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[2020] ZAGPJHC 393
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Cirano Investments 307 (Pty) Ltd v Execujet Aviation (Pty) Ltd (10831/2012) [2020] ZAGPJHC 393 (4 September 2020)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG
LOCAL DIVISION, JOHANNESBURG)
Case
number: 110831/2012
NOT
REPORTABLE
In the matter
between:
CIRANO
INVESTMENTS 307(Pty) Ltd
Plaintiff
and
EXECUJET
AVIATION (Pty) Ltd
Defendant
JUDGMENT
Carelse
J:
[
1]
Cirano Investments (Pty) Ltd, the Plaintiff sues Execujet Aviation
(Pty) Ltd, the Defendant
for damages suffered as a result of a breach
of an agreement, alternatively the repudiation thereof.
[2]
The defendant raised a special plea of prescription. By agreement the
parties applied
in terms of Uniform Rule 33(4) for the issue of the
special plea to be determined separately and that all other issues be
postponed
sine die. I accordingly granted the order separating the
issue of prescription and ordered that all other issues be postponed
sine die.
Factual Background
[3]
On 20 December 2011, the Plaintiff and the Defendant entered into a
written aircraft
lease agreement (‘the agreement’). The
relevant and material terms of the agreement for the purpose of this
judgment
are:
3.1
The Plaintiff leased a Hawker 800 XP aircraft to the Defendant.
[1]
3.2
The lease would be for a period of 12 months, commencing on 7 January
2012 and would come to an end on 6 January 2013.
[2]
The lease would commence upon the delivery of the aircraft
3.3 The
Defendant agreed to pay rental to the Plaintiff as follows:
3.3.1
A guaranteed 50 hours per month at a rate of US $ 1850, 00 which is
equivalent to US$ 94 250, per month.
[3]
3.3.2
A rate of US $ 1993, 00 for each and every flight hour that the
Defendant operated the aircraft in excess of the said monthly
guaranteed minimum of 50 flights per month.
[4]
3.4 Before the aircraft
departs on 7 January 2012 the Defendant shall pay to the Plaintiff in
advance:
3.4.1
The value of one month’s rental as a refundable deposit, being
US $ 94 250, 00 to secure the aircraft.
[5]
3.4.2
The first month’s rental as calculated for the minimum of 50
guaranteed flight hours per month, of US $ 94 250,
00 before the
aircraft departed from Lanseria.
[6]
3.5 The defendant further
agreed to pay:
3.5.1
The monthly rental for the subsequent months in advance, by the
first day of the relevant month.
[7]
3.5.2
The rate in respect of the additional hours flown with the aircraft (
in excess of the said monthly guaranteed minimum) in
arrears, within
15 days of the date of the invoice of the relevant month.
[8]
3.5.3
All
payments made to the under the agreement shall be in South African
rands in terms of the lease
,
and the exchange rate shall be determined on the 25
th
of the preceding month and as determined and published by
www.oanda
.
com.
[9]
( my underlining).
[4]
The Plaintiff alleges that on 23 January 2012 it delivered the
aircraft at Lanseria
to the Defendant. The Plaintiff further alleges
that it complied with all its obligations under the agreement.
[5]
On 22 March 2012 the Plaintiff instituted action proceedings against
the Defendant.
In its particulars of claim (‘initial
particulars of claim’) the Plaintiff alleges that the defendant
breached the
following of its obligations under the agreement namely:
5.1 The Defendant failed
to pay the deposit of US $ 94 250, 00 to the Plaintiff on or
before 7 January 2012.
5.2 The Defendant failed
to pay an amount equal to the first month’s rental of US$
94 250,000 on or before 7 January
2012.
5.3
The Defendant failed or refused to take delivery of the aircraft on
or about 23 January 2012.
[6]
Because of the Defendant’s alleged breaches, alternatively the
Defendant’s
repudiation of the lease, the Plaintiff cancelled
the lease
[10]
and alleges that
it has suffered damages
[11]
in
the amount of US $ 519 187, 50
[12]
calculated as follows:
‘
rental
for the aircraft over the term of the lease, calculated on the
minimum monthly of 50 flying hours at the rate of US $ 1885,00
per
flight hour , comprising US $ 94 250,00 per month from 23
January 2012 to 6 January 2013 (11,25 months) totalling US $
1 060,
312,50 less the maintenance costs and all replacement and repairs of
components averaging US $ 48, 100 per month over
the duration of the
terms(11.25 months) totalling US $ 541,125.’
