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[2016] ZAGPJHC 222
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Cook v Morrison and Others (14342/2014) [2016] ZAGPJHC 222 (4 August 2016)
REPUBLIC
OF SOUTH AFRICA
IN THE
HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 14342/2014
DATE:
4 AUGUST 2016
In the matter
between:
GEOFFREY
COOK
....................................................................................................................
Plaintiff
And
MURRAY
MORRISON
.................................................................................................
First
Defendant
NICHOLAS
FOX
........................................................................................................
Second
Defendant
CAROL
FOX
.................................................................................................................
Third
Defendant
FENELLA
LAWRENSON
.........................................................................................
Fourth
Defendant
SEABUSH
INVESTMENTS (PTY)
LTD
.....................................................................
Fifth
Defendant
SIBUYA
GAME RESERVE & LODGE (PTY)
LTD
..................................................
Sixth
Defendant
HESBER
IMPALA (PTY)
LTD
................................................................................
Seventh
Defendant
SALISBURY
TRADING
CC
.....................................................................................
Eighth
Defendant
SUMMARY
Civil
procedure – trials – separation of issues in terms of
Uniform Rule 33(4) – purposes of separation –
facilitating the convenient and expeditious disposal of litigation –
curtailment of expensive necessity of leading evidence
and
inconvenience to numerous witnesses –
onus
on party resisting separation – separation may be ordered in
discretion of court at any stage of proceedings – issue
of
special plea of prescription raised by defendants to plaintiff’s
particulars of claim – issue of prescription conveniently
and
properly separated from merits and plaintiff’s quantum of
damages – effect of plaintiff’s election not to
replicate
to special pleas of prescription.
J U D G M E N T
MOSHIDI,
J
:
INTRODUCTION
[1]
The sole issue for determination in this trial is the question
whether the plaintiff’s claim against the defendants has
prescribed.
[2]
On 17 April 2014, the plaintiff issued summons against the defendants
for restitution and damages. The pertinent portions of
the
particulars of claim,
[1]
alleged as follows:
“
11.
During or about February 2003, the plaintiff, Murray Morrison
[first
defendant]
and Fox
[the
second, third and fourth defendants]
,
concluded an oral joint venture agreement at Hopewell Farm, Southwell
District, Bathurst in the Eastern Cape to create an eco-tourism
reserve in the Kenton-on-Sea district in the Eastern Cape.
(insertions added).
12.
The material terms of the joint venture agreement were that:
12.1 Various
portions of land would be incorporated into the reserve;
12.2 A large
perimeter game fence would be constructed around the reserve;
12.3
All internal fences within the reserve would be removed;
12.4
The reserve would be stocked with certain game;
12.5 Vehicles and
equipment would be bought to maintain the infrastructure of the
reserve;
12.6
Lodges and/or camps would be constructed in the reserve and made open
to the public in exchange
for a fare to generate income from
visitors;
12.7
The plaintiff, Murray Morrison, Fox and the guided visitors would be
able to traverse the entire
reserve;
12.8
For the purposes of operating the reserve –
12.8.1
the land inside the reserve would be owned by separate corporate
entities as pleaded in paras
14 and 15;
12.8.2
game stock in the reserve, vehicles and equipment would be owned by a
different corporate entity
to the one pleaded in 12.8.1; and;
12.8.3
the eco-tourism business would be owned by a different corporate
entity to the ones pleaded
in 12.8.1 and 12.8.2.
13. The product of the joint venture became
known as Sibuya Game Reserve.
14. In 2003 the reserve was established on the
following tracks of land:
14.1
Portion 15 of the Gorah 398 which was owned by Hesber Impala (Pty)
Ltd;
14.2
Portion 3 of Theopollis 306 which was owned by Fox;
14.3
Portion 4 of Newtow 305 which was owned by Fox.
15.
During the period 2005 to 2006 three adjacent portions of land were
acquired by Seabush Investments (Pty) Ltd and subsequently
consolidated to form Portion 23 of The Gorah 398. In 2007
Portion 23 of The Gorah 398 was included into the reserve and the
large perimeter game fence around the reserve was extended to include
this land.
16.
The principal features of the joint venture, as agreed upon by the
joint venture partners in or about February 2003
[pleaded
in paras 11 and 12 above],
were
implemented from 2003 onwards.
17A.
On 7 May 2008 the plaintiff, Murray Morrison and Fox concluded a
written agreement, a copy of which is attached as annexure
“POC1”,
and which was signed by Fox at Kenton-on-Sea and by the plaintiff and
Murray Morrison in Sandton. The
terms of this agreement are
specifically incorporated.
