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[2015] ZAGPJHC 161
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Mettle Development Finance One (Pty) Ltd v Calgro M3 Developments (Pty) Ltd (A5005/2014, 40945/2011) [2015] ZAGPJHC 161 (6 July 2015)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE NO: A5005/2014
COURT A QUO CASE NO:
40945/2011
DATE: 06 JULY 2015
In the matter between:
METTLE DEVELOPMENT FINANCE ONE (PTY)
LTD
..................................................
Appellant
And
CALGRO M3 DEVELOPMENTS (PTY)
LTD
..................................................................
Respondent
J U D G M E N T
LAMONT, J:
[1] For the sake of convenience the
parties are referred to herein as plaintiff (respondent) and
defendant (appellant).
[2] During or about the period
September 2007 to November 2007 the plaintiff and the defendant
entered into an agreement the terms
of which are encapsulated in a
written document dated 22 November 2007 which is signed by each of
the parties. It was a term of
the agreement that the plaintiff would
make certain payments and “if for whatever reason the said
agreements are not finalised
within 30 days hereof … you
[Defendant] will forthwith on our demand refund to us the aforesaid
amounts in cash …”.
Notwithstanding the stipulation
that the plaintiff would be entitled to demand payment if certain
agreements were not finalised
within 30 days the parties proceeded to
treat the right of the plaintiff to reclaim payment as not having
fallen due until finally
it became clear that the agreements were not
going to be concluded. By 26 March 2008 it became apparent that the
agreements contemplated
in the agreement between the parties were
never going to be concluded. This is apparent from a letter of that
date.
[3] As at 26 March 2008 the amounts
claimed by the plaintiff had already been paid by the plaintiff, the
last payment having been
made during or about early January 2008.
[4] As at 26 March 2008 the amounts
which had been paid by the plaintiff and which the defendant had
agreed to pay to the plaintiff
were known and claimable.
[5] Over a period of time there were
negotiations between the parties concerning how if and when the
amount would be paid. The
negotiations did not lead to any
agreement.
[6] The defendant in its special plea
raised the question of prescription. The defendant (in its plea as
ultimately amended) alleged
that the claim became due and payable
during or about March 2008 alternatively during May 2008 and that as
summons had not been
served until October 2011, the claim had become
prescribed three years after one of the two dates. The plaintiff in
a replication
alleged that the plaintiff had made demand during
October 2008 and that prescription would run from the date of demand
terminating
at a date after summons had been issued.
[7]The contention of the plaintiff was
that prescription would only commence after demand had been made and
that as demand had not
been made prior to that date prescription did
not commence to run. There is no express allegation that the earlier
demands relied
on by the defendant were not demands contemplated by
the agreement. Those appear to be the issues the court a quo had to
decide.
[8] The Prescription Act No 68 of 1969
(the Act) provides in section 12(1) that prescription shall commence
to run as soon as the
debt is due. In its ordinary meaning a debt is
due when it is immediately claimable by the creditor and as its
correlative, it
is immediately payable by the debtor. The debt must
be one in respect of which the debtor is under an obligation to pay
immediately.
A debt is only said to be claimable immediately if a
creditor has the right to institute an action for its recovery. In
order to
be able to institute an action for the recovery of a debt a
creditor must have a complete cause of action in respect of it. The
expression “cause of action” means the entire set of
facts which give rise to an enforceable claim and includes every
fact
which is material to be proved to entitle a plaintiff to succeed in
his claim.
See: Van Deventer v Ivory Sun Trading
77
2015 (3) SA 532
(SCA) at 539;
Umgeni Water v Mshengu
[2010] 2 All SA
505
(SCA) paras [5] to [6].
[9] The question to be decided in the
present case is whether or not the fact that the agreement stated
“You will forthwith
on our demand refund to us the aforesaid
amount/s” delays prescription of a claim otherwise claimable
until the demand has
been made.
[10] Simply put was the plaintiff’s
cause of action complete even although demand had not been made.
[11] In my view the solution to the
problem is that the debt became due once the trigger event entitling
the plaintiff to make demand
had occurred. That trigger event was the
fact that the agreements which originally had to be concluded within
a 30 day period were
never going to be concluded. That event
occurred during mid-March 2008. It is the trigger event which causes
the amount to become
due not the notice of demand. It is logically
so as the notice of demand is a step in the process of claiming an
already due amount.
