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[2024] ZAFSHC 63
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Tusk Construction Support Services (Pty) Ltd v Tokologo Local Municipality (628/2017) [2024] ZAFSHC 63 (29 February 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
YES/NO
Of
Interest to other Judges:
YES/NO
Circulate
to Magistrates: YES/NO
Case
no: 628/2017
In
the matter between:
TUSK
CONSTRUCTION SUPPORT
SERVICES
(PTY) LTD
Plaintiff
and
TOKOLOGO
LOCAL MUNICIPALITY
Defendant
CORAM:
VAN ZYL, J
HEARD
ON:
8 - 9 OCTOBER 2019; 10 AUGUST
2022;
29 - 30 AUGUST 2023
DELIVERED
ON:
29
FEBRUARY 2024
[1]
This is a claim for payment of two amounts, R800 000.00 and
R113 427.55,
together with interest and costs, based on a
cession
in securitatem debiti
executed by Thiza Construction
CC (now in liquidation) (“
Thiza
”) in favour of the
plaintiff.
[2]
The defendant pleaded,
inter alia,
prescription, a
pactum
de non cedendo
and various denials. However, after Mr Grobler,
who appeared on behalf of the defendant, closed the defendant`s case,
he indicated
that the defendant is no longer persisting with the
defence based upon an alleged pactum
de non cedendo.
[3]
The parties agreed that the special plea of prescription be
adjudicated together with
the other issues.
Background
and the Pleadings:
[4]
The plaintiff renders construction support services to emerging
contractors. It concluded
contracts with Thiza in relation to two
projects, one at Winburg and one at Hertzogville, in terms whereof
the plaintiff rendered
construction support services to Thiza and for
which the plaintiff obtained two judgments in this court, one for
R800 000.00,
dated 8 November 2011, and one for R113 427.55,
dated 24 January 2012. The obtaining of the judgments is not in
dispute.
[5]
On or about 2 July 2010 Thiza concluded a written session
in
securitatem debiti
(“t
he cession
”)
in
favour of the plaintiff in terms of which Thiza ceded all its rights
in and to any amount which may be due or become due to it
by any
person for any reason whatsoever to secure any amount due by Thiza to
the plaintiff. As indicated earlier, the conclusion
and the validity
of the cession is no longer in dispute.
[6]
The following disputes regarding the cession and the liability of the
defendant are
reflected in the pleadings:
1.
The plaintiff pleaded the following at paragraphs 8, 9 and 10 of its
particulars of claim:
“
8.
On or about 1 August 2012
the defendant, represented by its Municipal Manager Adv. L.M.A.
Mofokeng, in writing acknowledged the
aforesaid cession and the
defendant`s liability to make payment to the plaintiff in terms
thereof. A copy of the aforesaid acknowledgement
is attached hereto
as annexure “D”.
9.
At all relevant times the
defendant was aware of the aforesaid judgments, Thiza`s indebtedness
in terms thereof, and the cession
in favour of the plaintiff.
10.
The defendant was
indebted to Thiza in an amount which exceeds the plaintiff`s claims
in terms hereof.
11.
Despite demand, the
defendant has failed or refused to make payment to the plaintiff of
any amounts due.
12.
In the premises the
defendant is liable to make payment of the aforesaid sums to the
plaintiff.
2.
The defendant pleaded to the aforesaid paragraphs as follows:
“
5.
AD PARAGRAPH 8 THEREOF:
5.1 Except to
admit that a letter was sent on behalf of the Defendant on the 1
st
August 2012, the remainder of this paragraph is denied. Without
detracting from the above the Defendant pleads as follows:
5.1.1
The letter does not constitute an acknowledgement of the cession or
the Defendant`s liability to make
payment; and
5.1.2
At the finalization of the project no retention money was due to
Thiza Construction.”
6.
AD PARAGRAPH 9 THEREOF:
6.1 The
defendant denies each and every averment contained in this paragraph
and puts the plaintiff to the proof thereof.
7.
