot be recovered from the creditor, they
    shall be paid out of the estate as part of the costs of the
    sequestration.









  1. When the trustee has received the
    property mentioned in subsection (6), the said creditor may prove
    his claim and place a value upon the said property in terms of
    subsection (4) of section forty-four.









  1. The creditor may realize such
    property in the manner and on the conditions following, that is to
    say-








(a) if it is any property of a class
ordinarily sold through a stockbroker the creditor may forthwith sell
it through a broker approved of by the trustee or the Master;







(b) if it is a bill of exchange, the
creditor may realize it in any manner approved of by the trustee or
by the Master;







(c) if it consists of a right of
action, the creditor shall not realize it except with the approval of
the trustee or of the Master;







(d) if it is any other property, the
creditor may sell it by public auction after affording the trustee a
reasonable opportunity to inspect it and after giving such notice of
the time and place of the sale as the trustee directed.







(9) As soon as the trustee has
directed a creditor in terms of paragraph (d) of subsection (8) to
give notice of a sale by public auction, the trustee shall give
notice in writing to all the other creditors of the estate in
question of the time and place of the proposed sale.







(10) Whenever a creditor has realized
his security as hereinbefore provided he shall forthwith pay the net
proceeds of the realization to the trustee, or if there is no
trustee, to the Master and thereafter the creditor shall be entitled
to payment, out of such proceeds, of his preferent claim if such
claim was proved and admitted as provided by section forty-four
and the trustee or the Master is satisfied that the claim was in fact
secured by the property so realized. If the trustee disputes the
preference, the creditor may either lay before the Master an
objection under section one hundred and eleven to the
trustee's account, or apply to court, after notice of motion to the
trustee, for an order compelling the trustee to pay him forthwith.
Upon such application the court may make such order as to it seems
just.







(11) If a creditor has valued his
security when proving his claim, the trustee, if authorized by the
creditors, may, unless the creditor has realized his security in
terms of subsection (2) or (3), within three months as from the date
of his appointment or as from the date of the proof of the claim
(whichever is the later) take over the property (whether movable or
immovable) which constitutes the security at the value placed thereon
by the creditor when his claim was proved: Provided that if two or
more creditors have a pledge or special mortgage of the same
property, a creditor who has valued his security shall be deemed to
have valued, and the trustee shall be entitled to take over, only the
preferent rights of the creditor in respect of the property, and not
the property itself. If the trustee does not, within that period,
take over the said property or security he shall realize it for the
benefit of all creditors whose claims are secured thereby, according
to their respective rights.







(12) If the claim of a secured
creditor exceeds the sum payable to him in respect of his security he
shall be entitled to rank against the estate in respect of the
excess, as an unsecured creditor, and if the net proceeds of any such
property exceed all claims secured thereby the balance, after payment
of those claims, shall be added to the other free residue (if any) in
the estate in question.







(13) The preceding provisions of this
section shall apply mutatis mutandis in respect of any
creditor for value of a solvent spouse mentioned in section
twenty-one, who holds as security for his claim against that
spouse any movable property belonging to that spouse.’











[14] The issue to be
decided here is whether 'creditor' mentioned in s 83(1) includes the
cedent or the cessionary.







[15] In Bank of Lisbon
and South Africa Ltd v The Master and Others
1987 (1) SA 276 (A),
Galgut AJA stated that in cessions in securitatem debiti, as
in all contracts, the purpose and object which the parties had in
mind must not be ignored. The cession agreement between Africur CC
and ABSA provides that the rights, title and interest in and to all
debts accruing to Africur CC is ceded to ABSA 'as security for the
due and punctual payment by the seller to ABSA of all amounts…owing
by
[Africur CC] to ABSA'. This clearly envisages an
intention for the cession to be one in securitatem debiti.







[16] In the stated case,
the parties agreed that the cession agreement with Sanachem is one in
securitatem debiti
. The question that now arises is whether any
of these two cessionaries were creditors of Africur CC at the time
Africur CC was liquidated. Africur CC was not indebted to ABSA at any
stage to date of filing the statement of the case. This much has been
agreed. It was, however, indebted to Sanachem. The proceeds of the
debts ceded therefore fall into the estate of Sanachem, even upon
Africur CC’s insolvency. The aforementioned proceeds therefore
accrue to the estate of Sanachem and not to Africur CC. The situation
illustrated above is accordingly applicable where the cessionary’s
estate is declared insolvent. When the cedent’s estate is
declared insolvent, the following becomes applicable:







[17] In Land– en
Landboubank van Suid-Afrika v Die Meester en Andere
1991 (2) SA
761 (A) it was stated in the headnote as follows:







'...where a debtor pledged his rights
of action in securitatem debiti, the debtor as cedent retained
dominium of such rights in the form of a reversionary interest
therein, while the creditor as cessionary acquired a restricted real
right in the rights of action to exercise such right in the event of
non-payment of the principal debt;







...in the event of insolvency of the
debtor, the debtor's reversionary interest vested in the trustee of
the insolvent estate while the creditor acquired a guaranteed
security which conferred upon him a preferential right to the right
of action.







further,
that the Land Bank was in terms of s 34(3)(b) entitled to attach S's
(cedent) reversionary interest, but not the ceded rights of action
held by O Co-op (cessionary) as guaranteed security.







accordingly,
that O Co-op was entitled to rely on its preferent claim.'







