CIV/APN/138/81 IN THE HIGH COURT OF LESOTHO
In the Application of :
PIONEER MOTORS(PTY)LTD Applicant v
ALBERT SEBEKA MOKAKE ) W.J. LEMENA Respondents
JUDGMENT
Delivered by the hen. Chief Justice, Mr. Justice T.S. Cotran on 27th October,1981
This is an application by Pioneer Motors(Pty)Ltd (applicant) to set aside a writ of attachment and execution issued out of the office of the Registrar of the High Court on the 25th August 1981 at the instance of A.S. Mokake(first respondent) the Judgment creditor in the sum of M10,000 with interest and costs awarded to him as damages against the applicant in Civil Trial 213 of 1980 as per a Judgment filed on 20th March 1981 since (on the 24th August 1981) confirmed on appeal in C. of A. (CIV) No. 2 of 1981. W.J. Lemena(second respondent) is the Deputy Sheriff. He had attached two vehicles belonging to applicant which were about to be sold in execution.
The applicant avers in his founding affidavit that a debt of M8592.67 together with interest at 11% from 1st January 1980 was owed by the 1st respondent to Reemus Distributors(Pty) Ltd of Zastron (Reemus) which debt was ceded to it. The applicant, as cessionary, claims a "set off" of this amount against their Judgment debt.
The application was resisted in general terms by 1st respondent on the grounds that the alleged cession was invalid by reason of the facts that it was framed solely to forestall or preempt the collection of damages awarded to him, that the amount allegedly owed by him to the cedant Reemus is disputed and not liquidated, that in any event Reemus took away his property in satisfaction of the alleged debt, that Reemus
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"cannot have it both ways", that applicant had "ample opportunity to counterclaim" at the time of the action, and that the cession was subsequent to the Court's judgment.
The applicant, in a replying affidavit, reiterated that they were entitled to a "set off" and produced six cheques, (photocopies are marked annexures A-F) drawn by the 1st respondent on Lesotho Bank(one made out to Reemus and five to cash but given to and originally held by the cedant Reemus) between the 10th November 1979 and 10th January 1980; one cheque is endorsed by the bank "payment stopped", four are endorsed by the bank"refer to drawer", and one apparently not presented for payment.
The applicant's arguments were put forward by Mr.Olivier. He submitted that though 1st respondents claim against the applicant in the High Court action was for "unliquidated" damages, the judgment dated 20th March 1981 has converted the claim to a "liquid" or "liquidated" amount and the applicant, as cessionary, is entitled to set off, even against a judgment debt, a liquid amount owed to the cedant and thus extinguish the judgment debt in whole or in part. He quoted re Trans-Africa Insurance Co. (in liquidation) 1958(4) S.A. 324 W at 325 H and at 326 A; Symon v. Brecker 1904 T.S. 745 at 747; Postmaster General v. Taute 1905 T.S. 580, at 590; The Government v. Regna Adwel Business Machines 1970(2) S.A. 428 T; Rainsford v. African Banking Corporation 1912 CPD 1106 at 1115; Mostert v. McMillan 1912 EDL 351; Mahomed v. Ebraheim 1911 CPD 29; Mosanthal Bros v. Coghlan & Coghlan 1888 Griqualand West High Court 27. Mr. Olivier also quoted from the writings and comments of jurists, both ancient and modern, of which only Voet (Gane's Translation) is available in my library. (See Vol. III Voet Commentary on the Pandects page 150).
The 1st respondent's arguments were put forward by Mr. Masoabi. The 2nd respondent made no appearance and I take it he will abide by the Court's judgment. Mr. Masoabi submitted inter alia, that in the circumstances of this case notice of the cession should have been given to let respondent for the law will not compel the debtor to pay twice (Wille & Mullins, Mercantile Law of South Africa 16th Edition p. 62 last paragraph) that the debt owed by the 1st respondent to the cedant has been satisfied in full or in part when the cedant took possession (unlawfully) of the debtor's property, that at the time of cession the
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cannot operate whore the amount allegedly owed by the 1st respondent is disputed and not capable of speedy and easy proof (wholan v. Oosthuizen 1937 TPD 304) - and that the cessionary can have no better right than the cedant had against the debtor, for the cessionary takes "subject to equities", any defence affecting the validity of the contract which a debtor may have had against the original creditor entitled him to raise also against the cessionary (Van Zyl v. Credit Corporation of South Africa Ltd. ' 1960(4) S.A. 582 A.D. at 589).
The deed of cession by Reemus to the applicant was effected on the 30th July 1981 and it reads as follows :
" REMUS DISTRIBUTORS (PTY) LTD
who have a claim against:
A.S. MOKAKE
in the sum of R 8,592,67
plus interest thereon at the rate of 11% per annum
from 10/1/1980
to date of payment
do hereby cede, make over and assign, our said claim to and in favour of:
PIONEER MOTORS(PTY)LTD
for value received., without recourse to REMUS DISTRIBUTORS and in settlement of any claim Pioneer Motors may have of whatsoever nature against REMUS DISTRIBUTORS in connection with the said A.S. MOKAKE.
