Van Zyl v Credit Corporation of South Africa Limited 1960 (4) SA 582 (A)

Van Zyl v Credit Corporation of South Africa Limited 1960 (4) SA 582 (A)

Issue: Whether a cession of a liquidated claim is valid if the cedent (the person who transfers the claim) is not the original creditor (the person to whom the claim is owed).

Facts:

In 1957, Credit Corporation of South Africa Limited (Credit Corporation) entered into a loan agreement with United African Pharmaceuticals (Pty) Ltd (UAP). UAP defaulted on the loan, and Credit Corporation obtained a judgment against UAP for the amount of the debt.

In 1958, Credit Corporation ceded (transferred) the judgment against UAP to Van Zyl. Van Zyl then sued UAP to enforce the judgment.

UAP objected to the cession, arguing that it was invalid because Credit Corporation was not the original creditor. UAP claimed that the cession was a disguised novation (a new agreement that replaces an existing agreement) and that it was therefore invalid because it had not been consented to by UAP.

Held:

The Court held that the cession was valid. The Court reasoned that a cession of a liquidated claim is valid even if the cedent is not the original creditor.

The court also found that the cession was not a disguised novation because Credit Corporation had not agreed to release UAP from its obligations under the loan agreement.

Key Facts:

• A company obtained a judgment against another company for the amount of a debt.
• The company then transferred the judgment to a third party.
• The company that was originally owed the debt objected to the transfer, arguing that it was invalid because the company that transferred the judgment was not the original creditor.

Reasons:

• The Court held that the transfer was valid because a cession of a liquidated claim is valid even if the cedent is not the original creditor.
• The court also found that the transfer was not a disguised novation because the company that transferred the judgment had not agreed to release the company that was originally owed the debt from its obligations under the loan agreement.

Conclusion:

The Court's decision in Van Zyl v Credit Corporation of South Africa Limited 1960 (4) SA 582 (A) is a significant case in South African law. The Court's decision clarified the law relating to the validity of cessions of liquidated claims.