SA Breweries Ltd v Van Zyl (381/2004) [2005] ZASCA 93; 2006 (1) SA 197 (SCA) (29 September 2005)

SA Breweries Ltd v Van Zyl (381/2004) [2005] ZASCA 93; 2006 (1) SA 197 (SCA) (29 September 2005)

The court held that the respondent's liability as surety was limited to debts owed by Gensam to SAB 69 at the date of cession, namely 4 March 1999, and for outstanding orders for goods in transit. The rule 'huur gaat voor koop', which applies to leases, does not apply to cession of debts. SAB 98 could only claim debts that existed at the time of cession, as it could not acquire rights to future debts unless specifically provided for in the deed of suretyship. There was no evidence that any amount was owed to SAB 69 at the date of cession, and all subsequent purchases were made from SAB 98. Therefore, the respondent was not liable for debts incurred after the cession, and the action...

Citation
[2005] ZASCA 93
Parties
Appellant: S A Breweries Limited; Respondent: Pieter van Zyl
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 September 2005
Case Number
381/2004
Procedural Posture
Civil Appeal / Appeal From Dismissal of Action in the Court a Quo
Outcome
Appeal dismissed with costs.
Judges
Mpati, Brand, Jafta, Mlambo, Cachalia
Legal Topics
Cession of Debt, Suretyship Liability, Assignment of Obligations, Huur Gaat Voor Koop Rule
Commercial and Corporate Civil Procedure Cession of Debt Suretyship Liability Assignment of Obligations Huur Gaat Voor Koop Rule

Case Brief

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Parties

S A Breweries Limited

Appellant

Pieter van Zyl

Respondent

Procedural Posture

Civil Appeal / Appeal From Dismissal of Action in the Court a Quo

Legal Issues

  1. 1 What is the extent of a surety's liability when the creditor cedes claims to a new owner who continues to give credit to the debtor.
  2. 2 Does the rule 'huur gaat voor koop' apply to the law of cession of rights and obligations.
  3. 3 Is the surety liable for debts incurred after the cession or only for debts existing at the date of cession.

Ratio Decidendi

The court held that the respondent's liability as surety was limited to debts owed by Gensam to SAB 69 at the date of cession, namely 4 March 1999, and for outstanding orders for goods in transit. The rule 'huur gaat voor koop', which applies to leases, does not apply to cession of debts. SAB 98 could only claim debts that existed at the time of cession, as it could not acquire rights to future debts unless specifically provided for in the deed of suretyship. There was no evidence that any amount was owed to SAB 69 at the date of cession, and all subsequent purchases were made from SAB 98. Therefore, the respondent was not liable for debts incurred after the cession, and the action...

Court Disposition

Appeal dismissed with costs.

Orders

  • The appeal is dismissed with costs.