17B.
The parties concluded the aforesaid agreement so that:
17B.1
Fox would concentrate on game farming and thus acquire 100% of the
shares in Salisbury Trading CC;
17B.2
The plaintiff and Murray Morrison would
concentrate on eco-tourism and thus acquire 100% of the shares
in
Sibuya Game Reserve & Lodge (Pty) Ltd;
17B.3
The plaintiff and Murray Morrison would acquire the sole right to
conduct an eco-tourism business on the land belonging to
Hesber
Impala (Pty) Ltd for a period of 20 years in exchange for which Fox
would be paid R20 000 (twenty thousand rand) per month
escalating
annually at the CPIX rate (the plaintiff and Murray Morrison to
exercise this right via Sibuya Game Reserve & Lodge
(Pty) Ltd
which they would own 50% each).
18.
… As at January 2010 the status of the joint venture and
the individual corporate entities operating the Sibuya
Game Reserve
was as follows:
18.1
Seabush Investments (Pty) Ltd, who owned the land within the reserve
described as
Portion 23 of the Gorah 398, had:
18.1.1 two shareholders
in the plaintiff who held 50% and Murray Morrison who held 50%;
18.1.2 two directors in the plaintiff and
Murray Morrison.
18.2
Hesber Impala (Pty) Ltd, who owned the land within the reserve
described as Portion
15 of the Gorah 398 and the Remainder of North
Gorah 302 as well as the large perimeter game fence, had:
18.2.1
three shareholders in the plaintiff who held 25%,
Murray Morrison who held 25%, and Fox who held 50%;
18.2.2
four directors in the plaintiff, Murray Morrison, Nicholas Fox and
Fenella Lawrenson.
18.3
Fox owned the land within the reserve described as Portion 3 of
Theopollis 306 and
Portion 4 of Newton 305 as well as all of the
shares in Salisbury Trading CC, who owns game in the reserve.
18.4
Salisbury Trading CC, who owns game in the reserve and is responsible
for maintaining
the general infrastructure in the reserve:
18.4.1 was wholly owned by Fox;
18.4.2
had only one director in Nicholas Fox.
18.5
Sibuya Game Reserve & Lodge (Pty) Ltd, who owned and operated the
eco-tourism
business within the reserve which included lodging and
hospitality, had:
18.5.1
two shareholders in the plaintiff who held 50% and Murray Morrison
who held 50%;
18.5.2 two directors in the plaintiff and
Murray Morrison.
18.6
Additionally:
18.6.1
Sibuya Game Reserve & Lodge (Pty) Ltd was permitted to construct
two tented camps on the land
owned by Hesber Impala (Pty) Ltd;
18.6.2
In exchange for permitting Sibuya Game Reserve & Lodge (Pty) Ltd
to operate the two tented
camps on its land, Hesber Impala (Pty) Ltd
was entitled to recompense from Sibuya Game Reserve & Lodge (Pty)
Ltd.
19.
By 2010 the plaintiff and Murray Morrison were the only two directors
and shareholders of Seabush Investments (Pty) Ltd and
Sibuya Game
Reserve & Lodge (Pty) Ltd.
20.
However, during this time they expressed differences of opinion
regarding the operation and funding of these two companies.
21.
In consequence of these differences, the plaintiff and Murray
Morrison held various discussions and/or negotiations during the
course of 2010 to facilitate the plaintiff’s exit from both
Seabush Investments (Pty) Ltd and Sibuya Game Reserve & Lodge
(Pty) Ltd.
22.
On or about 2 August 2010, in Johannesburg, the plaintiff and Murray
Morrison concluded an oral agreement which is referred
to as the
‘Swop Agreement’, to facilitate the plaintiff’s
exit from the two companies.
23.
