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[2013] ZASCA 28
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Macleod v Kweyiya (365/12) [2013] ZASCA 28; 2013 (6) SA 1 (SCA) (27 March 2013)
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THE SUPREME COURT OF
APPEAL OF SOUTH AFRICA
JUDGMENT
Case no
: 365/12
REPORTABLE
In the matter between:
CHARLES ROBERT MACLEOD
......................................................................
APPELLANT
and
BABALWA KWEYIYA
...................................................................................
RESPONDENT
Neutral
citation:
Macleod
v Kweyiya
(365/12)
[2013]
ZASCA
28
(27
March 2013)
Coram:
Mthiyane
DP, Tshiqi and Majiedt JJA and Plasket and Saldulker AJJA
Heard: 28 February
2013
Delivered: 27 March
2013
Summary:
Section 12(3)
of the
Prescription Act 68 of 1969
– constructive knowledge –
onus on the defendant to prove – no evidentiary burden on the
defendant to testify
unless prima facie case established – no
negative inference to be drawn from failure by the defendant to
testify –
s 12(3)
of the
Prescription Act seeks
to prevent not
innocent but negligent inaction.
______________________________________________________________________
ORDER
______________________________________________________________________
On appeal from:
Western Cape High Court, Cape Town (Gamble J sitting as a court
of first instance)
The appeal is dismissed
with costs.
______________________________________________________________________
JUDGMENT
______________________________________________________________________
TSHIQI JA (MTHIYANE
DP, MAJIEDT JA AND PLASKET AND SALDULKER AJJA CONCURRING):
The issue in this appeal
is whether the respondent’s claim for damages against the
appellant, has prescribed. On 30 January
1988, when she was
approximately four years old, the respondent sustained injuries and
was rendered a paraplegic in a motor vehicle
accident between two
motor vehicles, a Valiant, in which she was a passenger, and a
Toyota. The appellant is a practising
attorney who was
instructed by the respondent’s mother to institute a damages
claim in her personal capacity and in her
capacity as the
respondent’s guardian against the statutory insurers of the
two drivers. On 26 March 1993, the appellant
issued summons in the
Western Cape High Court, Cape Town claiming an amount of R25 000 in
respect of the Valiant, and an amount
of R870 220 in respect of
the Toyota.
On 18 March 1996 the
claim was partially settled and the settlement agreement was made an
order of court. In terms of that order
it was stated that an amount
of R25 000 had already been received from the statutory insurer
of the Valiant and that the
insurer of the Toyota agreed to pay 35
per cent of any damages the respondent’s mother could prove,
both in her personal
capacity and in her capacity as the
respondent’s guardian. The amount of R25 000 paid by the
insurer of the Valiant
would be taken into account when the damages
claim against the insurer of the Toyota was quantified. In February
1997, subsequent
to the order by the high court, the particulars in
respect of the unsettled claim were amended, thereby increasing the
claim
to an amount of R2.3 million. In May 1997, the claim was
settled at an amount of R99 500, which when added to the R25 000
amounted to R124 500. It is undisputed that the appellant was at all
times at that stage acting on the instructions of the mother
and
that she accepted the settlement amount.
On 5 March 1998, the
appellant wrote a letter to the respondent’s mother giving her
a detailed account reflecting that she
was entitled to receive an
amount of R14 000 in cash; that payment in the amount of R30 081.05
together with agent’s
fees in the amount of R27 337.90
was made for a house bought and registered in her name in
Khayelitsha; and that several
disbursements including experts’
and legal fees were also paid. The original title deed was enclosed.
At the bottom the
letter states: ‘… as you know, we had
some difficulty with the final settlement but our Counsel advised
that in
the circumstances it was a good settlement.’
At the time of the
settlement the respondent was approximately 13 years old, and almost
14 years old at the time the accounting
was made to her mother. On
29 April 2005, she reached the majority age of 21 years. In early
2006 the respondent visited the
offices of the appellant and was,
according to the appellant, ‘in quite a state’ because
she had been ‘kicked
out’ of the house by her mother and
wanted to know what she could do to get the house back. It is
uncontroverted that the
details of the claim were not discussed
during that meeting and that they were in any event not available as
the file had already
been archived. The appellant could also not
assist the respondent with the dispute because of conflict of
interest. She was instead
referred to the Legal Aid Board, was told
there was no more money payable to her and was promised that the
full documentation
would be sent to her by Ms Stroud, the
appellant’s candidate attorney. There may have been another
meeting between the
respondent and Ms Stroud after the first
meeting, but nothing turns on that. On 19 April 2006, Ms Stroud sent
an e-mail to the
respondent enclosing the court order, a letter from
the Road Accident Fund confirming the settlement amount paid, a
breakdown
of the payments made to the company that built the house
and the detailed account sent to her mother. It was suggested in the
letter that she should consult the Legal Aid Board and its telephone
numbers were furnished.
