Densam (Pty) Ltd. v Cywilnat (Pty) Ltd. (470/1988) [1990] ZASCA 120; 1991 (1) SA 100 (AD); [1991] 1 All SA 275 (A) (28 September 1990)

Densam (Pty) Ltd. v Cywilnat (Pty) Ltd. (470/1988) [1990] ZASCA 120; 1991 (1) SA 100 (AD); [1991] 1 All SA 275 (A) (28 September 1990)

The Supreme Court of Appeal held that the bank's claim against Densam was cedable, as the nature of Densam's obligation to pay the overdraft did not make it personal to the extent that it mattered who enforced the claim. The duty of confidentiality between banker and customer does not, in itself, render the claim non-cedable. The wording of the security cession of book debts, which included 'order or assigns', expressly authorized the bank to cede its rights to a third party, and Densam had given advance consent. The evidence showed that the intention was to cede the whole claim, not just part of it, and the accounting entry in the bank's books did not alter the substance of the...

Citation
[1990] ZASCA 120
Parties
Appellant: Densam (Proprietary) Limited; Respondent: Cywilnat (Proprietary) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
28 September 1990
Case Number
470/1988
Procedural Posture
Civil Appeal / Appeal From the Witwatersrand Local Division, Following Confirmation of a Rule Nisi and Oral Evidence.
Outcome
Appeal dismissed with costs.
Judges
Botha, Eksteen, F.H. Grosskopf, Friedman, Nienaber
Legal Topics
Cession of Claims, Delectus Personae, Confidentiality in Banking, Security Cession, Pactum De Non Cedendo, Interpretation of Contracts
Commercial and Corporate Banking and Finance Civil Procedure Cession of Claims Delectus Personae Confidentiality in Banking Security Cession Pactum De Non Cedendo +1 more

Case Brief

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Parties

Densam (Proprietary) Limited

Appellant

Cywilnat (Proprietary) Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From the Witwatersrand Local Division, Following Confirmation of a Rule Nisi and Oral Evidence.

Legal Issues

  1. 1 Whether a bank's claim against its customer for repayment of an overdraft is cedable without the customer's consent.
  2. 2 Whether the rights afforded to the bank in terms of a security cession of book debts are cedable to a third party.
  3. 3 Whether the cession of the bank's claim to the respondent was invalid for only covering part of the debt.

Ratio Decidendi

The Supreme Court of Appeal held that the bank's claim against Densam was cedable, as the nature of Densam's obligation to pay the overdraft did not make it personal to the extent that it mattered who enforced the claim. The duty of confidentiality between banker and customer does not, in itself, render the claim non-cedable. The wording of the security cession of book debts, which included 'order or assigns', expressly authorized the bank to cede its rights to a third party, and Densam had given advance consent. The evidence showed that the intention was to cede the whole claim, not just part of it, and the accounting entry in the bank's books did not alter the substance of the...

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.