TAKUVA J: Applicant issued
summons in this court claiming $11 001,88 from respondent. The latter
entered appearance to defend and the former applied for summary judgment.
The facts are that between 2010 and 2011,
Fleximail, a division of ART Corporation Ltd sold and delivered stationery on
credit to the respondent. Fleximail has an insurance policy with the
applicant under policy number DSCNB 11115. On 26of January 2012,
Fleximail ceded its right, title and interest in its claim (for any divided or other
payment which may accrue to it from respondent) to the applicant. The
cession of dividend was reduced to writing and signed by the insured (cedent)
and the insurer (cessionary) who is the applicant in this matter. The
document appears on p 9 of the record.
The applicant's claim against the
respondent is supported by several invoices referred to in its founding
affidavit. On 10 January 2012, the applicant demanded payment of the
outstanding amount and respondent failed or neglected to make payment.
The respondent acknowledged its indebtedness to the applicant in its letter
dated 25 January 2012. The letter appears on page 16 of the record.
It reads:
“REF: DSCNB 11112 – Fleximail OUTSANDING BALANCE
Your letter dated 10 January 2012 which we received on the 25th
January 2012 refers.
Our records are
showing $11 001,88 a different amount to the one shown on your letter. We
would appreciate if the documents can be reconciled so that we can provide you
with our payment plan.
Your urgent attention to the matter will be appreciated.
Yours faithfully
Question Maisera
GROUP FINANCE DIRECTOR
For and behalf (sic) of TEXTBOOK SALES duly authorized to act
hereto.”
Later, the same Group Finance Director addressed another letter to applicant's
legal practitioners on the same subject matter. The letter reads:
“The above
matter refers in which we acknowledge receipt of your correspondence dated 23
February 2012.
We kindly
request further particulars in the form of invoices and delivery notes for the
$10 000,00 claim against us as these will assist us to approach you shortly
with a settlement plan which we hope your client will be agreeable
to. We would like to avoid litigation at all costs hence it is
imperative that you furnish us with the particulars of claim as soon as
possible.
We anticipate a
good working relationship with your esteemed office in the amicable resolution
of this matter …” (my emphasis)
Despite this assurance, respondent did not endeavor to resolve the matter
amicably. It has strenuously opposed the application for summary
judgment. Respondent's grounds for opposing the matter are as follows:
(i)
the invoices are not conclusive proof of delivery of goods since they were
raised by the cedent. These invoices show a total of $11 297,77 yet the
amount
claimed in the
summons is US$11 0001,88.
(ii)
respondent has always disputed the extent of indebtedness and requested
delivery notes so that a reconciliation of its account can be done.
(iii)
the respondent has a good defence at law in that the applicant has not fully
indemnified the cedent's claim for US$10 000,00. Thus the applicant has no
right to sue until it has fully compensated the cedent. Further,
applicant is “not entitled at law to sue for more than it has reimbursed to the
cedent” that is US$8 000,00 since its claim is based on subrogation.”
(iv)
the document relied upon by applicant as a cession is not actually a
cession. Even assuming it to be one clause 8 thereof does not help
applicant.
Respondent relied on the following cases:
(a)
Chrismar (Pvt) Ltdv Stutchburg & Anor 1973 (1) RLR 277;
(b)
Halesv Doverick Investments (Pvt) Ltd 1998 (2) ZLR 235 (H);
and
(c)
Shingadiav Shingadia 1966 (1) RLR 285
On the other hand applicant's case is that
its application for summary judgment is substantiated by proof and its claim is
unimpeachable. Further, it was submitted that respondent's defence that
applicant has not fully indemnified the cedent is mala fide as it has
no bearing on applicant's claim against respondent. Therefore, the
respondent entered appearance to defend for the purposes of delaying
proceedings. The respondent's request that it be furnished with delivery
notes after being provided with copies of various invoices that relate to the
goods delivered and amount owed is a clear delaying tactic. Applicant
also relied on the Chrismar and Hales cases supra.
Applicant's application is one for summary judgment in terms of Rule 64 of the
High Court Rules, 1971. In such applications, the respondent must prove
that he has a bona fide defence. What amounts to a bona fide
defence was stated by DE VILLIER JP in Bentley Maudesley & Co (Pty) Ltd
v Carburol (Pty) Ltd, 1949 (4) SA 873 as “a bona fide defence
means a defence set up bona fide or honestly and which if proved will
constitute a defence to the plaintiff.”
In Rex v Rhodian Investments
Trust (Pvt) Ltd 1957 R & N 723 (SR), the yardstick was put as “a
prima facie defence” defined as, “good prima facie defence
means that the defendant must allege facts which if he can succeed in
establishing them at trial would entitle him to succeed in his defence.”
Further, the purpose of this special procedure was explained in Chrismar's case
supra in the following words;
“The special
procedure for summary judgment was conceived so that a mala fide
defence might summarily be denied except under onerous conditions, the benefit
of the fundamental principle on audi alteram partem (principle of
natural justice to hear both sides of the case) so extraordinary an invasion of
a basic tenet of natural justice will not lightly be resorted to, and it is
well established that it is only when all the proposed defences to the
plaintiff's claim are clearly unarguable both in fact and in law that this
drastic relief will be afforded to a plaintiff.”