AD PARAGRAPHS 10, 11, 12 AND 13 THEREOF:
7.1 The
contents of these paragraphs are denied and the Plaintiff is put to
the proof thereof.”
[7]
In respect of the special plea of prescription, the following
averments are contained
in the pleadings:
1.
The defendant pleaded as follows at paragraph 1 of its plea:
“
1.
AD SPECIAL PLEA – PRESCRIPTION:
1.1 In
terms of the Plaintiff`s particulars of claim the claim would have
been due since
8 November 2011
and
24 January 2012
respectively.
1.2
Summons in this matter was served during
February
2017
, which is more than three years after
the date that the amount would have become due.
1.3 In
the premises the Plaintiff`s claim has become prescribed in terms of
Section 11
of
Act
68 of 1969
.”
2.
The plaintiff thereupon filed a replication in which it responded as
follows:
“
1.
The plaintiff admits that service of the summons on the defendant
took place during February 2017.
2.
All other averments therein contained are denied.
3.
More particularly, but without derogating from the generality of the
aforesaid denial, the plaintiff
pleads as follows:
a.
The plaintiff was unaware of any monies which became owing to or paid
by the defendant after 1 August
2012.
b.
The plaintiff, taking reasonable steps to ascertain the facts:
i.
On 19 September 2013 addressed a request for information in terms of
section 18(1) of the Promotion
of Access to Information Act, Act 2 of
2000, to the defendant, a copy of which is attached hereto as
annexure “R1”;
ii.
The defendant, in contravention of the provisions of the Act, failed
or refused to comply with
the request.
iii.
The plaintiff, thereafter, proceeded to apply for the liquidation of
the principal debtor, Thiza Construction
CC;
iv.
The plaintiff then applied for and was granted permission to conduct
an insolvency enquiry, and to that
end, caused a subpoena to be
issued inter alia, to Aurecon, the consulting engineer engaged by the
defendant in respect of the
project concerned.
v.
On 24 October 2016 the plaintiff received copies of payment
certificates 1 – 31, issued to the
defendant, and confirmation
regarding payments made by the defendant to Thiza, pursuant to the
aforesaid subpoenas.
c.
The plaintiff was, accordingly, unaware of the facts which gave rise
to its claim against the defendant,
before 24 October 2016, and could
not have known of those facts having exercised reasonable care.
4.
In the premises the plaintiff`s claim against the defendant has not
become prescribed.”
The
evidence:
[8]
Mr Ellis, who appeared on behalf of the plaintiff, presented the
evidence of two witnesses,
which evidence has been transcribed.
The defendant closed its case without presenting any evidence.
[9]
The first witness was Mr Werner Barnard, a civil engineer, employed
by Aurecon.
He was the overseeing engineer engaged by the
defendant in respect of certain water purification works in
Hertzogville, being one
of the projects which is the subject matter
of the contracts between Thiza and the defendant. He became
involved with the
project soon after it started, but was not involved
in the tender process or the conclusion of the contract between Thiza
and the
defendant. Mr Barnard prepared the payment certificates
showing the amounts due to Thiza by the defendant. Apart from
one telephone call from the plaintiff during the execution of the
contract, of which his recollection is vague, he did not have
contact
with the plaintiff. During the aforesaid telephone call, his
stance was that he would not disclose any information
about the
project to third parties such as the plaintiff.
[10]
At a later stage he was subpoenaed at the plaintiff’s behest to
testify in an insolvency
enquiry in respect of Thiza in November
2016. When he received the aforesaid subpoena, he co-operated by
sending a detailed letter
to the liquidators, dated 24 October 2016,
in which he tendered all the required information, as well as copies
of 31 payment certificates,
30 of which certificates were issued to
Thiza. Certificate 31 was issued, on the instructions of the
defendant, in favour
of another third party, Universal Mining and
Civil Contractors (Pty) Ltd, trading as Amanzi Projects. The
said certificate
therefore signified an indebtedness between the
defendant and Thiza, but which was certified for payment to a third
party.
