The case concerns a summary judgment application against the third defendant. The first defendant (a company) concluded a master rental agreement with Corprint CC during April-May 2021 to rent equipment for 60 months at R15,634.25 per month with 15% annual escalation. The second and third defendants bound themselves as guarantors and co-principal debtors. The rental agreement and associated rights were ceded through a chain: Corprint CC to Sunlyn (Pty) Ltd, then to Sasfin Bank Ltd, and finally to the first plaintiff (South African Securitisation Programme (RF) Ltd). The company breached the agreement by failing to pay monthly instalments, falling into arrears of R135,089.77 as at 9 May 2022. The plaintiffs claimed a total of R1,192,979.93. Before the summary judgment could proceed, the first defendant was placed under business rescue and the second defendant was provisionally sequestrated, leaving only the third defendant to face the summary judgment application.
1. Proceedings against the first defendant postponed sine die pending the outcome of business rescue proceedings. 2. Proceedings against the second defendant postponed sine die pending the outcome of sequestration proceedings. 3. Summary judgment granted against the third defendant for payment of R1,192,979.93 plus interest and costs on an attorney and client scale. 4. The costs occasioned by the postponement of 15 February 2024 are to be borne by the second defendant and/or his estate.
A third party (debtor) to a cession agreement does not have locus standi to challenge the validity of the cession and related agreements between the cedent and cessionary unless prejudice is shown, and bare denials in a plea do not raise triable issues for purposes of resisting summary judgment. When locus standi is challenged, the court must approach the question on the assumption that all allegations of fact relied upon by the party whose locus standi is attacked are true.
The court observed that the postponement of 15 February 2024 could have been avoided had the court and the plaintiffs' legal representatives been apprised of the second defendant's provisional sequestration. No explanation was forthcoming for the failure to communicate the changed status. The court also noted that the fact that proceedings are postponed sine die does not curtail the granting of a costs order.
The judgment confirms the principle in South African law that debtors who are not parties to cession agreements generally lack standing to challenge the validity of those agreements, particularly where no prejudice is alleged. It also reinforces that a provisional sequestration order triggers section 20(1)(b) of the Insolvency Act to stay civil proceedings, and that certificates of balance signed by managers of cessionaries are valid where the underlying agreement permits this. The case applies the SCA's guidance in NPGS Protection and Security Services CC v Firstrand Bank Ltd that bald averments and sketchy propositions are insufficient to resist summary judgment.