DATED at ZASTRON this 30th day of July 1981. AS WITNESSES:
(sgd)
(sgd) (sgd) "
It is common cause that this cession took place more than four months after the judgment of the High Court awarding the 1st respondent compensation against the applicant and about a month after the appeal of the applicant against the decision was argued before the Court of Appeal. It should be noted that at the time of the purported cession the cedant Reemus did not deliver the cheques to the cessionary. The deed of cession does not mention the existence of negotiable instruments. The cheques were with the "police" and they were procured after the application was lodged and the opposing affidavit filed presumably to shew that 1st respondent could not now be heard to say, as he did at the trial of the main action, that the debt was disputed
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or "disputable" needing an intricate and protracted inquiry and hence incapable of speedy adjudication or that it was illiquid. however, it is clear, indeed admitted in course of argument, that these cheques constituted the same debt Reemus had contracted to waive if 1st respondent gives it his truck, which by means more foul than fair, Reemus managed to secure through the negligence (whether arising out of delict or contract matters not) of applicant who became privy to cedant Reemus despoliation. The actual effect of the manoeuvre by which the truck was secured was to extinguish for all practical purposes any right cedant Reemus may have had to the debt owed or to the cheques given in settlement of the debt. Consequently unless restitution ante omnia is effected the cedant has no rights to cede. The cessionary was aware at the time when the deed of cession was drawn of the dubious methods employed by the cedant and can have no better title to the ceded debt.
The flaw in Mr. Olivier's argument is that he enumerates half the principles of law applicable to cession and set off (none of the cases cited bear the remotest resemblance to the facts before me) but omits the equally important other half foremost amongst these being that there is no set off when a person wrongly seizes possession, whether by robbery theft or otherwise, of what belongs to another since the one who has been despoiled is to be reinstated above all things (Voet; Code IV 31.14.2, and Zangerus, Exceptions, Part 3 Chap 8 n.119 - See Gane's Translation(1956) of Voet Commentary on the Pandects Vol.III p.166, and also Weasel's Law of Contract in South Africa 2nd Ed. 1951 Vol. II para 2567 at p. 698). Furthermore it is a requisite of compensation that the debts must be both due at the moment the compensation is alleged to operate (Wessel's,supra, para 2513 p. 688 and para 2558 p.697) and whore an "event occurs which liberates the debtor the law regards the compensation as never having taken place" (Wessel's, supra, para 2562 and authorities cited).
Mr. Olivier did not argue that applicant was a holder in due course of negotiable instruments to which different rules may apply. I did state that the deed mentions no cession of cheques simply of a debt. Perusal of the cheques shews no endorsement by the cedant to the cessionary, so I do not think that applicant is a holder in due course, but assuming the contrary, the applicant's position does not alter unless it had acquired the notes for value, and in good faith, and without
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knowledge of the facts. The applicant in the case before me, as I said earlier, was fully aware of facts which would have precluded the cedant Reemus from recovering. (Walker v. Syfret NO 1911 A.D. 141 at 159 and Wessel's, supra, para 2569).
In my opinion this application is utterly misconceived and must be dismissed.
The 1st respondent asked for costs on attorney and client basis on the grounds that the cession was a sham and the application was embarked upon for the purpose of frastrating him from enjoying the fruits of his judgment and cause him further unnecessary expense. I consider that the circumstances that gave rise to the action and the conduct of the losing party both in the main action and on the appeal to be such that 1st respondent should now be fully compensated without having to dig further into his own pocket. I order that costs of this application to be borne as prayed.
Finally I should mention that I am ashamed of some of my professional kith and kin. In over thirty years on the bench and at the bar I cannot recollect a case whore, on the face of the papers, a client has been so consistently ill advised. Firstly the applicant could have, I think, vindicated against Reemus in early August 1980 when their Mr. Molapo discovered his faux pas, secondly it could have applied to join Reemus as co-defendant in the main action after the summons was issued, which application would have been most probably granted, and thirdly it could have, certainly after the High Court Judgment, sued Reemus directly. All these opportunities have been missed. The last act of persuading the unfortunate applicant to exchange a good cause of action with reasonable prospects of success for scraps of worthless papers can only be described as tragic and incredible. I do not seem to have the powers, under the High Court Rules, to order the costs to be paid personally by the legal practitioners who handled the case on behalf of the applicant. There was such a rule in the Civil Procedure Codes of East Africa. It is a pity we do not have the same here.
CHIEF JUSTICE 27th October,1981
For Applicant: Mr. Olivier For Respondent: Mr. Masoabi