[11]
Mr Barnard was unable to say whether any contract, whether in the
form of the General Conditions
of Contract (2004 edition), or in any
different format, was ever concluded between the defendant and
Thiza.
[12]
With regard to payment certificate 30, Mr Barnard testified that
retention money in the amount
of R967 600-05 was held back on
instruction of the defendant, which was used to pay four court orders
in two cases, which
were not the court orders against Thiza in favour
of the plaintiff. After payment of those court orders the
retention money
was, according to the said certificate and the
evidence of Mr Barnard, depleted.
[13]
In cross-examination Mr Barnard was referred to and testified about
certain parts of the contents
of the letter of 24 October 2016, which
he addressed to the liquidators in response to the subpoena he
received. In this regard
I deem it necessary to quote the paragraphs
from the letter which Mr Barnard was referred to during
cross-examination:
3.c.
The progress on site was very slow and after much effort the
Contractor’s termination was recommended
by Aurecon (formal
letter February 2012).
d.
Thiza Construction responded to the termination letter with an
implementation plan to finish
the contract and the Employer granted
them extension.
e.
The Contractor received a second letter (August 2012) of termination
for non-performance
and quality issues. The Contractor removed
items (plant and materials) from site as they indicated that they
have no funds
available to do remedial works.
f.
The Employer took to other resources in finishing the project.
The Employer requested
their own sub-contractors to assist and
obtained new quotations to finish the project.
g.
This implementation was finalized (November 2012) in that a
sub-contractor, Mr C Van Eeden
(Local Contractor) finished the
project under the support and control of the Employer.
h.
…
i.
Thiza Construction was supposed to finish the project within 8
months. After
30 months, Thiza Construction left and abandoned
the site. The Employer finished the project in March 2014 using
their own
resources.”
[14]
Mr Barnard testified in response to a question by Mr Grobler that
Thiza basically abandoned the
site during August 2012. When
asked whether that is the reason why Thiza did not become entitled to
the payment of the retention
money or anything else, Mr Barnard
confirmed same.
[15]
Mr Grobler referred Mr Barnard to payment certificate 30, dated 29
August 2013, and in which
Thiza Construction is indicated as the
contractor. It certified an amount of R34 503.02 payable
to Thiza. The
following cross-examination occurred with
reference to the said certificate:
“
MR
GROBLER
:
Okay, so this payment certificate was issued at the time …
where Thiza had already abandoned the site?
MR
BARNARD:
That is correct, like I say we have no documentation at that stage,
or any stage after the termination
recommendation, what I perceive
was that Thiza was still you know asking what is going on with the
project, etc. etc., but that
was the relationship between him and the
employer, and of course we wanted to finish a project we have our
scope and we have our
budget that was left, so these were the
payments that were certified by us, work done, currently like I say
Mr van Eeden that I
referred to in the letter….. he had no
company name or anything like that, I suppose he was trading either
under Thiza Construction
or the employer.
MR
GROBLER:
Alright, so that explains why … the heading payment
certificate no. 30 still records the contractor
as Thiza
Construction.
MR
BARNARD:
Yes.
MR
GROBLER:
But
your payment certificate should not be understood as referring that
this amount or whatever is therein
indicated is due to Thiza, because
they had abandoned site.
MR
BARNARD:
Like I say we did not have any documentation saying that a new
contractor was appointed or anything of
that case, so we kept on with
our documentation.”
[16]
The second witness for the plaintiff was Mr Jaco Roux. He is
the Legal Services Manager
of the plaintiff and has been in its
employment since 13 October 2010, some three months after the cession
agreement was concluded.
He is not involved in the operational
side of the business of the plaintiff, but became involved when legal
steps were taken against
Thiza.
[17]
He described the business of the plaintiff as “
construction
support services
”, which included the evaluation of
tenders, assistance in procurement of goods and services for emerging
contractors, the
arrangement of performance guarantees and bridging
finance.