[18] Hefer JA stated in
Millman NO v Twiggs and Another 1995 (3) SA 674 (AD) at 674
that:







When a right
is ceded with the avowed object of securing a debt the cession is
regarded as a pledge of the right in question:
dominium
of the right remains vested with the cedent and vests upon his
insolvency in his trustee, who is under the common law entitled to
administer it “in the interests of all the creditors, with due
regard to the special position of the pledge”.’











[19] It is necessary to
recapitulate by noting that Africur CC ceded to Sanachem all its
reversionary rights in terms of any debts ceded to any other
financier or discounter and not its reversionary rights in respect of
its debt towards Sanachem.







[20] Thus upon the
insolvency of the debtor’s estate the ceded debt vests in the
trustee (being the liquidator in the present case) subject to the
cessionary’s special rights, namely a guaranteed security. The
sequestration of a debtor’s estate, such as Africur CC,
establishes a
concursus
creditorium
.
Consequently, nothing may be done by any of the creditors to alter
the rights of other creditors
2.
‘Movable property’ referred to in sect 83(1) of the
Insolvency Act is defined in sec 2 as meaning ‘any kind of
property and any right or interest which is not immovable property’.







[21] Sec 2 of the
Insolvency Act defines the word ‘security’ referred to in
sec 83 as follows:







Security, in
relation to a claim of a creditor of an insolvent estate, means
property of that estate over which the creditor has a preferent right
by virtue of any special mortgage, landlord’s hypothec, pledge
or right of retention.’







Property’
is defined in the same section as meaning:







movable or
immovable property wherever situate within the Republic and includes
contingent interests in property other than the contingent interests
of a fidei commissary, heir or legatee’











[22] Incorporeal rights
such as the rights obtained by the cession in
securitatem
debiti
are
included in ‘movable property’
3.
The
dominium
in the book debts ceded
by Africur CC to Sanachem and/or ABSA remained with Africur CC as the
cedent. The dominium constitutes a right or interest in property
which in turn constitutes property of the insolvent estate. Sec 83 of
the Insolvency Act is thus applicable. The trustee is therefore in
law entitled to claim payment from the debtors of the insolvent
Africur CC. Plaintiff does thus have
locus
standi
to institute these
proceedings.







[23] The next issue for
decision and which flows from the above finding is that of
representation. Was Africur CC authorized to receive the
acknowledgments of debt from the defendant which would interrupt
prescription?







[24] Firstly, Africur CC
did not receive express authority to act as Sanachem’s agent or
partner in the cession agreement. In fact, it was expressly
prohibited from doing so by the agreement. Counsel for the plaintiff
contended in his oral arguments and with reference to the judgment in
Aussenkehr Farms (Pty) Ltd v Trio Transport that Africur CC
acted as the agent for Sanachem in that it collected the proceeds of
the debt from the defendant and did not pay it directly into
Sanachem’s bank account and there was no embargo placed on the
plaintiff immediately utilizing these proceeds as he saw fit. It was
found in the Trio Transport case that the plaintiff was an
agent of the creditor even if the parties did not specifically plead
agency.







[25] In the Trio
Transport
case the cession agreement expressly provided that the
plaintiff would act as agent for the bank and collect all debts. This
is not the situation here as Africur CC was expressly prohibited from
acting as the creditor’s agent or partner for any purpose. This
appears to me to be an adequate answer to the inquiry; the express
written intention of the parties is to be given force and effect. In
my view therefore the acknowledgments of debts and the agreement to
postpone the due date for payment are of no legal force and
consequence.







[26] In amplification of
the above finding, it is worth pointing out that only upon insolvency
of the cedent's estate do the proceeds of the ceded debt vest in the
trustee, prior to this the ceded debt vests in the cessionary’s
estate. In the event the cessionary’s estate is declared
insolvent, the proceeds of the said debt remain in the cessionary’s
estate until the debt by the cedent is settled. Prescription was
accordingly not interrupted and the claim therefore prescribed prior
to the date on which it was instituted.







Order



[27] In the result, the
following order is made:








  1. The answers to the
    questions posed in the case stated are as follows:









  1. The plaintiff does have
    locus standi to institute these proceedings.









  1. The claim against the
    defendant has prescribed.








2. One of the special
pleas raised by the defendant has been upheld with costs, such costs
to include the costs of one instructing and one instructed counsel.



















__________



P SHIVUTE



JUDGE











APPEARANCES


















APPELLANT:










D
G Grobler


Instructed
by Theunissen, Louw & Partners,Windhoek



DEFENDANT:






T
A Barnard


Instructed
by Diekmann & Associates, Windhoek














1Section
12 (1) thereof provides that: 'Subject to the provisions of
subsection (2) and (3), prescription shall commence to run as soon
as the debt is due'.





2See
Mars: The Law of Insolvency in South Africa 8
th
ed. De La Rey at 136 to 137 and the cases
referred to therein.




3Bank
of Lisbon and South Africa Ltd v The Master (above) at 290I