On 8 April 2009, when
she was almost 25 years old and 11 years after the appellant had
accounted to her mother, she caused a summons
to be issued against
the appellant in the Western Cape High Court, Cape Town. She alleged
that in settling the quantum of the
claim against the statutory
insurer of the Toyota, the appellant had acted negligently, in
breach of contract and duty of care.
She stated that the claim
should have been settled at an amount of about R2,1 million. She
quantified the monetary value of that
amount (at the time she issued
the summons), to be about R4,8 million less the settlement amount of
R124 500 and claimed
an amount of about R4,7 million. In her
particulars of claim she anticipated a possible plea of prescription
by stating that
she only became aware of the terms of the settlement
agreement when she received the e-mail from Ms Stroud on 19 April
2006.
She further alleged that she first consulted with her present
attorneys on 4 February 2009, and that it was only then that
she became aware that the appellant had acted negligently. She
contended that prescription only began to run from either of those
dates. In his plea the appellant denied knowledge of those facts and
also filed a special plea of prescription contending that
between
1997 (at the time the claim was settled with the RAF), 1998 (at the
time the final account was rendered to the respondent’s
mother), by at least April 2002 (when she was 18 years old) and by
April 2005 (at the time she attained the majority age of 21
years),
the respondent knew or could have reasonably known the identity of
the debtor and the facts on which her debt against
the appellant
arose.
During the hearing,
before Gamble J, the issue of prescription was separated by the
court and heard before the commencement
of the main trial in terms
of
rule 33(4)
of the Uniform rules. The appellant testified and also
led the evidence of Ms Stroud. The respondent did not testify and
closed
her case without calling any witnesses. The court concluded
that it had not been shown that the respondent could reasonably have
acquired knowledge of the facts material to her claim before
19 April 2006 and ruled that her claim had not prescribed.
The
special plea was consequently dismissed with costs. The appeal to
this court is with the leave of that court.
Two interrelated issues
arise in this appeal: (a) whether the respondent knew or could have
reasonably known the identity of the
debtor and the facts on which
her debt against the appellant arose before April 2006; and (b)
whether an adverse inference should
be drawn from the failure by the
respondent to give evidence about her state of mind, circumstances
or conduct during that period,
or at any stage prior to the service
of summons on 8 April 2009.
As to the first issue
the appellant contends that the plaintiff’s mother knew, or at
least could reasonably have known,
the facts relating to the alleged
debt, as well as the identity of the debtor in May 1997, when the
claim was settled or in March
1998 when the full account was
furnished to her. On that basis, the argument continues, it should
be inferred that there is at
least a prima facie case that the
respondent, who at all times lived with her mother, also had that
knowledge or could have reasonably
acquired it. In so far as further
information was needed, it could have been obtained from the
appellant who was at all times
accessible from 1996 onwards. The
contention by the appellant amounts to an assertion that the
respondent should have been suspicious
of her mother and the
appellant and that she should have demanded to know the details of
the settlement and should then have
been able to establish at that
stage if there was negligence on the part of the appellant. He
asserts that she would have been
in a position to sue him within one
year of turning 21 years old. The respondent, on the other hand,
submits that it was perfectly
innocent and reasonable for her, at
the age of twelve, when the settlement agreement was concluded, to
trust that her mother
and the appellant had acted in her best
interests. Once she reasonably formed that belief when she was
twelve, there was no reason
for her to alter that belief without new
evidence. There was no reason for her to actively search for
information implicating
her mother or the appellant. However, when
she, by chance, obtained information about the settlement on 19
April 2006, she sued
the appellant within three years.
Prescription
In terms of
s 11
(d)
read with
s 12(1)
of the
Prescription Act 68 of 1969
, civil debts prescribe three years from
the date the debt is due.
1
Section 12(3)
of the
Prescription Act, which
is at the heart of this matter, delays
prescription in certain circumstances. It reads:
‘
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:
Provided that a creditor shall be deemed to have such knowledge if he
could have acquired it by exercising reasonable
care.’