[18]
Mr Roux confirmed the indebtedness of Thiza to the plaintiff in the
sum of R800 000.00 in
respect of the Hertzogville project and
R113 427.15 in respect of the Winburg project.
[19]
Mr Roux confirmed that he addressed two letters to the defendant’s
Municipal Manager, Mr
Mofokeng, wherein Mr Mofokeng was notified of
the existence of the cession agreement. In a letter of 26
October 2010 Mr Roux,
inter alia
, stated the following:
“
We
furthermore confirm that Thiza has ceded all its rights, title and
interest in every and any amount which is now owed to it or
which may
in future become owed to them by any person for any reason at all as
security for the payment by them for each and every
amount due by
Thiza to Tusk. A copy of the aforementioned cession is attached
hereto marked as annexure “A”.
We
confirm that the aforementioned cession is dated 2 July 2010.
We
hereby advise you formally of the aforementioned cession.
Please
note that in terms of the law of cession, you are from the date of
receipt of this letter to acknowledge the aforementioned
cession, as
well as being obliged to make all and any payments due to Thiza to
Tusk in its capacity as cessionary of all and any
amounts due to
Thiza.
Please
note that should you proceed to make any payments to the contractor
or any other cessionary that obtained a cession after
2 July 2010,
that Tusk will be entitled to hold you liable for such payment as
well.
Please
note that we URGENTLY require you to acknowledge receipt of this
document within 48 (forty-eight) hours from date of this
letter and
to confirm that you will act accordingly, in terms of this cession.”
[20]
In a letter of 22 November 2010. Again addressed to the Municipal
Manager, Mr Roux referred to
the letter dated 26 October 2010 and
confirmed that the plaintiff had not yet received a response.
Mr Roux recorded the bank
account details of the plaintiff and
further stated as follows:
“
WE
RECORD THAT, SHOULD THE MUNICIPALITY PROCEED WITH PAYMENT TO THE
CONTRACTOR DIRECTLY, TUSK WILL HOLD THE MUNICIPALITY LIABLE
FOR ALL
AND ANY DAMAGES SUFFERED AS A RESULT OF THE TOKOLOGO MUNICIPALITY
IGNORING OUR CESSION IN THIS REGARD
.”
[21]
The aforesaid notification did not elicit a response from the
defendant and the plaintiff then
instructed its attorneys, Coetzer &
Partners, to address a letter to the defendant, which they did on 16
February 2011.
In the said letter the Municipal Manager of the
defendant was again advised of the existence of the cession and the
fact that he
had not yet acknowledged receipt of the letters from the
plaintiff. The plaintiff’s attorneys further stated as
follows:
“…
it
may be that you are proceeding to make payments to Thiza despite the
knowledge that you have had of the cession since 26 October
2010.
We
shall be serving this letter by fax and sheriff and we shall also be
requesting copies of your financial records in terms of
the Access to
Information Act, 2000, indicating what payments, if any, were made to
Thiza in contravention of our client’s
cession.
If
you are in possession of a deed of cession that was lodged with you
by any creditor of Thiza that is dated prior to 26 October
2010, you
are requested to inform us of its existence and furnish us with a
copy thereof.”
[22]
The Municipal Manager responded on 9 March 2011 by inviting the
plaintiff to a round table conference
on 15 March 2011. The
plaintiff, through its attorneys, declined the invitation to a round
table conference, but requested
the defendant to make a proposal in
writing. The Municipal Manager then responded by means of a
letter dated 14 March 2011,
addressed to the plaintiff’s
attorneys, wherein he,
inter alia
, relied on an alleged
pactum
de non cetendo
, which is of no relevance anymore for purposes of
the adjudication of this matter. The Municipal Manager further
stated as
follows:
“
This
effectively means that the cession signed between your client and
Thiza Construction is of no force and effect insofar as Tokologo
Local Municipality is concerned and thus cannot be enforceable upon
the municipality and it is therefore rejected.