The material express terms of the Swop Agreement, inter alia, were
that:
23.1
The plaintiff would sell his shareholding in both Seabush Investments
(Pty) Ltd and Sibuya
Game Reserve & Lodge (Pty) Ltd together with
all of his claims against both companies to Murray Morrison for a
mere R1 (one
rand) each;
23.2
The plaintiff would resign as director
of both Seabush Investments (Pty) Ltd and Sibuya Game
Reserve &
Lodge (Pty) Ltd;
23.3
The plaintiff would settle a debt owed
to Investec Bank Ltd by Seabush Investments (Pty) Ltd;
23.4
The plaintiff would pay R900,000 (nine hundred thousand rand) to
Murray Morrison;
23.5
The plaintiff would continue to hold 25% of the shareholding in
Hesber Impala (Pty) Ltd in his personal capacity;
23.6A
In exchange for the plaintiff performing as agreed to in paras 23.1,
23.2, 23.3, and 23.4
the parties would cause to be sub-divided and
thereafter transferred to the plaintiff a portion of land owned by
Seabush Investments
(Pty) Ltd known to the parties as the ‘Swop
Land’ on which the ‘Top House’ was situated;
23.6B
Murray Morrison would provide the
plaintiff with a written contract of sale on terms orally
agreed to
by the parties, within two days, so as to enable the plaintiff to
create the Swop Land by subdivision and to thereafter
have it
transferred to the plaintiff;
23.6C
The terms orally agreed to by the parties, to be incorporated into
the written contract of sale
as pleaded in para 23.6B were recorded
in an email sent by Murray Morrison to the plaintiff on 2 August
2010, a copy of which is
attached as annexure ‘POC2’;
23.7
The terms pleaded in paras 23.1 to 23.6 were subject to
Murray Morrison being able
to sell his shares in Sibuya Game Reserve
& Lodge (Pty) Ltd to Fox on terms agreeable to Murray Morrison.
24.
In partial fulfilment of the Swop Agreement:
24.1
The plaintiff transferred his shareholding in Seabush Investments
(Pty) Ltd and Sibuya Game Reserve & Lodge (Pty) Ltd
to Murray
Morrison as agreed;
24.2
The plaintiff resigned as director of
Seabush Investments (Pty) Ltd and Sibuya Game Reserve
& Lodge
(Pty) Ltd as agreed;
24.3
The plaintiff settled the debt owed by Seabush Investments (Pty) Ltd
to Investec Bank Ltd
which was an amount of R1,161,984 (one million
one hundred and sixty one thousand nine hundred and eighty four rand)
as agreed;
24.4
The share register of Hesber Impala
(Pty) Ltd was corrected to reflect that the plaintiff is
the holder
of 25% of the shareholding in that company in his personal capacity
as agreed;
24.5
Murray Morrison reached an
agreement with Fox on the sale of Sibuya Game Reserve &
Lodge
(Pty) Ltd, as agreed.
25.
However:
25.1
A written contract of sale in respect of the Swop Land was never
concluded in the manner
agreed to orally by the parties, and recorded
in Murray Morrison’s email of 2 August 2010, because Murray
Morrison, contrary
to what was agreed to in the Swop Agreement,
insisted on inserting additional restrictive terms that were
unacceptable to the plaintiff;
25.2
The portion of land known as Portion 23 of the Gorah 398 was never
subdivided in consequence
of which the Swop Land was never created.
26.
On 8 September 2010 Murray Morrison purported to impermissibly sever
and cancel part of the Swop Agreement with the following
result:
26.1
that Murray Morrison refused to perform the remainder of those
obligations due under the
Swop Agreement, in particular he refused to
furnish the plaintiff with a written contract for the sale of land in
respect of the
Swop Land as contemplated by the parties, with the
result that –
26.1.1
The Swop Land was never created from the subdivision of Portion 23 of
the Gorah 398; and
26.1.2 The plaintiff never
received transfer of the Swop Land as a quid pro quo for his
performance;
26.2
that Murray Morrison nevertheless retained the performance that he
received
under that portion of the Swop
Agreement that he purportedly did not cancel, inter
alia –
26.2.1
he retained for himself all of the shareholding in both Seabush
Investments (Pty) Ltd and Sibuya Game Reserve & Lodge
(Pty) Ltd
as transferred to him by the plaintiff for a mere R1 each;
26.2.2 he retained for himself and/or Seabush
Investments (Pty) Ltd the sum of R1,161,984 as paid by the plaintiff
to settle the
debt owed to Investec Bank Ltd;
26.2.3
he retained for himself and/or Seabush Investments (Pty) Ltd the Swop
Land which should have been created out of the subdivision
of Portion
23 of the Gorah 398 and transferred to the plaintiff.
27.
In acting as aforesaid, Murray Morrison’s conduct is
unconscionable and contra bonos mores and amounts to a breach and/or
repudiation of the Swop Agreement.
28.
On 29 September 2010 the plaintiff accepted Murray Morrison’s
breach and/or repudiation of the Swop Agreement and cancelled
the
Swop Agreement, alternatively the plaintiff hereby cancels the Swop
Agreement.
29.
In addition to the material express terms of the Swop Agreement
[pleaded
above]
it
was an implied and/or tacit term of the Swop Agreement that if the
Swop Land could not be subdivided and transferred to the plaintiff
because Murray Morrison failed to furnish the plaintiff with a
written contract of sale then Murray Morrison would be obliged to
make restitution to the plaintiff of whatever performance he had
received from the plaintiff including the performance retained
by him
as pleaded in paragraph 26.2
[above].