It is not a pre-condition to the amount becoming
payable. Prescription commences to run once the debt is due. The
notice of demand
is not a pre-requisite for the issue of summons. The
summons would constitute the demand. No demand is required to entitle
the
plaintiff to sue. There is no mora issue which might require
notice to be given. See e.g. Ridley v Marais
1939 AD 5
at 9, Fluxman
v Brittain
1941 AD 273
at 294.
[12] The principle is discussed in
Damont N.O. v Van Zyl
1962 (4) SA 47
(C) and many of the applicable
authorities cited at 51. The making of or failure to make demand does
not impact on the date when
prescription commences; it commences when
the trigger event occurs: in this case during March 2008.
[13] The notice provided for in the
contract is not a condition precedent to the plaintiff’s right
of action under the contract.
The plaintiff’s right of action
accrues once the trigger event has occurred namely either the 30 days
has elapsed or there
is no prospect of the agreements being
concluded. See Standard Finance Corporation of South Africa Limited
(in liquidation) v
Langeberg Ko-operasie Beperk
1967 (4) SA 686
(A).
[14] The problem can be solved in
another way. The solution produces the same result. A creditor cannot
by his inaction delay when
prescription commences. Hence, if the
creditor is entitled to demand payment, prescription commences to run
from that moment. See
MacLeod v Kweyiya 2013 (6) SA1 (SCA) at 9,
Gunase v Anirudh
2012 (2) SA 398
(SCA) at 14-15, Uitenhage
Municipality v Moloy
[1997] ZASCA 112
;
1998 (2) SA 735
(SCA) at 742. In addition there
is a principle that a creditor is not able by his own conduct to
postpone the commencement of prescription.
See Benson and Another v
Walters and Others
1981 (4) SA 42
(C) at 49G and the cases therein
cited.
[15] Even the need to take a simple
procedural step which the creditor can take without external aid does
not delay prescription
commencing. See Santam Ltd vs Ethwar
[1998] ZASCA 102
;
1999 (2)
SA 244
(SCA)
[16] The notice of demand relied upon
by the defendant dated 26 March 2008 claimed payment. The fact that
it is not expressed in
strong language, does not threaten action and
is conciliatory, in form does not detract from the fact that it is a
demand. The
plaintiff requires defendant to pay, that is all that a
demand is. For this reason too I would find that prescription
commenced
by no later than 26 March 2008.
[17] Hence the claim prescribed prior
to the services of summons. The claim should have been dismissed with
costs.
[18] During argument counsel for the
plaintiff submitted that there was an agreement between the parties
in terms of which the right
to claim payment was postponed pending
negotiation between the parties. This rather startling submission had
no foundation in the
pleadings or the evidence. No such agreement was
pleaded. In the evidence counsel asked a witness whether, if such an
allegation
was made it would be true. The substance of the reply was
that the witness could not contest it if it occurred. It did not
occur.
No witness gave such evidence. The submission is absolutely
without foundation. Even if it had substance it would probably be met
by a defence raising the principle that indulgences granted allowing
late payment of overdue amounts are just that.
[19] I would make the following order.
1. The appeal is upheld.
2. The respondent is to pay the costs
consequent upon the appeal.
3. The order made by the court a quo is
set aside.
4. The following order is substituted
therefore.
“Plaintiff’s action is
dismissed with costs”
C. G. LAMONT
JUDGE OF THE HIGH COURT OF SOUTH
AFRICA
GAUTENG LOCAL DIVISION
I agree
T.M. MASIPA
JUDGE OF THE HIGH COURT OF SOUTH
AFRICA
GAUTENG LOCAL DIVISION
I agree
M.P.TSOKA
JUDGE OF THE HIGH COURT OF SOUTH
AFRICA
GAUTENG LOCAL DIVISION
ATTORNEYS FOR APPELLANT : J.G. Smit
COUNSEL FOR THE APPELLANT: Adv. H.F.
Geyer
ATTORNEYS FOR RESPONDENT: Barnards
Incorporated
COUNSEL FOR THE RESPONDENT: Adv.
P.F. Louw SC Adv. J.W. Kloek
DATE/S OF HEARING : 31 July 2015
DATE OF JUDGMENT : 06 July 2015