Take
notice that until there is a Court Order to the contrary, Tokologo
Local Municipality will continue to perform in terms of
the Contract
signed between itself and Thiza Construction.
Notwithstanding,
we note that your client’s claim and/or cession against Thiza
Construction is for the amount of R113 427-55.
We have to
advise that the above project is a MIG Multi Year project and funding
thereof is dependent on regular and uninterrupted
progress, bar for
natural forces and/or disasters beyond human control. We have
to emphasize that we cannot afford any delays
therefore of any
nature, hence we are willing to reserve the amount of R113 427-55
from future payments of Thiza Construction,
for a period of at least
three (3) months or so as to enable your client and Thiza
Construction to settle the matter at Court.
The reserving of
funds will ensure that should the Court Order favour your client in
this instance the said funds will be released
to them without delay.”
[23]
In a letter to the Municipal Manager, dated 22 September 2011, the
plaintiff’s attorneys
again referred to the pending litigation
between the plaintiff and Thiza in respect of the Winburg project and
sought confirmation
of the respondent`s earlier undertaking. No
response was forthcoming from the defendant.
[24]
During or about July 2012 the sheriff served a writ of execution in
respect of the judgment in
favour of the plaintiff regarding the
Winburg project on the defendant. On 31 July 2012 the
plaintiff’s attorneys wrote
a letter to the Municipal Manager
and provided him with the attorneys’ banking details. On
1 August 2012
the defendant addressed a letter to the sheriff,
Christiana, with reference to the judgment obtained in the Winburg
project and
stated as follows:
“
The
above matter as well as previous engagements between writer hereof
and your goodself pertaining to the above matter has reference.
We
undertake herewith to pay to yourselves all the money due to Tusk
Construction Support Services from the retention money that
will be
due to Thiza Construction at the completion of the project.
Please take note that the retention money is only paid
out a year
after the completion of the project.
”
(My emphasis)
[25]
On 28 February 2013 the plaintiff’s attorneys again wrote to
the defendant and reminded
it of the cession, the two outstanding
judgments and its undertaking to make payment to the sheriff in
favour of the plaintiff
of monies and retention due to Thiza by the
defendant. It was also stated that according to the instructions of
the plaintiff`s
attorneys, the project was due to be completed in the
coming two weeks. Similar letters were addressed by the plaintiff’s
attorneys to the defendant on 11 June 2013 and again on 2 July 2013.
In the last letter the following was stated by the plaintiff’s
attorneys:
“
We
hereby request, as a matter of urgency, that you provide us with an
undertaking that the said monies will be paid directly to
us, as well
as an indication as to when the retention monies will be payable.”
The
defendant failed to respond.
[26]
On 24 July 2013 the plaintiff’s attorneys addressed a letter to
Morobane Attorneys, who
represented the defendant at the time.
In the said letter the following was stated:
“
We
have obtained judgment against Thiza Construction CC and have already
duly attached any monies and retention due to them by Tokologo
Municipality by means of a writ of attachment under case number
1162/2011 from Bloemfontein High Court.
We
have been instructed by Mr Vusi from the Municipality that you are
acting on behalf of the Municipality in this matter.
Kindly
as a matter of urgency confirm when the monies due to Thiza
Construction CC will be paid to our client. The monies
due to
Thiza Construction CC are due to our client in terms of cessions
signed by Thiza Construction CC (these cessions have already
been
lodged on your client) as well as the attachment by the Sheriff.”
[27]
On 25 July 2013 Morobane Attorneys responded by relying on the
alleged
pactum de non cedendo
, which is of no consequence
anymore.
