Firstrand Bank Limited v Cowin N.O and Others (23020/2016) [2017] ZAGPPHC 1176; 2018 (3) SA 322 (GP) (4 August 2017)

Firstrand Bank Limited v Cowin N.O and Others (23020/2016) [2017] ZAGPPHC 1176; 2018 (3) SA 322 (GP) (4 August 2017)

The court held that Nedbank's rights to the book debts purchased under the IDA were accrued and unaffected by the cancellation of the agreement, in line with the Walker's Fruit Farm principle. The language and context of the IDA and Security Cession confirmed that the cession to Nedbank was out and out, vesting full ownership in Nedbank, and FT retained no rights to those debts. Clauses relied upon by Firstrand did not operate to revert ownership of the debts to FT upon cancellation, nor did they override the completed sales. The court found that Firstrand, as an aggrieved creditor unable to persuade the liquidators to act, had locus standi under section 387(4) of the Companies Act to...

Citation
[2017] ZAGPPHC 1176
Parties
Applicant: Firstrand Bank Limited; Respondent: Monica Gezina Cowin N.O.; Respondent: Lisl Anna Loubser N.O.; Respondent: Nedbank Ltd; Respondent: Master of the High Court (Pretoria); Respondent: Chester Finance (Pty) Ltd; Respondent: Commissioner for the South African Revenue Service (Pretoria); Respondent: ABSA Bank Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
4 August 2017
Case Number
23020/2016
Procedural Posture
Civil Application / First Instance Judgment
Outcome
Application dismissed in respect of the substantive relief sought regarding the reversion of book debts; Firstrand's locus standi confirmed.
Judges
Baqwa
Legal Topics
Company Liquidation, Derivative Action, Cession of Debts, Locus Standi, Contract Interpretation
Commercial and Corporate Civil Procedure Company Liquidation Derivative Action Cession of Debts Locus Standi Contract Interpretation

Case Brief

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Parties

Firstrand Bank Limited

Applicant

Monica Gezina Cowin N.O.

Respondent

Lisl Anna Loubser N.O.

Respondent

Nedbank Ltd

Respondent

Master of the High Court (Pretoria)

Respondent

Chester Finance (Pty) Ltd

Respondent

Commissioner for the South African Revenue Service (Pretoria)

Respondent

ABSA Bank Ltd

Respondent

Procedural Posture

Civil Application / First Instance Judgment

Legal Issues

  1. 1 Whether Firstrand Bank Limited has locus standi to bring a derivative action on behalf of a company in liquidation.
  2. 2 Whether cancellation of the Invoice Discounting Agreement (IDA) affects Nedbank's accrued rights to book debts purchased from FT Group Holdings (Pty) Ltd.
  3. 3 Whether the book debts purchased by Nedbank revert to the insolvent estate upon cancellation of the IDA or remain with Nedbank.

Ratio Decidendi

The court held that Nedbank's rights to the book debts purchased under the IDA were accrued and unaffected by the cancellation of the agreement, in line with the Walker's Fruit Farm principle. The language and context of the IDA and Security Cession confirmed that the cession to Nedbank was out and out, vesting full ownership in Nedbank, and FT retained no rights to those debts. Clauses relied upon by Firstrand did not operate to revert ownership of the debts to FT upon cancellation, nor did they override the completed sales. The court found that Firstrand, as an aggrieved creditor unable to persuade the liquidators to act, had locus standi under section 387(4) of the Companies Act to...

Court Disposition

Application dismissed in respect of the substantive relief sought regarding the reversion of book debts; Firstrand's locus standi confirmed.

Orders

  • Nedbank is to pay to the liquidators of FT Group Holdings (Pty) Ltd the proceeds collected of all existing and future claims and book debts of FT after 29 July 2013, excluding the sum of R93 million collected by Nedbank after 29 July 2013.
  • Each party is to pay its own costs.