Millman NO v Twiggs and Another (610/93) [1995] ZASCA 62; 1995 (3) SA 674 (AD); [1995] 2 All SA 611 (A) (26 May 1995)

Millman NO v Twiggs and Another (610/93) [1995] ZASCA 62; 1995 (3) SA 674 (AD); [1995] 2 All SA 611 (A) (26 May 1995)

The Supreme Court of Appeal held that the cession in securitatem debiti created a pledge over the right to receive payment from Tuna Marine, effective for both debts secured—one owed by the cedent and one by an outsider. The court found no logical or legal basis to distinguish between the two clauses of the cession, as the law permits property to be pledged to secure another's obligation. The Insolvency Act does not codify all aspects of insolvency law, and where it is silent, the common law applies. The common law entitles the pledgee to secured creditor status in respect of both debts. The appellant's argument that the proceeds should be treated as part of the free residue for...

Citation
[1995] ZASCA 62
Parties
Appellant: Millman NO; Respondent: A F Twiggs; Respondent: Tuna Marine Foods (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
26 May 1995
Case Number
610/93
Procedural Posture
Civil Appeal / Appeal From Cape Provincial Division; Judgment Delivered
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Hefer, Vivier, Steyn, F H Grosskopf, Schutz
Legal Topics
Cession in Securitatem Debiti, Pledge of Rights, Insolvency Liquidation, Secured Creditor Status
Commercial and Corporate Civil Procedure Cession in Securitatem Debiti Pledge of Rights Insolvency Liquidation Secured Creditor Status

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 18 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

Millman NO

Appellant

A F Twiggs

Respondent

Tuna Marine Foods (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Cape Provincial Division; Judgment Delivered

Legal Issues

  1. 1 Whether a cessionary who holds a right as security for an outsider's debt is entitled to preferential treatment upon the insolvency of the cedent.
  2. 2 Whether the common law entitles the pledgee to secured creditor status in respect of an outsider's debt when the Insolvency Act is silent.
  3. 3 Whether the liquidator may treat the proceeds of the pledged asset as part of the free residue for concurrent creditors.

Ratio Decidendi

The Supreme Court of Appeal held that the cession in securitatem debiti created a pledge over the right to receive payment from Tuna Marine, effective for both debts secured—one owed by the cedent and one by an outsider. The court found no logical or legal basis to distinguish between the two clauses of the cession, as the law permits property to be pledged to secure another's obligation. The Insolvency Act does not codify all aspects of insolvency law, and where it is silent, the common law applies. The common law entitles the pledgee to secured creditor status in respect of both debts. The appellant's argument that the proceeds should be treated as part of the free residue for...

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.
  • Twiggs is entitled to be treated as a secured creditor in respect of the R300,000 secured by clause 2 of the cession.