[28]
On 19 September 2013 the plaintiff commenced the process in terms of
the Promotion of Access
to Information Act, Act 2 of 2000 (“PAIA”)
to obtain information regarding the amount of payments to which Thiza
had
become entitled. The defendant failed or refused to comply
with the request. The plaintiff did not pursue an application
to court in terms of PAIA, but instead, decided to follow the process
of liquidation against Thiza. A liquidation application
was
lodged during January 2014 and a provisional liquidation order was
issued on 6 February 2014, which order was confirmed on
22 May 2014.
[29]
The plaintiff called upon the liquidators to convene an insolvency
enquiry and to subpoena Mr
Barnard, as also testified by Mr Barnard
himself. Prior to the date of the insolvency enquiry, Mr
Barnard delivered the letter
and the payment certificates referred to
earlier in the judgment and the insolvency enquiry was subsequently
not proceeded with.
The plaintiff received the last mentioned
information on 24 October 2016 and served summons on the defendant
during 28 February
2017.
[30]
With regard to the necessity to have held the insolvency enquiry Mr
Roux testified as follows:
“
WITNESS:
The purpose of the enquiry would have been to establish the nature of
any of the business of Thiza, whether there would be
any claims still
outstanding, any proceeds. Understandably Thiza was not giving
its co-operation and we were struggling to
get any information from
the municipality as well.
MR
GROBLER:
So I am
just going to ask you this question again. You said that after
Mr Barnard gave you this letter,
this two-page letter and he gave you
payment certificates 1 to 31 there was no need to proceed with the
enquiry?
WITNESS:
That is correct.
MR
GROBLER:
So
one can assume that having said, provided you with these documents
you knew what you wanted to know?
WITNESS:
That is correct.
MR
GROBLER:
The
purpose for which the enquiry had been convened had been served.
WITNESS:
That is correct.”
[31]
During further cross-examination Mr Roux was asked why it took more
than two years after the
final order of liquidation before the
insolvency enquiry was held. Mr Roux responded as follows:
“
I
remember there was a time lapse. We were struggling firstly to
get the response from the Master’s office and I am
not going
to, it is difficult to be specific regarding timelines, but it was a
struggle. In the end it was agreed that the
enquiry would be
convened in Sasolburg, which was the domiciled addressed of Thiza and
the surety and it was quite a struggle firstly
to get the Master to
agree and then all the logistics, etc. But to confirm how long
it actually took, that will be difficult
for me to state.”
[32]
Mr Roux also testified that when the defendant did not respond to the
process in terms of PAIA,
they had to take a decision whether to
pursue an application in terms of PAIA or whether to follow the route
of a liquidation application.
He testified that the application
in terms of PAIA would also have taken some time. Eventually
they decided to follow the
route of a liquidation.
The
cession:
[33]
A cession
in securitatem debiti
is described, in general
terms, as follows in
LAWSA
, Volume 3, at para 179:
“
Rights,
in common with other marketable assets, can be employed as objects of
security. In the same way that an owner can pledge
a corporeal
movable, a creditor of a right can by means of a cession
in
securitatem debiti
cede
it to his or her own creditor as security for the debt owed to the
latter until the debt so secured has been redeemed. In the
interim the cedent has no
locus
standi
to
deal with or enforce the right, while the cessionary, although
the only party entitled to performance, may not as a
rule
exercise all the powers of a
dominus
: he
or she ought not to recover performance nor alienate the
debt, but is only permitted to act on the claim if
the cedent
defaults, unless the parties have agreed, either expressly or
tacitly, that he or she may or must do so in the
meantime.”
[34]
If a debtor makes payment to the
cedent, whilst aware of the existence of the cession, its debt
towards the cessionary is not discharged.
In
LAWSA
,
Volume 3, at para 81 the position of the debtor is set out as
follows:
“
The
debtor now faces two parties: the cedent, as owner of the right, and
the cessionary, as its holder. The cedent is not as a rule entitled,
during the subsistence of the security, to recover or receive
performance of the principal debt; only the cessionary may do so. Yet
if the debtor does effect, say, payment to the cedent in ignorance of
the cession, the debt will be deemed to be discharged to
the
detriment of the cessionary who is left with a depleted
security.
