IN THE HIGH COURT OF SOUTH AFRICA 

In the matter between: 
MARCOM INTERNATIONAL 

and

JUDGMENT

BACKGROUND

3. The applicant is a company duly incorporated and registered in South Africa and is also a member of the Marmoram Group of companies. Two members of the Marmoram Group, namely Marmoram South Africa and Marmoram Dubai, ceded their claims against the respondent to the applicant, in order to enable the applicant to institute a counter claim against the respondent. On 4 March 2008 the applicant delivered a counter claim against the respondent based on the ceded claims.

4. The applicant claimed that agreements of cession were concluded as follows, (I quote from applicant's replying affidavit):

  

Similarly, an oral, alternatively tacit, cession agreement was concluded between the Applicant and Marmoram South Africa to cede its claims against the Respondent to the Applicant. Both the Applicant and Marmoram South Africa were represented by Mike Charles who was in Cape Town at the time. Any funds received by the Applicant from the Respondent in terms of the cession, will be used to off-set amounts owed by Marmoram South Africa to the Applicant."

"Our   instructions   are   not   to   comprehensively respond to the aforesaid, but to advise that our client is and was on date of filing of your counterclaim, not residing either permanently or temporarily in South Africa, nor is our client further domicile within South Africa."

7. On 8 July 2008, this court granted an order (the attachment order referred to above) in terms whereof it ordered (I quote only the section relevant to this application):

"...That the respondent's claim against the Applicant for payment of the amount of R50 000 (Fifty  Thousand Rand)  which  forms  the subject matter of an action instituted by the Respondent against the Applicant in the Magistrate's Court for the district of Cape Town under Case Number 25143/07 is attached to found or confirm the jurisdiction   of  the   above   Honourable   Court   in proceedings   to   be   instituted  by   the   Applicant against the Respondent for the payment of the sums..."

ISSUES FOR DETERMINATION

8.     The issues for determination in this application are:

a)	Did the applicant conclude valid cession agreements with Marmoram Dubai and Marmoram South Africa?
b)	Should this Court confirm the attachment?

THE CESSION AGREEMENTS 
Evidence of the Cession

10. In general, there are no formal requirements for a cession to be validly concluded. The applicant had to prove the agreement of cession. The applicant alleged that, when it delivered its counterclaim on 4 March 2008, cession   had  taken   place.     The   respondent  did   not seriously challenge the circumstances under which the applicant alleged that this cession took place. I am satisfied on the papers before me that the applicant did prove that it had entered into agreements of cession with
Marmoram Dubai and Marmoram South Africa, as set out above.

The Hippo Quarries & Skjelbreds Rederi Decisions

	

14. Rabie, JA said the following about cession at 733 G to H:

"The first point to bear in mind about the agreement of cession, is the circumstances in which it was entered into. ft is common cause between the parties that Freedom Tramping, being a peregrinus, cannot enforce its claim against Skjelbreds, also a peregrinus,  in a  South African  Court,   and that Freedom   Tramping   itself  cannot   apply   for   an additional order to found the necessary jurisdiction. It is admitted by the Respondent, furthermore, that it   was   in   order  to   overcome   this  jurisdiction difficulty that Freedom Tramping ceded its claim to the Respondent."

"In light of all the aforegoing, I am of the view that the written agreement of cession is not a true reflection of the real agreement between the parties thereto; that there was no real intention to enter into an agreement of cession; that what is stated by the parties to have been a cession was not in form only, designed to enable the Respondent, an incola of the court's area of jurisdiction, to institute proceedings in its name against Skjelbreds; and that the true agreement between the parties is one in terms of which the Respondent would act as Freedom    Tramping's    mandatory    in    enforcing Freedom   Tramping's   claim   against   Skjelbreds. Holding this view of the relationship between the
parties,   I   consider   it   to   be   clear   that   the Respondent cannot claim an attachment order in order to found jurisdiction when the mandatory, on whose behalf it is acting, cannot do so."

"A cession, otherwise valid, is in my view not assailable on the sole ground that the cessionary was to collect a debt for the ultimate benefit of the cedent."

 

In Skjelbreds' case, one peregrinus (the creditor) ceded its claim against another peregrinus (debtor) to an incola. This was to enable the incola to do what the peregrinus creditor was in law incapable of doing, namely to attach an asset of the peregrinus debtor ad fundandam jurisdictionem. As in the present case it was agreed, though not disclosed in the document of cession, that the cessionary would account to the cedent for anything it managed to recover from the debtor. This Court held that this transaction was not a genuine cession because the parties in truth intended the incola to be the mandatory or nominee (and hence not a cessionary) of the peregrinus creditor to enforce the claim against the peregrinus debtor on the formers behalf.  The attachment was accordingly set aside.

There are similarities between Skjelbreds' case and the current one. There, too, the cession was intended to serve a secondary purpose for the ultimate benefit of the cedent;    no consideration

was given for it;   and the cessionary was under a duty to account to the cedent for any proceeds recovered as a result thereof.

But there are significant differences. Perhaps the most glaring one is this: in that case the ostensible cession was devised to circumvent a legal impediment or disability - a peregrin us is disqualified in law from attaching the property of another peregrinus ad fundandam jurisdictionem.

In the present case there was no legal disability. This cession was devised to capture Hippo's debtor in the net of plaintiff's suretyship. In Skjelbreds case the cession was designed to achieve what, as a matter of law, the cedent was unable to attain, i.e. the attachment; here the cession was designed to achieve what, as a matter of fact, the cedent was incapable of doing, i.e. resorting to someone else's suretyship."

Genuine intention to cede and valid cession

19. In this matter, Marmoram Dubai and Marmoram South African intended, with the cession of their claims, to enable the applicant to institute a counterclaim against the respondent in the magistrate's court proceedings referred to above.

"The Court will investigate the true nature of an allegedly simulated cession that is carried out in an attempt to outmanoeuvre a defendant, but if the intention to cede is genuine and the motive or purpose is not unlawful, immoral or against public policy the cession will be valid."

ATTACHMENT TO FOUND OR CONFIRM JURISDICTION

"(i) Where an incola wishes to sue a peregrinus and no other ground to exercise jurisdiction (ratio jurisdictionis) exist, an attachment is necessary to found jurisdiction. An incola may apply for attachment ad fundandam jurisdictionem even if he sues a cessionary from a peregrinus. The agreement between the parties must, however, be a genuine cession reflecting the real intention of the parties and not a mere agreement between principal and agent.
(ii) Where an incola wishes to sue a peregrinus and another ground to exercise jurisdiction (ratio jurisdictionem exist), an attachment is still necessary to confirm and strengthen the jurisdiction already possessed by the court."

[25] I therefore find that the applicant is entitled to confirmation of the attachment order. I make the following order:

(a) The application for the setting aside of the attachment order, granted on 8 July 2008, is dismissed.
(b) The attachment order is confirmed.
(c) Defendants are ordered to pay the cost of the application.