30.
In breach of the implied and/or tacit term pleaded in paragraph 29,
Murray Morrison has failed to make restitution.
30A.
The plaintiff repeats the contents of paragraph 28 that on 29
September 2010 he accepted Murray Morrison’s breach and/or
repudiation of the Swop Agreement and cancelled the Swop Agreement,
alternatively the plaintiff hereby cancels the Swop Agreement.
31A.
As a result of the breaches and/or repudiation aforesaid, the
plaintiff has suffered a loss and/or damages.
31B.
The plaintiff’s loss and/or damages result from him not being
restored to his former position because Murray Morrison
impermissibly
retained the performance pleaded in paragraph 26.2 for himself.
32.
If damages and/or the quantum cannot be agreed then the plaintiff is
entitled to a statement and debatement of account on two
bases:
32.1
he was a shareholder of both Seabush Investments (Pty) Ltd and Sibuya
Game Reserve &
Lodge (Pty) Ltd and is accordingly entitled to the
information; and
32.2 he is
a partner in the broader joint-venture known as the Sibuya Game
Reserve.
33. As at 2
August 2010, the reasonable estimated market value of:
33.1
Seabush Investments (Pty) Ltd was R12.6 million (twelve million six
hundred thousand rand);
33.2
Sibuya Game Reserve & Lodge (Pty) Ltd was R18 million (eighteen
million rand);
33.3 the
Swop Land with the Top House was R4 million (four million rand).
34A.
As an alternative to the damages claim pleaded and the relief sought
in para 31, the plaintiff
alleges that:
34A.1 Murray Morrison
has been enriched on the basis pleaded in para 26.2.
34A.2 the plaintiff
has been impoverished on the basis pleaded in paras 24.1, 24.2 and
24.3;
34A.3 Murray Morrison’s
enrichment was at the expense of the plaintiff; and
34A.4 the enrichment was unjustified.
34B.
In quantifying the extent of the plaintiff’s enrichment claim,
paras 32 and 33 are repeated.
”
THE DEFENDANTS’ SPECIAL PLEAS
[3]
The defendants, in their pleas, pleaded a special plea of
prescription, mainly in the following terms: that in paragraph
28 of the particulars of claim the plaintiff alleged that he accepted
the first defendant’s breach and/or repudiation of
the “
Swop
Agreement
” and cancelled the said
agreement on 29 September 2010; that prayers (a), (b), (c), (d) and
(e) of the amended pages 16 and
17 of the particulars of claim arise
from the alleged Swop Agreement and its purported cancellation by the
plaintiff on 29 September
2010; the plaintiff’s summons was
issued on 17 April 2014, being a date which is more than 3 years
after the date of the
purported cancellation of the Swop Agreement by
the plaintiff; and that, to the extent that the plaintiff has any
claims or causes
of action against the defendants, which the
defendants denied, such claims or causes of action have prescribed.
On this basis,
the defendants’ claim that the plaintiff’s
claim be dismissed with costs. The defendants thereafter
pleaded over
on the merits. It is common cause that there was
no repudiation to the special plea. I shall revert to this
aspect
later in the judgment.
APPLICATION
FOR SEPARATION OF ISSUES
[4]
At the commencement of the trial, which was supposed to be of long
duration, there was an application brought in terms of Uniform
Rule
33(4) by the first and the fifth defendants, for the separation of
their, as well as the second to the seventh defendants’
special
pleas of prescription from all other issues. In the
alternative, the application sought to separate the prescription
issue and the merits, or that the merits be stayed until final
determination of the special pleas of prescription, alternatively
the
merits. The application for separation was opposed strenuously
by the plaintiff on the grounds,
inter
alia
, that prescription cannot be
separated out since the issue of whether or not the plaintiff’s
claims have prescribed depend
in some measure on whether a
partnership is extant, further that the existence of a partnership
entails a factual enquiry that
requires to be determined by the
leading of evidence in the pending trial. I deal in more detail
later below with the submissions
made opposing the separation.
The second, third, fourth, sixth and eighth defendants did not take
part in these proceedings.
RESERVATION
OF RULING
[5]
At the conclusion of argument on the separation, and prescription
issues, which lasted at least one day, I reserved judgment.
This, to the great, but incomprehensible and visible consternation of
the plaintiff’s counsel. The reason for the reservation
of the
judgment on the separation issue, was more than plain. The
issues raised in the separation application required more
than
careful consideration, with due regard to the facts and applicable
legal principles. Be that as it may, what follows hereafter
is my
determination of the issues raised. By agreement between the
parties, no evidence was led.