The onus to satisfy the court that he has a good prima facie defence
is on the respondent – see Hale's case where it was held that, “where
a plaintiff applies for summary judgment against the defendant and the
defendant raises a defence, the onus is on the defendant to satisfy the court
that he has a good prima facie defence. He must allege facts
which if proved at the trial would entitle him to succeed in his defence at
trial … he must set out the basis for his defence with sufficient clarity and
in sufficient detail to allow the court to decide whether if these facts are
proved at the trial, this will constitute a valid defence to the plaintiff's
claim. It is not sufficient for the defendant to make vague
generalizations or to provide bald and sketchy facts.”
Applying these principles to the facts, it
must be noted that the cause of action arises from a cession of
dividends. “Two of the essentials of a valid cession are an intention to
make over to another what belongs to oneself in order that it may in future
belong to that other and not to oneself, and in addition delivery or some legal
formality equivalent thereto”. Per MAARSDORP CJ in Wilcocks N.O. v Visser
& Anor, 1910 O.P.D. 102. Cession is a way of transferring
incorporeal rights and it need not take a particular form.
In casu,
I totally agree with Ms Mafo's submission that respondent's defences
are “clearly unarguable, both in fact and in law.” Let me begin with the
facts. Respondent's challenge of the figure is mala fide,
belated and inconsistent with its express position stated in the two letters it
addressed to the applicant. The letter dated 25 January 2012 is an
acknowledgment of debt in the sum of $11 001,88. While it is accepted that the
respondent challenged applicant's figures, what is relevant is that the figure
of $11 001,88 was mentioned by the respondent as the amount its records showed
to be due and owing to the applicant.
Respondent's request for “delivery notes”
is surprising in that it came after applicant had furnished respondent with
invoices showing the dates the goods were delivered, the product codes, the
quantity, unit of issue, unit price, description and the total amount
owing. To supply delivery notes would be unnecessary in my view. In
any case if at all respondent was bona fide, its Group Finance
Director would have been more precise in his request. Any reasonable
finance manager would have listed those delivery notes he had, as part of his
records showing respondent's total indebtedness. Surely when goods were
delivered, respondent must have signed delivery notes and kept their own
copies. The onus is on the respondent to prove that it only received
certain goods and not others. This, it did not do except to make a bald
and generalized statement that the figures are incorrect and in dispute.
Respondent should have identified and serialized those particulars or specific
invoices they were disputing. It is not enough in my view to simply
dispute the global figure where the claim has been particularized by an
applicant. Respondent's legal argument is flawed in that it is anchored
on a misconception of law. Applicant's claim is not based on
“subrogation” as put by the respondent in its opposition. It is based on
cession of rights. There is a fundamental difference between the
two. Subrogation relates to a situation where an insurer makes payment
and then steps into the insured's shoes and brings any claim the insured may
have against any other party arising out of the loss. The insurer does
not bring the claim in its own name but is absolutely entitled to conduct any
consequent legal proceedings in the name of the insured – see R. H. Christie,
Business Law in Zimbabwe 1st Ed, Juta & Co. 1985 at p 246 –
7.
On the other hand in a cession, the
cessionary's action is in rem suam in that the vinculum juris
is the cession itself. In casu, there is a valid “cession of
dividend” as shown by the memorandum of an agreement to that effect on page 7
of the record. Respondent in my view erroneously terms this agreement a pastum
de non cedendo. Its argument is that this is so because clause 8 of
the same agreement states; “it is hereby recorded that this cession does not
constitute a cession to Credsure of the insured's claim against the debtor, but
only relates to any dividend or other amount which the insured receive
from the debtor arising from such a claim.” This clause shows that
the cession can be one of a claim or dividend or other amount. The
cession in casu clearly states that it is of “DIVIDEND”.
Consequently, this clause does not enhance respondent's argument at all.
In a cession, the debtor's consent is not
required. Therefore, it is of no consequence to the respondent's debt
that the applicant has not fully indemnified the cedent. This issue has
no legal bearing to the applicant's claim against the respondent.
For these reasons, I find that the
applicant has satisfied the requirements set out in r 64 (2) of the High Court
Rules 1971 in that it has set out facts verifying the cause of action and the
amount claimed. I find also that the respondent has no bona fide defence
to the action in that respondent has no triable or arguable defences in fact
and/or in law.
Accordingly, it is ordered that:
1. The
application for summary judgment be and is hereby granted.
2. The
respondent be and is hereby ordered to pay to the applicant the sum of US$11
001,88.
3. The
respondent is ordered to pay interest on the above amount at the prescribed
rate calculated from the 23rd February 2012.
4. The
respondent to pay costs of suit.
Scalen & Holderness,applicant's legal practitioners
Muvingi
& Mugadza, respondent's legal practitioners