In order to successfully
invoke
s 12(3)
of the
Prescription Act, either
actual or constructive
knowledge must be proved.
2
Actual knowledge is
established if it can be shown that the creditor actually knew the
facts and the identity of the debtor. The
appellant places no
reliance on actual knowledge but on constructive knowledge.
Constructive knowledge is established if the creditor
could
reasonably have acquired knowledge of the identity of the debtor and
the facts on which the debt arises by exercising reasonable
care. The
test is what a reasonable person in his position would have done,
3
meaning that there is an
expectation to act reasonably and with the diligence of a reasonable
person. A creditor cannot simply sit
back and ‘by supine
inaction arbitrarily and at will postpone the commencement of
prescription’.
4
What is required is
merely the knowledge of the minimum facts that are necessary to
institute action and not all the evidence that
would ensure the
ability of the creditor to prove its case comfortably.
5
Evidentiary burden
This court has
repeatedly stated that a defendant bears the full evidentiary burden
to prove a plea of prescription, including
the date on which a
plaintiff obtained actual or constructive knowledge of the debt. The
burden shifts to the plaintiff only
if the defendant has established
a prima facie case.
In
Gericke
v Sack
1978 (1) SA 821
(A) 827D-E the court
stated:
‘…
it
will at times be difficult for a debtor who pleads prescription to
establish the date on which the creditor first learned his
identity
or, for that matter, when he learned the date on which the delict had
been committed.
But
that difficulty must not be exaggerated. It is a difficulty which
faces litigants in a variety of cases and may cause hardship
- but
hard cases, notoriously, do not make good law. It is not a principle
of our law that the
onus
of
proof of a fact lies on the party who has peculiar or intimate
knowledge or means of knowledge of that fact. The incidence of
the
burden of proof cannot be
altered
merely because the facts happen to be within the knowledge of the
other party. See
R.
v.
Cohen
,
1933
T.P.D. 128
. However, the Courts take cognizance of the handicap
under which a litigant may labour where facts are within the
exclusive knowledge
of his opponent and they have in consequence
held, as was pointed out by INNES J, in
Union
Government
(
Minister
of Railways
)
v.
Sykes
,
1913
A.D. 156
at p.
173
,
that
“
less
evidence will suffice to establish a
prima
facie
case
where the matter is peculiarly within the knowledge of the opposite
party than would under other circumstances be required”.’
But the fact that less
evidence may suffice does not alter the onus which rests on the
respondent in this case.
Bearing in mind the fact
that the appellant bore the onus, there is no basis, on the facts of
this matter, to conclude that it
was necessary for the respondent to
lead evidence in rebuttal. The facts are largely common cause. There
was nothing in the appellant’s
evidence that the respondent
needed to rebut. Equally, no
adverse inference
can be drawn from her failure to testify.
In her particulars of
claim the respondent alleged that she ‘first became aware of
the terms of the settlements on or about
19 April 2006’ when
the appellant’s candidate attorney e mailed certain
documents to her. She further alleged
that it was only on 4 February
2009, when she consulted her attorneys that she ‘first became
aware that the defendant had
acted negligently, or had possibly
acted negligently, in breach of contract and in breach of his duty
of care’. And she
also alleged that she ‘first had
knowledge of the facts from which the debt owing to her arises…on
4 February 2009
[the date of the consultation with her attorneys];
alternatively…on 19 April 2006 [the date on which she
received the
e-mail from Stroud]’. Her contention amounts to
this. She needed more than just the knowledge that her claim had
been settled
to be able to appreciate the alleged negligence. She at
least needed to appreciate that there was a substantial
under recovery.
That appreciation entailed not only knowledge
of the minimal facts of the claim but also an appreciation that
those facts afforded
her a claim against the appellant.
It is the negligent, and
not an innocent inaction that
s 12(3)
of the
Prescription Act seeks
to prevent and courts must consider what is
reasonable
with reference to the particular circumstances in which the
plaintiff found himself or herself. In
MEC
for Education, KwaZulu-Natal v Shange
2012
(5) SA 313
(SCA) para 11
this court had to
consider whether a 15 year old learner who had been hit with a belt
on the side of his eye by his teacher acted
reasonably in waiting
more than five years to institute action against the teacher’s
employer. As in the present matter,
the plaintiff became aware of
the possibility of a claim by chance. He had initially accepted the
teacher’s explanation
that it was an accident. A family friend
noticed that he was wearing an eye patch and suggested that he
should approach the Public
Protector. An advocate in that office
advised him of the possibility of a claim against the teacher.