[6]
There is no doubt at all in my mind that the separation applications
have profound merit and despite the plaintiff’s protestations,
and these ought to succeed. The separation issue first.
Without going into great detail, it is settled law that one
of the
main purposes of separation of issues under Rule 33(4) is
facilitating the convenient and expeditious disposal of litigation,
and such separation may be ordered at any stage of the proceedings.
See, for example,
Denel (Edms) Bpk v
Forster
2004 (4) SA 481
(SCA) at 485.
It is also a discretionary matter. In
Rauff
v Standard Bank Properties
2002 (6) SA
693
(W) at 703F-H, the Court said:
“
The
entitlement to seek the separation of issues was created in the Court
Rules so that an alleged lacuna in the plaintiff’s
case or an
answer to the case can be treated; or simply so that a factual issue
can be determined which can give direction to the
rest of the case
and in particular to obviate a parcel of evidence. The purpose is to
determine the fate of the plaintiff’s
claim (or one of the
claims) without the costs and delays of a full trial. Proper
handling of litigation – and accordingly
professional handling
of a case – requires that this avenue be explored to the
advantage of the own client, the flow of Court
hearings and even of
the other client …
”
In
my view, this present application for separation is such a case.
In any event, the
onus
was on the plaintiff to satisfy the court that this application
should not be granted. See
Braaf v
Fedgen Insurance Ltd
1995 (3) SA 938
(C) at 939. Such
onus
has not been discharged in the present matter. The special
pleas of prescription raised by the defendants, are ones of law,
which may decide the outcome of the trial, one way or the other,
without the expensive necessity of leading evidence. It
was in
the interest of justice, and public interest, to dispense with the
lined-up witnesses as quickly as reasonably possible,
and adjudicate
first on this issue of prescription properly and carefully. The fact
that, as a result of the reservation of the
judgment, the long
duration of the trial was curtailed and lost to the parties, is an
irrelevant, yet regrettable, consideration.
For all these reasons, I
am inclined to grant the separation of issues which I hereby do.
The merits of the plaintiff’s
claim and possible quantum of
damages flowing therefrom will stand over for later determination,
depending on the outcome of the
prescription issue.
THE
PRESCRIPTION ISSUE
[7]
I turn to the vexed issue of prescription. In order to properly
set the scene at the outset, in an appeal concerning whether
a claim
by a liquidator under
sec 32
of the
Insolvency Act 24 of 1936
to have
a court set aside an impeachable transaction, and to make a
declaration that the liquidator is entitled to recover the
alienated
property, prescribes under the
Prescription Act 68 of 1969
, and if
so, when prescription starts to run against the claim, the Court in
Duet and Magnum Financial Services CC
(in liquidation) v Koster
[2010] 4 All
SA 154
(SCA) at para [9] said:
“
It
seems to me that the liquidators misunderstood their own claim.
Prescription is about rights that come into existence but
have ceased
to exist by the passage of time. If a right has not come into
existence then there is nothing that is capable
of expiring. That is
why prescription is raised in a plea. If no existing right has
been alleged in the particulars of claim,
then the particulars of
claim are excipiable and will not attract a plea. It is only
once facts have been alleged that establish
the existence of a right
that the question whether that right had expired, is capable of
arising.
”
[8]
The main contentions of the plaintiff, as I understood the argument,
came to this: the special pleas of prescription are
defective
because they both refer to the plaintiff’s “
cause
of action
” as having prescribed,
that a cause of action does not prescribe, as only a “
debt
”
does under
sec 10(1)
read with
sec 11(d)
of the
Prescription Act 68
of 1969
(“
the
Prescription Act
&rdquo
;).
In this regard, reliance is placed on,
inter
alia
,
Off-Beat
Holiday Club v Sanbonani Holiday Spa Share Block
[2016]
ZASCA 62,
Makate v Vodacom (Pty) Ltd
[2016] ZACC 13, and
Aeronexus
(Pty) Ltd v Firstrand Bank Limited
[2011] JDR 0181 (SCA). The contention of the plaintiff is also
that, the oral joint venture agreement between the first defendant
and Fox, which became known as Sibuya Game Reserve, has never
terminated
ipso facto
,
that the first defendant and Fox are still partners in the joint
venture. As a consequence, so the argument proceeded,
sec 13
of the
Prescription Act does
not require certain people in particular
relationships, such as a partnership, to sue each other for as long
as their partnership
endures. In this regard, reliance was
placed on,
inter alia
,
Absa Bank Ltd v Keet
2015
(4) SA 474
(SCA).
