Proflour (Pty) Ltd and Another v Grindrod Trading (Pty) Ltd t/a Atlas Trading and Shipping and Another (14397/2009) [2009] ZAKZDHC 75; [2010] 2 All SA 510 (KZD) (15 December 2009)

Parties

Procedural Posture

Urgent Application / Application for Declaratory and Interdictory Relief

Legal Issues

1. 1 Whether the Invoice Discounting Agreements (IDAs) novated and extinguished the Nedbank cessions.
2. 2 Whether the first respondent is entitled to collect the applicants' book debts before the applicants' indebtedness to the second respondent is extinguished.
3. 3 Whether the manuscript limitation in the second applicant's Nedbank cession renders it invalid as a partial cession or for uncertainty.

Ratio Decidendi

The court found that the Invoice Discounting Agreements (IDAs) did not novate or extinguish the Nedbank cessions. The evidence, including the parties' conduct and correspondence, demonstrated no intention to replace the Nedbank cessions; rather, the parties expressly provided for the cancellation of the Nedbank cessions as a prerequisite for performance under the IDAs. The manuscript limitation in the second applicant's Nedbank cession did not render it invalid, as it merely limited the value of the debts ceded and did not constitute an impermissible partial cession. The Nedbank cessions were held to be cessions in securitatem debiti, not out-and-out cessions, as there was no provision...

Court Disposition

Application granted in part: declaratory relief awarded to applicants; first respondent not entitled to collect book debts pending payment of applicants' indebtedness to second respondent.

Orders

• It is declared that pending payment by the applicants of their indebtedness to the second respondent, the first respondent is not entitled, in terms of Annexure D to the founding affidavit of David Fraser Strang, to collect the book debts of the applicants from the applicants' debtors.
• The first respondent is ordered to pay the costs of the applicants.