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[2016] ZASCA 32
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Feedpro Animal Nutrition (Pty) Ltd v Nienaber NO and Another (20866/2014) [2016] ZASCA 32 (23 March 2016)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 20866/2014
In
the matter between:
FEEDPRO
ANIMAL NUTRITION (PTY) LTD
APPELLANT
and
READA
ANNA NIENABER NO
FIRST RESPONDENT
MARITA
ELIZABETH NIENABER NO SECOND
RESPONDENT
Neutral
citation:
Feedpro
Animal Nutrition v Nienaber NO
(20866/2014)
[2016] ZASCA 32
(23 March 2016).
Bench:
Lewis, Petse,
Willis, Saldulker JJA and Kathree-Setiloane AJA
Heard:
19 February 2016
Delivered:
23 March 2016
Summary:
Prescription –
Dismissal of special plea: the trial court erred in separating
the special plea from the remaining issues
in the trial where the
agreed facts in the stated case were inadequate: need for evidence to
be led: matter remitted to the trial
court for determination of the
special plea together with the remaining issues in light of evidence
to be led.
ORDER
On
appeal from
: Free
State Division of the High Court, Bloemfontein (Naidoo J sitting as
court of first instance):
(1)
The appeal is dismissed
with costs save that the order is substituted in the following terms:
‘
(a)
The order of the trial court dismissing the appellant’s special
plea of
prescription
is set aside.
(b)
The matter is remitted to the Free State Division of the High Court
for determination of the special plea of prescription together
with
the remaining issues in light of evidence to be led’.
JUDGMENT
Kathree
- Setiloane AJA (Lewis, Petse, Willis, Saldulker JJA concurring):
[1]
In November 2012,
Feedpro Animal Nutrition (Pty) Ltd (Feedpro) instituted action in the
Free State Division of the High Court against
the trustees of the
Nienaber Trust (the Trust) for payment of the purchase price of
R502 895 for fertilizer products which
it provided to the Trust.
The Trust instituted a counterclaim in the amount of R1 086 650 for
damages sustained as a result of
the late delivery of the fertilizer
products.
[2]
Feedpro raised a special plea of prescription, which by order of the
trial court, in terms of rule 33(4) of the Uniform Rules
of Court,
was adjudicated upon separately from the remaining issues in the
trial. The parties agreed, in terms of rule 33(1) of
the Uniform
rules, that the special plea would be adjudicated upon with reference
to a written statement of agreed facts in the
form of a stated case.
[3]
The stated case records that the special plea of prescription should
be adjudicated with reference to the pleadings (including
the request
for further particulars and further particulars) and the agreed
facts. The agreed facts for purposes of the special
plea of
prescription are, inter alia, these:
(a)
The Trust ordered
fertiliser products from Feedpro on 1 December 2009.
In
terms of the oral agreement between the parties, the fertiliser
products ordered on 1 December 2009 had to be delivered by no
later
than 22 December 2009. They were, however, only delivered on 5
January 2010. This constituted a breach of the agreement by
Feedpro.
(b)
The Trust sent a
letter, dated 22 January 2010, to Feedpro recording that as a
result
of the late delivery of the fertiliser products it had suffered
damages, and that because the damages could not be accurately
determined, at that stage, it proposed that the parties agree that
the damages be calculated during the harvest of the crop. The
concluding paragraph of this letter reads:
‘
Die
skade kan nie nou akkuraat bepaal word nie, ek sal verkies dat daar
nou ‘n ooreenkoms aangegaan word dat die skade tydens
strooptyd
bepaal word.’
When
the parties failed to reach the proposed agreement, the Trust’s
attorney sent a letter, dated 11 February 2010, to Feedpro
recording
that the Trust had suffered damages but, at that stage, the damages
could not be ascertained with any certainty. This
letter reads:
‘
U
het egter kontrakbreuk gepleeg en eers op 5 Januarie 2010 afgelewer.
Weens die laat ontvangs van die blyk dit dat ons kliënt
ʼn
misoes het. Ons kliënt het dus skade gely, welke skade nie op
hierdie stadium met sekerheid bepaal kan word nie.
Ons
stel u ook hiermee in kennis dat sou u dagvaarding hierin uitreik dit
ons instruksie is om ‘n teineis in te stel.’