[9]
The plaintiff in other words contended that: the plaintiff is
not obliged to replicate to a special plea of prescription,
but is
entitled to advance any legal arguments on the facts pleaded;
that an exception cannot be taken to a point of prescription
in
reference to
Living Hands (Pty) Ltd and
Another v Ditz and Others
2013 (2) SA
368
(GSJ); that when the plaintiff accepted the defendants’
repudiation and proceeded to cancel the agreement (2010) prior
to the
issue of summons, a number of claims arose, not all of which are
debts; that the plaintiff’s vindicatory claim against
the
defendants is alive and extant; and that the present proceedings are
not motion proceedings which require all the evidence
to be contained
in the papers.
[10]
It is also necessary to refer briefly to
Van
Deventer v Ivory Sun Trading 77.
[2]
There, the Court was concerned with the issue whether a right of
pre-emption, acquired by virtue of a testamentary disposition
and
registered against the title deed of a farm, prescribed prior to the
appellant exercising such right. In the process
of upholding
the appeal, the Court at para [21] said:
“
In
Umgeni Water v Mshengu Ponnan JA set out the position in determining
whether a debt is due:
‘
[5]
… According to
s 12(1)
of the Act, prescription shall commence
to run “as soon as the debt is due”. The words
“debt is due”
must be given their ordinary meaning.
[The Master v IL Back & Co Ltd
1983 (1) SA 986
(A) at 1004F.]
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. Stated another way, the debt must be one in
respect of which the debtor is under an obligation
to pay
immediately. [See Western Bank Ltd v SJJ van Vuuren Transport (Pty)
Ltd and Others
1980 (2) SA 348
(T) at 351; and HMBMP Properties (Pty)
Ltd v King
1981 (1) SA 906
(N) at 909 and the cases there cited.]
[6]
A debt can only be 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” has been held to mean:
“… every fact which it would be
necessary for the
plaintiff to prove … in order to support his right to judgment
of the Court. It does not comprise every
piece of evidence which is
necessary to prove each fact, but every fact which is necessary to be
proved”; or slightly differently
stated: “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. It includes all that a
plaintiff must set out in his declaration
in order to disclose a
cause of action. Such cause of action does not ‘arise’ or
‘accrue’ until the occurrence
of the last of such facts
and consequently the last of such facts is sometimes loosely spoken
of as the cause of action.”
[Evins v Shield Insurance Co
Ltd
1980 (2) SA 814
(A) at 838 and the cases there cited by Corbett
JA; see also Truter and Another v Deysel
[2006] ZASCA 16
;
2006 (4) SA 168
(SCA) in
paras 16, 18 and 19.]’
”
(
footnotes
omitted)
[11]
Having all the above legal principles in mind, the facts of the
present matter require close examination. Contrary to
the
plaintiff’s assertions,
inter
alia
,
that its vindicatory action in respect of the shares is not a debt,
including its restitution claim, as well as its claim for
a statement
and debatement of account, the defendants in the special pleas argued
otherwise. For their contention, the defendants
relied on,
amongst others,
H.A.
Clarke v J. Bradfield,
[3]
for the view that the plaintiff never had possession of the shares or
became owner thereof. See also
Van
der Merwe v Karroo Vleisbeurs Bpk.
[4]
In short, the continued argument was that as the plaintiff is not
owner of the shares, the remedy of
rei
vindicatio
was not available to it, it may not vindicate them. The
shares were not transferred to the plaintiff. The defendants
dispute
the existence of a partnership between the plaintiff and the
defendants, and consequently, the reliance by the plaintiff
on the
provisions of
sec 13(1)(d)
of the
Prescription Act, was
misplaced.
They say that relationship was no more than a joint venture which
does not have all the essentials of a partnership
proper.
Instead, the defendants relied on the provisions of
secs 10
,
11
and
12
of the
Prescription Act emphasising
the view that, the plaintiff’s
claim was a debt which is susceptible to extinctive prescription
after three years from September
2010. The latter period is, it
will be recalled from paragraphs 26 to 28 of the particulars of claim
whereat the plaintiff
alleged breach of the agreement, and acceptance
of the repudiation, as well as cancellation of the Swop Agreement.
