Aussenkehr Farms (Pty) Ltd v Trio Transport CC (499/2000) [2002] ZASCA 29 (28 March 2002)

.RTF of original document

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

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CORAM: SMALBERGER ADP, MARAIS, NAVSA, MPATI JJA et LEWIS AJA

HEARD: 7 MARCH 2002

DELIVERED: 28 MARCH 2002

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J U D G M E N T

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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.

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R M MARAIS

JUDGE OF APPEAL

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