Frank v Premier Hangers CC (11821/05) [2007] ZAWCHC 21; 2008 (3) SA 594 (C); (15 May 2007)

Frank v Premier Hangers CC (11821/05) [2007] ZAWCHC 21; 2008 (3) SA 594 (C); (15 May 2007)

The court held that the defendant's plea and counterclaim, on a proper interpretation, contain sufficient allegations to infer that the contracts in question were executory and that the liquidators elected to abide by them. Consequently, the defendant would have had the same rights against the liquidators as against the company, including the right to withhold payment and to counterclaim for damages. However, the defendant's unliquidated counterclaim against the plaintiff as cessionary is bad in law and does not disclose a cause of action, as South African law does not permit a debtor to institute a counterclaim against a cessionary for an amount exceeding the cessionary's claim. The...

Citation
[2007] ZAWCHC 21
Parties
Applicant: Deon Stuart Frank; Respondent: Premier Hangers CC
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
15 May 2007
Case Number
11821/05
Procedural Posture
Exception Application / Exception to Plea and Counterclaim
Outcome
Exception upheld in part; defendant's counterclaim and identified portions of the plea struck out; leave to amend granted; costs awarded half to plaintiff.
Judges
B M Griesel
Legal Topics
Cession, Set Off, Counterclaim, Concursus Creditorum, Locatio Conductio Operis
Civil Procedure Commercial and Corporate Cession Set Off Counterclaim Concursus Creditorum Locatio Conductio Operis

Case Brief

Summary, issues, holding and outcome

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Parties

Deon Stuart Frank

Applicant

Premier Hangers CC

Respondent

Procedural Posture

Exception Application / Exception to Plea and Counterclaim

Legal Issues

  1. 1 Whether the defendant's plea and counterclaim disclose a valid defence or cause of action.
  2. 2 Whether the cession of the company's claims to the plaintiff is valid and enforceable.
  3. 3 Whether the defendant may raise a counterclaim against the cessionary exceeding the ceded claim.

Ratio Decidendi

The court held that the defendant's plea and counterclaim, on a proper interpretation, contain sufficient allegations to infer that the contracts in question were executory and that the liquidators elected to abide by them. Consequently, the defendant would have had the same rights against the liquidators as against the company, including the right to withhold payment and to counterclaim for damages. However, the defendant's unliquidated counterclaim against the plaintiff as cessionary is bad in law and does not disclose a cause of action, as South African law does not permit a debtor to institute a counterclaim against a cessionary for an amount exceeding the cessionary's claim. The...

Court Disposition

Exception upheld in part; defendant's counterclaim and identified portions of the plea struck out; leave to amend granted; costs awarded half to plaintiff.

Orders

  • The exception is upheld in part, and the defendant's counterclaim as well as paragraphs 47 and 48 and prayer (b) of the plea are struck out.
  • The defendant is granted leave to amend its pleadings within 20 days from the date of this order.