[12]
In summary, the defendants’ argument came to this: the
amended particulars of claim undeniably show that, the first
defendant allegedly breached the so-called Swop Agreement on 8
September 2010; thereafter, and on 29 September 2010, the plaintiff
duly accepted the first defendant’s repudiation and proceeded
to cancel the agreement; that the summons in the instant matter,
in
which the plaintiff cited the first and fifth defendants, and other
defendants, was only issued on 17 April 2014, more than
three years
after the repudiation and cancellation of the Swop Agreement, and
that, as a consequence, the plaintiff’s claims
and debts, and
all causes of action, which arose on 29 September 2010, including any
damages claims, became prescribed. This,
in reference to the
main relief sought whereat the plaintiff seeks, as against the first
and fifth defendants, the alleged delivery
to him of 50% shareholding
in the fifth defendant, which he sold to the first defendant in March
2010, as well as reinstatement
to the board of directors of the fifth
defendant. It is plain that the plaintiff also seeks an order against
the first defendant
and the fifth defendant in terms of which they
are obliged to transfer to him 50% of the shares in the fifth
defendant, and the
reinstatement to the board of directors of the
fifth defendant. The monetary claims of the plaintiff are also
clearly set out in
the amended particulars of claim.
[13]
It is common cause that since the acceptance of repudiation and the
cancellation of the agreement in September 2010, no further
action
took place. Despite this, the plaintiff persists that its
claims are not debts and its cause of action has not prescribed.
This approach and conduct of the plaintiff, in my judgment militates,
substantially against the plaintiff’s cause.
In
dismissing a special plea of prescription, in a somewhat different
setting where a defective summons was originally issued,
but later
amended, the Court in
Aeronexus
v Firstrand Bank Limited,
[5]
said:
“
The
term ‘debt’ is not defined in the Act. In
interpreting it, courts have given it a broad, flexible meaning,
capable of different, context-based connotations. This meaning
refers more generally to the claim and is wider than the technical
term ‘cause of action’ (the phrase ordinarily used to
describe the set of material facts relied upon to establish the
debt. It is therefore critical to guard against confusing a
debt with the cause of action which begets it.
”
At
para [15] of the judgment, the Court proceeded to state that:
“
It is
well to bear in mind that ‘it is inaction, not legal
ineptitude, which the
Prescription Act is
designed to penalise …’.
”
In
the footnote, reference is made to
Mazibuko
v Singer
1979 (3) SA 258
(W) at 266A,
and
Evins v Shield Insurance Co Ltd
1980
(2) SA 814
(A) at 825F-H.
[14]
In my view, based on all the above legal principles, the contentions
of the defendants that since the summons in the present
matter was
issued on 17 April 2014 only, more than three years after the
cancellation of the agreement, any claims or causes of
action or
debts against them have prescribed, are well-grounded. The special
pleas of prescription must succeed. In
Van
Deventer v Ivory Sun Trading 77 supra
,
at para [23], the Court said:
“
To
determine whether the debt was due, the appellant had to have a
complete cause of action in respect of such debt. This
means,
according to Umgeni Water and the cases cited therein, that every
fact necessary to prove and support the appellant’s
right to
judgment had to exist for the appellant to be able to institute
action for specific performance.
”
In
my view, the plaintiff clearly had a complete cause of action in
respect of its alleged claims upon the acceptance of the defendants’
repudiation and cancellation of the agreement in September 2010,
already.
[15]
In arriving at the above determination, I have had regard to recent
case law, such as
Staegemann
v Langenhoven and Others
,
[6]
and
Absa
Bank Ltd v Keet.
[7]
The latter case mainly concerned the question whether a claim under
rei
vindicatio
became
prescribed after three years by virtue of
sec 10
of the
Prescription
Act. In
the present matter, the applicability of vindication
has already been discarded. I have also had regard to other
case law
relied upon by the plaintiff. These include,
Makate
v Vodacom (Pty) Ltd
,
[8]
and
Off-Beat
Holiday Club v Sanbonani Holiday Spa.
[9]
The facts of these cases are readily distinguishable from the facts
of the instant matter. For example, in the
Makate
matter,
the plea of prescription was dismissed since Vodacom failed to prove
that its obligation towards Makate was a debt susceptible
to
prescription, pending an obligation to first negotiate. The
negotiation, “…
will
not involve the payment of money, the delivery of goods or the
rendering of services
”.
(See paragraph 198 of the judgment.)
THE
REPLICATION
[16]
I must again deal briefly, with the issue of repudiation. The
defendants complained that the plaintiff has not replicated
to the
special pleas of prescription, and that in terms of the Rules of
Court, the plaintiff is time barred from replicating.
This, so
the complaint proceeded, prejudiced the defendants since they are
unable to prepare for the trial and do not know what
to expect.
In the heads of argument, the plaintiff countered, in essence as
pointed out, that it was not necessary to deliver
a replication if
the plaintiff wishes only to deny the allegations contained in the
special pleas, and that the consequences, if
any, is that by not
replicating, are that the plaintiff is deemed to have denied all of
the allegations in the special pleas.
