Venfin Investments (Pty) Ltd v KZN Resins (Pty) Ltd t/a KZN Resins (642/2010) [2011] ZASCA 128; [2011] 4 All SA 369 (SCA) (15 September 2011)

Venfin Investments (Pty) Ltd v KZN Resins (Pty) Ltd t/a KZN Resins (642/2010) [2011] ZASCA 128; [2011] 4 All SA 369 (SCA) (15 September 2011)

The Supreme Court of Appeal found that Venfin failed to establish the existence of an oral compensation agreement with KZN Resins. The evidence and probabilities did not support Thirion's version, and the documentary record was inconclusive. The court held that the cession agreement between Venfin and Fibalogic did not transfer liability for Fibalogic's debts to Venfin, as such liability could only pass by way of delegation, which requires a tripartite agreement. The indemnity furnished by Venfin did not render it liable to KZN Resins under section 156 of the Insolvency Act, as that section applies only to indemnity insurance contracts, not to general indemnities. The appeal was upheld,...

Citation
[2011] ZASCA 128
Parties
Appellant: Venfin Investments (Pty) Ltd; Respondent: KZN Resins (Pty) Ltd t/a KZN Resins
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
15 September 2011
Case Number
642/2010
Procedural Posture
Civil Appeal / Appeal From Kwa Zulu Natal High Court (durban), Judgment Delivered 24 March 2010
Outcome
Appeal upheld; claim in convention and counterclaim both dismissed; costs awarded to appellant including costs of two counsel, with record costs restricted to 10 per cent; cross-appeal dismissed with costs.
Judges
Brand JA, Ponnan JA, Snyders JA, Malan JA, Theron JA
Legal Topics
Cession of Claims, Indemnity, Insolvency Act Section 156, Contractual Liability, Oral Agreement, Counterclaim
Commercial and Corporate Civil Procedure Cession of Claims Indemnity Insolvency Act Section 156 Contractual Liability Oral Agreement Counterclaim

Case Brief

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Parties

Venfin Investments (Pty) Ltd

Appellant

KZN Resins (Pty) Ltd t/a KZN Resins

Respondent

Procedural Posture

Civil Appeal / Appeal From Kwa Zulu Natal High Court (durban), Judgment Delivered 24 March 2010

Legal Issues

  1. 1 Whether an oral compensation agreement was concluded between KZN Resins and Fibalogic for damages resulting from defective geysers.
  2. 2 Whether the cession agreement between Venfin and Fibalogic transferred liability for Fibalogic's debts to Venfin.
  3. 3 Whether the indemnity furnished by Venfin to Fibalogic rendered it liable to KZN Resins under section 156 of the Insolvency Act.

Ratio Decidendi

The Supreme Court of Appeal found that Venfin failed to establish the existence of an oral compensation agreement with KZN Resins. The evidence and probabilities did not support Thirion's version, and the documentary record was inconclusive. The court held that the cession agreement between Venfin and Fibalogic did not transfer liability for Fibalogic's debts to Venfin, as such liability could only pass by way of delegation, which requires a tripartite agreement. The indemnity furnished by Venfin did not render it liable to KZN Resins under section 156 of the Insolvency Act, as that section applies only to indemnity insurance contracts, not to general indemnities. The appeal was upheld,...

Court Disposition

Appeal upheld; claim in convention and counterclaim both dismissed; costs awarded to appellant including costs of two counsel, with record costs restricted to 10 per cent; cross-appeal dismissed with costs.

Orders

  • The appeal is upheld. The order of the court a quo is set aside and replaced with: (a) The plaintiff's claim is dismissed with costs, including the costs of two counsel. (b) The defendant's counterclaim is dismissed with costs, including the costs of two counsel.
  • The respondent is ordered to pay the appellant's costs of appeal including the costs of two counsel, but the costs pertaining to the record is restricted to 10 per cent thereof.