(c)
On 26 February 2010,
the Trust requested Herman Smith, an assessor, to conduct an
assessment of the loss sustained by the Trust
as a result of the crop
failure. The assessment report of Smith was made available to the
Trust after February 2010. The exact
extent of the damages suffered
by the Trust due to the crop failure only became known to it after
this date. The Trust’s
counterclaim for damages was served on
Feedpro on 27 February 2013.
[4]
The parties’ respective contentions are recorded in the
statement of case. Feedpro contended that prescription of the
Trust’s
counterclaim commenced to run by no later than 26 February 2010 (thus
before 26 February 2010), with the result that
the Trust’s
counterclaim had become prescribed. The Trust, in turn, contended
that the prescription of its counterclaim did
not commence to run
before 26 February 2010 (thus after 26 February 2010), with the
result that its counterclaim has not become
prescribed. The trial
court (per Naidoo J) found in favour of the Trust, and dismissed
Feedpro’s special plea on the basis
that the Trust only became
aware that it suffered damages in March 2010. Feedpro appeals
with leave of the court below.
[5]
The primary issue in this appeal is whether the Trust became aware
before 26 February 2010 that it had suffered damages as a
result of
Feedpro’s breach of contract. In terms of
s 12(3)
of the
Prescription Act 68 of 1969
a debt shall not be deemed to be due
until the creditor has knowledge of the identity of the debtor and of
the facts from which
the debt arises. However, in terms of the
proviso to
s 12(3)
, a creditor shall be deemed to have such knowledge
if he could have acquired it by exercising reasonable care.
[1]
It is well established that the defendant bears the onus of proving
when the plaintiff acquired or should be deemed to have acquired
the
knowledge to institute a counterclaim against it.
[2]
[6]
Feedpro’s contention, that the Trust had become aware of the
loss suffered prior to 26 February 2010 is premised upon
the contents
of the two letters, dated 22 January 2010 and 11 February 2010,
respectively which, it submits, explicitly establish
that the Trust
had sustained damages as a result of Feedpro’s breach of
contract prior to 26 February 2010. In support of
this contention,
Feedpro argues that the Trust would not have advised it that it had
sustained damages as a result of the delay
in the delivery of the
fertiliser products, and threatened it with a counterclaim, if the
loss sustained was totally unconnected
to its breach of contract. In
addition, Feedpro contends that the Trust’s appointment of an
assessor, on 26 February 2010,
to conduct an assessment of its loss,
also confirms that the Trust became aware, before this date, of the
loss sustained as a result
of Feedpro’s breach of contract.
Feedpro, therefore, submits that on the agreed facts there was
sufficient evidence before
the trial court to find that damages would
on a balance of probabilities eventuate, and that it was only the
extent of the damages
sustained by the Trust that was uncertain prior
to 26 February 2010.
[7]
I disagree. It is evident from the agreed facts that there is indeed
insufficient evidence to determine when the Trust became
aware that
it had sustained a loss as a result of the late delivery of the
fertiliser products by Feedpro. The contents of the
two letters
relied upon by Feedpro are, to my mind, ambivalent in relation to
when the Trust became aware that it had sustained
damages as a result
of crop failure. The concluding paragraph of the first letter –
which is all that this court is privy
to − merely states that
damages cannot, at this stage, be accurately calculated and proposes
that the parties reach an agreement
that the damages would only be
calculated during harvest of the crop.
[8]
By contrast, the second letter appears to suggest that, due to the
late delivery of the fertiliser products, the Trust has suffered
a
crop failure and hence damages but that damages could not, at that
stage, be calculated with any certainty. When viewed together,
the
contents of the two letters are not harmonious. While the latter
seems to suggest crop failure, the former does not. Moreover,
if the
crops had actually failed, there is simply no indication from the
agreed facts when this occurred. It is also not clear
from the
letters when crop failure is discernible – is it before or
after harvest of the crop? Crucially, the date of harvest
is starkly
absent from the agreed facts.
[9]
When the inadequacy of the agreed facts, as recorded in the stated
case, was put to counsel for Feedpro during argument of the
appeal,
he submitted that any such inadequacy may be balanced by drawing the
necessary inferences from the agreed facts. While
a court may in a
stated case, in terms of
rule 33(3)
of the Uniform rules, draw any
inference of fact from the agreed facts as if proved at trial, the
Rule presupposes that the agreed
facts are adequately stated for
determination of the issues in question. Where, as in this case, the
agreed facts are discordant,
ambivalent, and inadequately stated for
purposes of deciding whether the Trust’s counterclaim has
prescribed, the process
of inferential reasoning has no place.