In this regard, reliance
was placed on,
inter
alia
,
Milne
N.O. v Shield Insurance Co Ltd
,
[10]
and for the contention that plaintiff elected not to replicate
because no fresh facts were needed to demonstrate that his claims
have not prescribed.
[17]
In
Matiwane
v Minister of Police
,
[11]
however, a contrary view was expressed when the Court said:
“
It
seems to me that such allegations require to be dealt with by the
filing of a replication even when it results in a bare denial
and a
joinder issue. Such allegations require consideration by
attorney and counsel and their decision should be reflected
in the
formal pleading by replication. In my view it is a salutary practice
and a more elegant form of pleading in such cases as
this one, where
new allegations and issues are raised in the plea, to file a
replication which formally deals therewith and contains
a joinder of
issue.
”
[18]
The plaintiff’s contentions regarding his reasons for not
replicating to the special plea may be convenient and justified
to
him for present purposes. However, the factual situation is
that in terms of Uniform
Rule 26
, the plaintiff remains
ipso
facto
barred. However, it is by now settled procedural practice that this
fact alone does not preclude the plaintiff from proceeding
with the
pending action. In simple terms, it means the pleadings are
deemed to be closed, and the plaintiff is perfectly
entitled to have
the trial set down for hearing. See in this regard,
Moghambaram
v Travagaimmal
,
[12]
as well as Uniform
Rule 25(2).
The fact that the plaintiff
remains barred, may or may not be to the advantage of the defendants
at the subsequent trial.
It is difficult to predict.
What, however, remains of importance, in my judgment, and for present
purposes, is that I am
not called upon or able to make a definitive
finding on the effect of the plaintiff’s election not to
replicate to the special
pleas of prescription. This, largely in view
of my determination that his claims against the participating
defendants in the present
proceedings, have become prescribed.
The failure to replicate seems to strengthen the defendants’
cause for now. For
the sake of completion, I must mention that the
second, third, fourth, sixth and eighth defendants are not part of
the present
proceedings.
CONCLUSION
[19]
To sum up. The finding is that due to the plaintiff’s
inaction since September 2010, his claims and debts against
the
defendants have become prescribed, debts or causes of action, in
terms of
secs 10
,
11
and
12
of the
Prescription Act. The
reliance by the plaintiff on the provisions of
sec 13(1)(d)
of the
Prescription Act to
the effect that, the plaintiff and the defendants
“
are partners and the debt is a
debt which arose out of the partnership relationship
”,
was misplaced. I am however unable to make a conclusive
determination on the effect of the plaintiff’s failure
to
replicate to the special pleas, in the context of the current
proceedings although the failure of the plaintiff to replicate
in
these circumstances, seems to tilt the scales in favour of the
opposing defendants. The costs, which is a discretionary
matter, must follow the outcome.
[20]
In the result I make the following order:
20.1
The issue of the special pleas of prescription is separated from the
merits and quantum of damages of the plaintiff for later
determination, if it becomes necessary.
20.2
The special pleas of prescription are upheld with costs.
D
S S MOSHIDI
JUDGE
OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
COUNSEL
FOR THE PLAINTIFF K HOPKINS
INSTRUCTED
BY BOUWER KOBEDI MORABE ATTORNEYS
COUNSEL
FOR THE FIRST AND
THE
FIFTH DEFENDANTS
A J VENTER
INSTRUCTED
BY
MURRAY VAN RENSBURG INC ATTORNEYS
COUNSEL
FOR THE SECOND,
THIRD,
FOURTH, SIXTH AND
EIGHTH
DEFENDANTS
K VAN HUYSSTEEN
INSTRUCTED
BY
FLUXMANS ATTORNEYS INC
DATE
OF HEARING
21 MAY 2016
DATE
OF JUDGMENT
4 AUGUST 2016
[1]
Paras
11 to 34B.
[2]
2015
(3) SA 532
(SCA).
[3]
(1891-1892)
6 EDC 238.
[4]
1963
(3) SA 831
(C) at 835.
[5]
(249/2010)
[2011] ZASCA 21
(17 March 2011) at para [13].
[6]
2011
(5) SA 648
(WCC).
[7]
2015
(4) SA 474
(SCA).
[8]
[2016]
ZACC 13.
[9]
(20231/2014)
[2016] ZASCA 62
(25 April 2016).
[10]
1969
(3) SA 352
(A).
[11]
1979
(3) SA 312
(ECD) at 313H.
[12]
1963
(3) SA 61
(D).