[7]
In its initial particulars of claim (22 March 2012) the Plaintiff
prayed for
payment
in the amount of US $ 519 187,50 or the South African rand
equivalent (
my
underlining).
[13]
The
Defendant
[14]
submits that the Plaintiff did not in terms of clause 8.4.1 of the
agreement claim payment in South African rands.
[8]
It is common cause that the Plaintiff has effected two amendments to
its initial particulars
of claim. In its amended plea the Defendant
alleged that the Plaintiff’s case is for damages arising out of
a loss of profits
which Plaintiff is precluded from claiming in terms
of clause 11.4 of the agreement.
[15]
This issue was dealt with as a special plea by Wepener J. In a
judgment delivered by Wepener J on this issue which issue was put
to
rest when the Court found that the Plaintiff is not precluded by the
provisions of 11.4 to sue for damages it suffered as a
result of the
cancellation, alternatively the Defendant’s repudiation of the
agreement.
[9]
On 1 December 2016 the Plaintiff served a notice of amendment in
which the Plaintiff
changed its claim from a dollar amount of
US $ 519 187.50 calculated as set out in paragraph [6] above
[16]
to a rand claim of
R4 759 853, 39 calculated as follows:
‘
14.1
rental for the aircraft over the term of the lease, calculated on the
minimum monthly income of 50 flying hours at a rate of
US $ 1885,00
per flight hour, comprising US $ 94 250,00 per month, from
23 January 2012 to 6 January 2013, totalling
R8909 101,07 in South
African rands. (The conversion from US dollars to South African rands
is in accordance with clause 8.4.1
of the lease),
[17]
14.2 less insurance costs over the duration of term, which the
Plaintiff would otherwise be liable for in terms of clause
4 of the
lease totalling R2 099 477 01; income which the Plaintiff
received from third parties who utilised the aircraft
during the
contract term in the amount of R 2049 770.67.’
[18]
The
amendment was effected on 19 December 2016(‘the first
amendment”).
[19]
[10]
On 28 September the Plaintiff served a further notice to amend its
particulars of claim to increase
its claim which amendment was
effected on 12 October 2018. The Plaintiff increased its claim by R
1 689 520. 94 from
R4 759, 853,39 to R 6
449 374,33 calculated as follows;
‘
14.1
rental on the aircraft over the term of the lease, calculated on the
minimum monthly income of 50 flying hours at a rate of
US $ 1885,00
per flight hour, comprising US $ 94 250,00 per month, from 23
January 2012 to 6 January 2013, totalling R8 909
1102,07 in
South African rands ( The conversion from US dollars is in
accordance with clause 8.4.1 of the lease) less 14.2.1
insurance
costs over the duration of the term , which the Plaintiff would
otherwise be liable for in terms of clause 4 of the lease
totalling
R90 121.43 ; income which the Plaintiff received from 3
rd
parties who utilised the aircraft during the contract term in the
amount of R2 114 167, 167,47; less fuel paid by the
Plaintiff of R1031012.86; less salaries and expenses towards pilots
R848 028,91; less hangerage fess and fees payable to Lanseria
airport R369 191, 57. Total – R134 065.87 loss; 14.23
Expenses towards maintenance and repairs and service
R2 455 671.18.’
[20]
[11]
The Defendant raises two objections. The first objection is in
respect of the first amended particulars
of claim to the extent that
the Plaintiff’s rand claim of R4 7759 853, 99 is a different
debt to the debt claimed in the
initial particulars of claim in which
a US dollar amount was claimed and which debt arose during March
2020, more than three years
prior to the Plaintiff’s first
amendment (19 December 2016). The Defendant submits that the debt has
become extinguished
by prescription in terms of section 10(1), 11(d)
and 12(1)
[21]
of the
Prescription Act 68 of 1969
(“The
Prescription Act&rdquo
;).
[12]
The second objection relates to the second amended particulars of
claim (12 October 2018). The
Defendant submits that the alleged debt
owed by the Defendant in the amount of R6 449 374,33 is a
different debt to that
claimed in the initial and the first amended
particulars of claim which arose in March 2012, more than three years
prior to the
Plaintiff’s first amendment. That being so, the
debt has become extinguished by prescription, so the Defendant
submits. The
Defendant seeks the dismissal of the Plaintiff’s
claim, alternatively that the special plea be upheld with costs to
the extent
of the additional amount R1 689 520.94.