[10]
That said, what Feedpro seeks is for the court to embark upon a
process of assuming certain core facts which are absent from
the
agreed facts. This, in my view, will do violence to the purpose of a
stated case as contemplated in
rules 33(1)
and (2) of the Uniform
rules, which is that the resolution of a stated case proceeds on the
basis of agreed facts, without the
necessity of leading evidence. It
is clear, therefore, that a stated case must be decided upon the
agreed facts and any inferences
of fact that may be drawn from them.
In other words, it would be impermissible for a court, which is
adjudicating a dispute on
a statement of agreed facts, to have regard
to, or assume facts, which fall outside the scope and ambit of the
agreed facts –
in order to compensate for inadequately stated
agreed facts vis - á - vis the question for determination. In
Minister
of Police v Mboweni & Another,
[3]
this court cautioned against deciding a stated case on inadequate
facts. Wallis JA stated:
‘
It
is clear therefore that a special case must set out agreed facts, not
assumptions. The point was re-emphasised in
Bane
& Others v D’ Ambrosi,
[4]
where it was said that deciding such a case on assumptions as to the
facts defeats the purpose of the rule, which is to enable
a case to
be determined without the necessity of hearing all, or at least a
major part, of the evidence. A judge faced with a request
to
determine a special case where the facts are inadequately stated
should decline the request. The proceedings in
Bane
v D’ Ambrosi
were
only saved because the parties agreed that in any event the evidence
that was excluded by the judge’s ruling should be
led, with the
result that the record was complete and this court could then rectify
the consequences of the error in deciding the
special case.’
[11]
The agreed facts in the current appeal are inadequately stated for
purposes of determining if the Trust had the requisite knowledge
contemplated in
s 12(3)
of the Act for prescription of its
counterclaim to commence running. Crucially, the agreed facts do not
indicate when the Trust
became aware of whether any loss was
sustained as a result of Feedpro’s breach of contract. As
the Trust argued, it
could not have instituted a claim against
Feedpro until it had knowledge of whether it had sustained any
damage. If regard is had
to the agreed facts, as well as the
pleadings, including the request for further particulars and the
further particulars, it is
unclear whether, by 26 February 2010,
(when the Trust had instructed Smith to assess the damages suffered),
it was aware that it
had sustained loss at all. Significantly,
in its request for further particulars, Feedpro pertinently requested
the Trust
to state when and how it first became aware of the crop
failure. The Trust’s reply to the former request
is:
‘Nadat met die stroop van die mielie[s] begin is…’
and its reply to the latter is: ‘Daar is reeds gedurende
die
groeitydperk opgemerk die plante het ‘n stikstof tekort, maar
die misoes is bevestig met die stroop van die mielies.’
The
further particulars of the Trust reveal that the Trust could only
have become aware of the loss sustained once harvest of the
crop had
been completed. However, neither this fact, nor the date of harvest
is apparent from the stated case. It is simply impossible,
in my
view, for the court to determine the date when prescription commenced
to run in respect of the Trust’s counterclaim,
without hearing
evidence on, amongst other things, when the crop was harvested and
thus when it was established that loss had been
suffered.
[12]
Feedpro’s reliance on the contents of the two letters, which
form part of the agreed facts, is misplaced. Although the
Trust may
well have been of the view, at the time, that Feedpro’s breach
would result in it suffering damages, this was not
sufficient to
constitute knowledge for purposes of
s 12(3)
of the Act. As to the
nature of knowledge that a creditor should have in order for
prescription to commence running for purposes
of
s 12(3)
of the Act,
this court stated as follows in
Minister
of Finance & Others v Gore NO
(in relation to the defendant’s knowledge):
[5]
‘
The
defendants’ argument seems to us to mistake the nature of
“knowledge” that is required to trigger the running
of
prescriptive time. Mere opinion or supposition is not enough: there
must be justified, true belief. Belief, on its own, is insufficient.
Belief that happens to be true (as Rabie had) is also insufficient.
For there to be knowledge, the belief must be justified.
‘
It
is well established in our law that:
(a)
Knowledge is not confined to the mental
state of awareness of facts that is produced by personally witnessing
or participating in
events, or by being the direct recipient of
first-hand evidence about them.
