The Cession of a right to a third party

Our law recognizes the ability to be able to cede, transfer and assign a right that one may have against another to a third party for whatever reason. The effect of a cession in securitatem debiti came under scrutiny in the case of Picardi Hotels Ltd v Thekwini Properties (Pty) Ltd 2009 (1) SA 493 (SCA).

In the abovementioned matter the parties had entered into a contract of lease.
The respondent had let its immovable property to the appellant who had subsequently fallen behind on its rental payments to the respondent. When the respondent attempted to recover this arrear rental a special plea was raised that in effect the respondent lacked locus standi to sue the appellant as the former had at some stage ceded, transferred or assigned its right of recovery to the bank in terms of a mortgage bond. The Supreme Court of Appeal agreed with the argument put forth by the appellant.

Boruchowitz AJA held that it was settled law that, unless otherwise agreed, a cession in securitatem debiti resulted in the cedent being deprived of the right to recover the ceded claim, retaining only the bare dominium or a reversionary interest. The phrase ‘cedes, transfers and assigns’ as used in the deed of cession is sufficient to constitute an effective transfer of rights. In other words the respondent could not sue the appellant for unpaid rental unless there was a re-cession of the ceded right of recovery from the bank.

Variation of a court order

In the case of Brown and Others v Yebba CC t/a Remax Tricolor 2009 (1) SA 519 (D) an order of court had been made in the matter in terms of an arrangement between the parties regarding a specified amount which was to be paid to the applicants. The applicants had later sought to have the court order varied so that they could be paid a different specified amount.

Levinsohn DJP stated the general principle that the court was functus officio in that as soon as soon as it had pronounced a final judgment or order it would have no authority to correct, alter or supplement it. There are however certain exceptions to this general rule one of which being that this prohibition did not apply to inter-locutory orders (one which does not have the effect of a final decree); and that such an order could at any time before final judgment be varied. In this specific matter variation was permissible as the prior order by the court was only inter-locutory.