[13]
The central issue that I am required to determine is whether or not
the debt now being claimed
in the second amended particulars of claim
(12 October 2018) is the same or substantially the same debt that was
originally claimed
in the initial particulars of claim. If it is not,
then the debt now been claimed in the second amended particulars of
claim will
have been extinguished by prescription.
The applicable legal
principles
[14]
I have been referred to a number of judgements dealing with the
distinction and meaning of the
word ‘debt’ and the cause
of action.’ In the case of Sentrachem Ltd v Prinsloo
1997(2) SA 1 (SCA) the court
settles this distincytion. In Sentrachem
supra Prinsloo
sued Sentrachem for damages sustained in Prinsloo’s citrus
orchards. Prinsloo initially attempted to recover the damages
with a
claim formulated as a breach of contract. After a period of more than
three years, Prinsloo amended the particulars of claim
and introduced
an edictal claim. The Court rejected the special plea of prescription
raised and found that the Plaintiff was recovering
the same debt.
[15]
The facts in CGU Ins. Ltd v Rumdel (Pty) Ltd 2004(2) SA 622 (SCA) are
that the Plaintiff issued
summons against the Defendant for loss
caused by storm damage. The amount due was claimed in terms of a
single contract of insurance
contained in the particulars of claim.
The plaintiff gave notice to amend the particulars of claim in two
respects. Firstly,
to include an allegation that the Defendant
is liable to indemnify it in terms of two contracts. Secondly, to
convert the rand
currency to US dollar currency. The amendment to
include the new contract was granted, but the conversion was refused.
Leave to
appeal was only sought on the basis of the inclusion of the
second contract. On appeal the portion of the amendment where leave
was granted was dismissed. The Supreme Court goes on to mention in a
single sentence without any reasons provided that the conversion
from
rands to US dollars was not allowed. We cannot speculate what
the reasons of the Court was. It could very well have
been a term
contained in the agreement before the Court. The Defendant rightly
did not seek to rely on CGU
supra
in so far as the issue of
the conversion of currency in this case. In Sentrachem
supra
the court held that:
‘
. . .
[5] In my
view, this argument must fail. It commences with the
sound premise
that an amendment is permissible provided that
the
debt which is claimed in the amendment is the same or substantially
the same debt as originally claimed . . . (my underlining)
[6]
. . . The debt is not the set of material facts. This Court has,
furthermore, recently
considered the meaning of the word ‘debt’
in the
Prescription Act on
a number of occasions. In Drennan Maud &
Partners v Pennington Town Board Harms JA AGAIN emphasised that
‘debt’
does not mean cause of action’, and
indicated that the kind of scrutiny to which a cause of action is
subjected in an exception
is inappropriate is appropriate when
examining the alleged debt for purposes of prescription. In Provinsie
van die Vrystaat v Williams
NO Olivier JA warned against the danger
of being misled by cases which fail to distinguish properly between
the debt and the cause
of action upon which it is based. See also
Sentrachem Ltd case
supra
and Associated Paint & Chemical
Industries (Pty) Ltd t/a Albestra Paint and lacquers v Smit (supra).
[7]
When a court is called upon to decide whether a summons interrupts
prescription it
is necessary to compare the allegations and relief
claimed in the summons with the allegations and the relief claimed in
the amendment
to see if the debt is substantially the same. ..’
[16]
In Deez Realtors CCT/A Firzt Realty Company and Others v South
African Securitisation Program
(Pty) Ltd and Others (175/2016)[2016]
ZASCA 194(2 December 2016) the court held:
‘
[11]
Counsel were agreed that in order to determine whether the debt
sought to be recovered by the plaintiffs
prior to and post the
amendment is substantially the same, it is necessary to compare the
allegations and relief claimed in both
instances.
[20]
As I see it, this appeal raises the fundamental question whether the
debt in the amended claim
is the same or substantially the same debt
as originally claimed by the plaintiffs. If it is, the appeal must
fail. But if it is
not, then the appeal must succeed . . .
[33]
To my mind, the contentions advanced by the defendants are
unsustainable. They manifest a misconception
of the concept of a
‘debt’ within the meaning of
s 10(1)
of the
Prescription
Act. This
court has repeatedly emphasized that the
word ‘debt’
bears a ‘wide and general meaning’
and that it ‘does
not have the technical
meaning given to the phrase “cause of
action
” when used in the context of the pleadings.’