(b)
It extends to a conviction or belief that
is engendered by or inferred from attendant circumstances.
(c)
On the other hand, mere suspicion not
amounting to conviction or belief justifiably inferred from attendant
circumstances does not
amount to knowledge.
It
follows that belief that is without apparent warrant is not
knowledge; nor is assertion and unjustified suspicion, however
passionately
harboured; still less, is vehemently controverted
allegation or subjective conviction.’
[13]
I do not consider the tentative assertions of the Trust, in the
letters of 22 January 2010 and 11 February 2010 respectively,
to mean
that it had actual or deemed knowledge of the damages it sustained.
The suggestion of an agreement that the damages be
ascertained during
harvest of the crop, demonstrates the Trust’s uncertainty on
the question of whether it suffered damages
or not at that stage.
Logically, and on the probabilities, it would have been impossible
for the Trust to have knowledge of any
loss or damages sustained
prior to 26 February 2010. The fertilizer could have only been
provided to the crop after its delivery
on 5 January 2010, after
which the crop would have continued with its growth until it was
harvested some months later. It would
have been only at this stage
that a determination could have been made as to whether a loss was
suffered. Harvest time is clearly
the determinative date – yet
it is not apparent from the agreed facts when harvest of the crop
occurred.
[14]
Quite clearly, therefore, it is impossible from the agreed facts to
determine when the Trust first became aware that it suffered
loss for
purposes of
s 12(3)
of the Act. It is perplexing how the trial court
could have determined that the Trust only became aware that it had
suffered damages
in March 2010, when that was not an agreed fact. The
trial court, accordingly, erred in assuming March 2010 to be the
period during
which the Trust became aware that it had suffered
damages as a result of Feedpro’s breach of contract. The trial
court also
erred in assuming that the harvest of the crop would only
take place in June 2010 – when that too was not an agreed fact.
[15]
It is regrettable that the trial court, despite ample guidance from
this court,
[6]
deemed it appropriate, in terms of
rule 33(4)
of the Uniform rules,
to separate the special plea from the remaining issues in the trial,
without first applying its mind to whether
the separation of the
special plea was convenient and appropriate in circumstances where,
the agreed facts were wholly inadequate
and, evidence needed to be
led in order to determine the special plea of prescription. In the
absence of evidence on when the crop
failure occurred, the trial
court was simply not in a position to determine the special plea in
the Trust’s favour. The trial
court, accordingly, erred in: (a)
separating the determination of the special plea from the remaining
issues therein, without giving
proper consideration to the issues in
the trial, and the need for evidence to be led by the parties on
these issues, and (b) deciding
the special plea on inadequately
stated agreed facts.
[16]
In the result, I make the following order:
(1)
The appeal is dismissed with costs save that the order is substituted
in the
following
terms:
‘
(a)
The order of the trial court dismissing the appellant’s special
plea of
prescription
is set aside.
(b)
The matter is remitted to the Free State Division of the High Court
for determination of the special plea of prescription together
with
the remaining issues in light of evidence to be led’.
_________________
F
Kathree-Setiloane
Acting
Judge of Appeal
APPEARANCES:
For
Appellants:
R Grundlingh
Instructed
by:
Lampen
Attorneys,
Bloemfontein
For
Respondent:
D T v R Du Plessis SC
Instructed
by:
HW
Smith & Marais,
Bloemfontein
[1]
It is common cause that the counterclaim is a debt as envisaged by
s
10
of the Act and that the applicable prescription period in respect
of the debt forming the subject matter of the counterclaim is
three
years. In terms of
s 11(
d
)
read with
s 12(1)
of the Act, civil debts prescribe three years from
the date the debt is due.
[2]
Minister of Finance &
others v Gore NO
[2006]
ZASCA 98
;
[2007] 1 All SA 309
(SCA) para 13.
[3]
[2014] ZASCA 107
;
2014 (6) SA 256
para 8.
[4]
[2009] ZASCA 98
;
2010 (2) SA 539
(SCA) para 7.
[5]
2007 (1) SA 111
(SCA) paras 18 and 19; [2007] 1 All SA 309 (SCA).
[6]
Denel (EDMS) Bpk
v
Vorster
[2004] ZASCA 4
;
2004 (4) SA 481
(SCA) para 3,
Absa
Bank Ltd
v
Bernert
2011 (3) SA 74
(SCA) para 2.