Brian Garth Batteson N O and Others v Deborah Joubert N O and Another

The applicants were trustees of the Batfarm Trust. The late Jan Hendrik Abraham Bezuidenhout, sole member of Geheeltevrede Boerdery CC, sold farmland to the trust, which in turn leased it back to the CC. As part of the lease arrangements, Bezuidenhout agreed to cede a Sanlam life insurance policy to the trust. The lease clauses described the cession as an ‘absolute cession’ to safeguard rental payments and mortgage liabilities, with a provision that the policy would be re‑ceded if the CC exercised an option to repurchase the property. A Sanlam cession form later reflected the cession as ‘out‑and‑out’. After Bezuidenhout’s death, Sanlam paid the policy proceeds to the trust. The CC was liquidated, and its joint liquidators, as cessionaries of the deceased estate’s claim, contended that the policy had been ceded merely as security (in securitatem debiti) and that any surplus beyond the secured indebtedness had to be repaid. The trial court held the cession to be an outright cession; on appeal, the full court held it to be a cession in securitatem debiti. The trustees sought special leave to appeal to the Supreme Court of Appeal.

The application for special leave to appeal was refused with costs.

The case reaffirms South African principles on the interpretation of cessions, particularly that substance prevails over form and that even a cession described as ‘absolute’ may constitute a cession in securitatem debiti if its purpose is to secure a debt. It also underscores the stringent requirements for obtaining special leave to appeal from a full court to the Supreme Court of Appeal.