In Evans v Shield Insurance Co Ltd
1980 (2) SA 814(A)
at 825 F-G ,
Trollip JA was at pains to explain the distinction between a
‘debt’ on the one hand and ‘
cause of action’
on the other in these terms. (my underlining)
‘
Cause
of action” is ordinarily used to describe the factual basis,
the set of material facts, that begets the plaintiff’s
legal
right of action and, complimentarily, the defendant’s “debt”,
the word used in the
Prescription Act.’
[34
]
This meaning of ‘debt’ was, most recently, elaborated
upon by the Constitutional Court
in Makate v Vodacom Ltd
[2016] ZACC
13
; 2016(4) SA 121(CC) which
reference to the New
Shorter Oxford English dictionary, 3ed (1993) vol 1 at 604,said (para
85):
‘
1.
Something owed or due; something (as money, goods or service) which
one person is under an obligation to pay or render to another.
2. A
liability or obligation to pay or render something; the condition of
being so obligated.’
[35]
In my view the effect of the amendment of the plaintiffs claim
was meant to cure a defective
cause of action (namely, mistakenly
claiming accelerated rentals when they had already cancelled the
contract) by introducing the
correct cause of action for liquidated
damages pursuant to the election that they had exercised . The nature
of the debt claimed
remained the same. In substance, the remedies
provided for in clause 14.1 both sought to place the plaintiffs in
the position in
which they would have been, had the breach not
intervened. Hence they gave rise to a single debt. As emphasised by
this Court in
CGU Insurance, ‘the debt is not the set of
material facts’ required to sustain the cause of action but
rather ‘that
which is begotten by the set of material facts.’”
[17]
In my view the cases relied on by the Defendant
does not assist the Defendant’s case in particular
Deez
supra.
In Deez
supra
the
amendment replaced the claim for accelerated payment of the remaining
instalments with a damages claim. The court even though there
is a
difference in the two claims it remained a claim for the same debt.
In Aeornexis (Pty) Ltd v Firstrand (249/2011ZASCA 21 (17March
2011),
the Supreme Court of Appeal concluded that after the amendment the
claim was substantially seeking the same relief which
was for
services rendered and for goods sold and delivered. The appeal
was upheld and the special plea was dismissed.
[18]
Pertinently in Evans v Shield Insurance Company Ltd 1980(2) SA 814
(A) at 836 C-E, the court
held:
‘
Where
the Plaintiff seeks by way of amendment to augment his claim for
damages, he will be precluded from doing so by prescription
if the
new is based upon a new cause of action and the relevant prescriptive
period has run, but not if it was a new cause of action
and the
relevant prescriptive period has run, but not if it was part and
parcel of the original cause of action and merely represents
a
fresh
quantification of the original cause of action
and merely of the original claim or
the
addition of a further item of damages
.’(my
underlining).
[19]
I turn now to analyse the initial, first and second amendments, the
findings of Wepener J and
the agreement which is the foundation of
the claim for the purposes of this judgment. Pertinently
whether the
amendments introduce a new debt and whether such debt has
prescribed. The heading in clause 8 of the agreement makes it clear
that
clause 8 expressly deals with the rental of the
aircraft, in other words what the Defendant must pay the Plaintiff
over 11.25 months (term of the lease).
[20]
It is the Defendant’s case and which it strongly argued that
the first amended particulars
of claim (19 December 2016) where
the Plaintiff replaced the amount expressed in US dollars to an
amount in South African
rands is impermissible in light of
prayers 8.4 and 8.4.1 of the agreement.
[22]
The
Defendant further submits that the reason for the amendment was
because the Plaintiff realised that it could not claim a dollar
amount and more specifically the Plaintiff did not rely on clause 8.4
and 8.4.1 of the agreement. Prescription would start to run
from 22
March 2012.
[21]
The Defendant places sole reliance on clause 8.4 of the agreement. No
reference is made to either
clause 8.1 and 8.2 of the agreement. Both
Plaintiff an1 Defendant’s payment obligations are set out in
clause 8.1 and 8.2.
The Defendant submits that the foundation of the
Plaintiff’s amendment can be found in clause 8.4. The Plaintiff
submits
that clause 8.4 is merely the methodology on how to calculate
the claim and the conversion from US dollars to South African rands.
I agree. Simply put even though pricing is done in dollar currency
payments must be in rands.
[22]
The Plaintiff correctly submits that if payment must be made in
rands, it does not suddenly create
a different debt. The debt remains
the same. Payment in rands does not change the nature of the claim
which is and has all along
been the obligation pay rental which is
the debt.