Snyders JA held that the
delay was innocent, not negligent. She
stated:
‘
He was a
rural learner of whom it could not be expected to reasonably have had
the knowledge that not only the teacher was his debtor,
but more
importantly, that the appellant was a joint debtor. Only when he was
informed of this fact did he know the identity of
the appellant as
his debtor for the purposes of the provisions of
s 12(3)
of the
Prescription Act’
>
.
Similarly in this matter
the respondent visited the offices of the appellant merely because
she had a dispute with her mother
pertaining to the occupancy of the
house which had been bought with some of the money that had been
received as the settlement
amount. The visit did not concern the
details of the settlement amount. There is no suggestion that at
that stage she was concerned
about the quantum at all. The version
of the appellant confirms that there was no discussion pertaining to
the quantum of the
claim, the cost of the house and the amount given
to her mother. There is no basis to conclude that she should have
appreciated
that there was something wrong with the quantum of the
claim nor with any other aspect of the claim at that stage. More
importantly,
there is no basis to conclude that she must have
realised that there was an under-recovery nor that there was a
possible claim
for negligence against the appellant. She probably
believed, innocently, that the settlement amount was the best under
the circumstances.
It was not unreasonable of her to trust her
mother’s and the appellant’s judgment. In all
probability she thought
that they had acted in her best interests.
There is no conceivable
reason why that belief would change merely because she had attained
majority. The question is not whether
she could or could not have
obtained the documents from her mother or the appellant but rather
whether she was negligent or innocent
in failing to do so. There is
no basis to arrive at the conclusion that she was negligent. There
is also no basis to conclude
that once she turned 21, without any
intervening factor, she ought to have suddenly become suspicious or
eager to know the details
of the claim settled by her mother on her
behalf nor to have felt a sudden urge to investigate it. It is
logical that only some
new knowledge or event would displace that
belief. Counsel for the appellant has listed several factors which
he suggested cumulatively
required the respondent to explain the
delay. All those factors are in my view neutral. There is no basis
to conclude that she
should have appreciated earlier that she had a
claim against the appellant. It follows that prescription only began
to run on
19 April 2006. The respondent does not need to explain the
delays until 18 April 2009, as such period was within the three-year
prescription period.
Therefore, the second of
the two interrelated issues referred to in paragraph 7 above must be
decided in the respondent’s
favour. The appeal must
accordingly fail.
I make the following
order:
The appeal is dismissed
with costs.
_______________
Z L L TSHIQI
JUDGE OF APPEAL
APPEARANCES:
For Appellant: PBJ Farlam
Instructed by:
Norton Rose South Africa
(Incorporated as Deneys Reitz Inc), Cape Town
Webbers, Bloemfontein
For Respondent: SP
Rosenberg SC
Instructed by:
Malcolm Lyons &
Brivik Inc, Cape Town
Matsepes Inc,
Bloemfontein
1
In
order for the debt to be due under
s 12(1)
, it must be immediately
claimable (see
Deloitte Haskins & Sells Consultants (Pty) Ltd
v Bowthorpe Hellerman Deutsch (Pty) Ltd
[1990] ZASCA 136
;
1991 (1) SA 525
(A) at
532G-I), or in other words, the various components of the cause of
action should have fully accrued (see
Evins v
Shield Insurance Co
Ltd
1980 (2) SA 814
(A) at 838-839).
2
Gericke
v Sack
1978 (1) SA 821
(A) at 826A-827B.
3
Drennan
Maud & Partners v Pennington Town Board
[1998] ZASCA 29
;
1998 (3) SA 200
(SCA) at 209F-G.
4
Gunase
v Anirudh
2012 (2) SA 398
(SCA) paras 14-15;
Uitenhage
Municipality v Molloy
[1997] ZASCA 112
;
1998 (2) SA 735
(SCA) at 742A-C.
5
Van
Staden v Fourie
1989 (3) SA 200
(A) at 216B-F;
Nedcor Bank
Bpk v Regering van die Republiek van Suid Afrika
[2000] ZASCA 154
;
2001 (1) SA 987
(SCA) paras 11-13;
Yellow Star Properties 1020 (Pty) Ltd v MEC,
Department of Planning and Local Government, Gauteng
2009 (3) SA
577
(SCA) para 37;
Claasen v Bester
2012 (2) SA 404
(SCA)
paras 10-16.