[23]
Paragraphs 14.1 is the same in all three sets of particulars of claim
(initial, 19 December 2016
and 12 October 2018). The terms of the
contract are extensively pleaded in paragraph 5.7 of the particulars
of claim and refers
to clause 8.1.1 of the agreement.
[24]
The nature of the claim has been determined by Wepener J in his
judgment to the extent that the
claim is not for consequential
damages but is one for direct damages because of the cancellation of
the agreement. The direct loss
is failure to pay the rent in terms of
the agreement. The quantum in US dollars is for R 519, 187 ,50. It is
incorrect to say that
the first amended claim has been increased. In
fact, the Plaintiff made certain deductions because the aircraft was
not utilised.
Prayer (a) of the initial particulars of claim claimed
either in US dollars or South African rands. The Plaintiff did not
confine
the claim to a dollar currency. The defendant submitted that
the reason for the first amendment is because the Plaintiff would
have been non suited. I disagree. There was nothing stopping the
Plaintiff at the hearing of the matter to do the conversion.
[25]
Turning to the first amended particulars of claim. The question to be
answered, is it a new debt
or the same debt. The allegations, the
names of the parties, the contract, the damages are the same in the
initial particulars
of claim. The first amendment remains the same
debt and 8.4 only deals with the methodology. Furthermore, all that
the amendment
amounts to is a fresh quantification.
[26]
Turning to the second amended particulars of claim (12 October 2018).
It is based on the same
agreement, the same terms and the same
allegations. Paragraph 8 is a mirror image of the initial and the
first amended particulars.
Paragraph 13 is the same damages. In
paragraph 14 the Plaintiff seeks R 6 497 374, 00, not R4 7
59 853, 39. The
question again to be answered is whether or not
it is a new debt. Paragraph 14 of the second amended particulars of
claim is the
same as the initial and the first amended particulars of
claim. The figures in paragraph 14.2 in the second amended
particulars
of claim differ from those in the initial and first
amended particulars of claim.
[27]
In my view the different figures do not create a new debt. The claim
remains a claim for damages
as a result of the failure to pay the
rental. There is no merit in the special plea of prescription and
should fail.
[28]
In the result I make the following order:
28.1 The
special plea of prescription is dismissed.
28.2
The Defendant is ordered to pay the Plaintiff’s
costs, including the costs consequent upon the employment
of senior
counsel
Carelse Z.
Judge
of the High Court, Johannesburg
Counsel for the
Applicant : Adv SJ Becker SC
Instructed
by: Brigit Cronau Attorneys
Counsel for the
Respondent: Adv L Hollander
Instructed
by: Naude, Sisulu and Hood Inc.
Date
of Hearing: 18 May 2020
Date of Judgment: 4
September 2020
[1]
Clause
1.1 of the agreement
[2]
Clause
1.4 of the agreement
[3]
Clause
8.1.1 of the agreement
[4]
Clause
8.1.1 of the agreement
[5]
Clause
8.2 of the agreement
[6]
Clause
8.2 of the agreement
[7]
Clause
8.2 of the agreement
[8]
Clause
8.3 of the agreement
[9]
Clause
8.4.1
[10]
para
13 of the particulars of claim -22 March 2012
[11]
para
13 “ “ “
[12]
para
14 “ “ “
[13]
Prayer
(a) initial particulars of claim- 22 march 2012
[14]
See
para 3.5.3 above
[15]
11.4
of the agreement: The parties shall be exempt from and no Party
shall be liable under any circumstances for any direct, special
or
consequential damages of any nature or any loss of profit loss . . .
[16]
para
14 , 14.1 and 14.2 in the initial particulars of claim 22 March
2012.
[17]
Para
14.1 of the first amended particulars of claim
[18]
Para
14.2 “ “ “
[19]
First
amendment para 14, 14.1 14.2
[20]
Para
14.2; 14.2.1; 14.2.2; 14.2.3.
[21]
“
10
Extinction of debts by prescription
(1)
Subject to the provisions of this Chapter
and of Chapter 1V, a debt shall be extinguished by prescription
after the lapse of the
period which in terms of the relevant law
applies in respect of the prescription of such debt.
11 Periods of
prescription of debts shall be the following:
. . .
(d)
save where an Act of Parliament provides otherwise, three years in
respect of any debt.
12
When prescription begins to run
(1)
Subject to the provisions of
subsections (2), (3), and (4), prescription shall commence to run as
soon as the debt is due. . .’
[22]
See
para 3 footnote 9