Payment made by the debtor,
with knowledge of the cession, to the cessionary, is a regular
payment by a debtor to the true creditor
and will likewise release
the debtor
, to the detriment of the
cedent, who is left with only a personal claim against the
cessionary. And, if payment to the
cessionary releases the
debtor, so too should set-off as between the debtor and the
cessionary. Once the secured debt has
been repaid by the cedent
to the cessionary the cession
in
securitatem debiti
has fulfilled its
primary function and the right reverts to the cedent. The
erstwhile cessionary is no longer the true creditor,
but, if the
debtor who has been informed of the cession
in
securitatem debiti
but not of its
termination pays him or her, the debtor will enjoy immunity against
any further claim by the cedent. Conversely,
if the debtor,
having been informed of the redemption of the secured debt, insists
on paying the cessionary, such debtor does so
at his or her peril.”
(My emphasis)
[35]
When a debtor who is aware of a cession elects to make payment to the
cedent, the debtor is not
released of its obligation to make payment
to the cessionary. This principle was set out in
Goode, Durrant
& Murray (SA) Ltd v Glen and Wright, NNO
1961 (4) SA 617
(C) at 621 G – H:
“
What
was transferred to the applicant were rights of action against the
company's debtors. Once the debtors were informed of the
cession they
would be obliged to pay the cessionary and not the cedent.
The
cessionary would be entitled to institute action against any debtor
who failed to pay his debt, or, having knowledge of the
cession, paid
the cedent.
”
(My emphasis)
[36]
From the evidence it is evident that the defendant had been duly
informed and was aware of the
existence of the cession as early as 26
October 2010. The letter of 1 August 2012, which was referred to in
the pleadings, and
which was addressed by the Municipal Manager of
the defendant to the Sheriff, apparently as a result of the writ of
execution and
the attachment which followed the judgment in respect
of the Winburg project, serves, in my view, as further confirmation
of the
defendant’s knowledge and acknowledgement of the cession
and Thiza`s indebtedness to the plaintiff.
[37]
It is furthermore evident that payment certificates 4 to 30 were
issued to and in favour of Thiza
on dates after the defendant gained
knowledge of the cession. Those payment certificates signify debts
owing by the defendant to
Thiza which were and are subject to the
cession and are therefore due by the defendant to the plaintiff.
[38]
Payment certificates 4 to 30 stretch over the period of 23 November
2010 to August 2013. Mr Grobler
submitted that Thiza left and
abandoned the site during August 2012 already and that the subsequent
payment certificates, therefore,
do not constitute debts due by the
defendant to the plaintiff. In this regard Mr Grobler relied on the
evidence of Mr Barnard and
certain parts of the letter Mr Barnard
addressed to the liquidators, dated 24 October 2016. I dealt with
that evidence above. However,
what is also evident from the said
letter and which Mr Barnard was not referred to in cross-examination,
is that at paragraphs
3.h and the subsequent paragraph c. of the
letter it is stated that the Employer, hence the defendant, never
terminated the contract
with Thiza. When this is read with the
evidence of Mr Barnard that Thiza was still enquiring about the
project, that Mr Barnard
apparently does not know what the
relationship was between Thiza and the defendant at that stage, that
Mr Van Eeden was possibly
trading under the name of Thiza, that
Aurecon had no knowledge of or documentation indicating that a new
contractor had been appointed
and that he therefore continued issuing
the payment certificates in favour of Thiza, it is, in my view,
apparent, in the absence
of evidence to the contrary, that Thiza, in
some or other way, continued with the contract. Some of the payment
certificates in
Exhibit “A”, dated after August 2012,
were also still accompanied by tax invoices which reflect the logo of
Thiza and
were, on face value thereof, issued by Thiza to the
defendant. Furthermore, different to the case pleaded by the
defendant, there
indeed was retention money in favour of Thiza, but
it was depleted by the payment thereof to a third party.
[39]
In the circumstances and in the absence of evidence to the contrary,
payment certificates 4 to
30 indeed constitute debts due by the
defendant to Thiza, as already indicated earlier.
[40]
Mr Grobler submitted that in terms of the cession, the onus remained
upon Thiza to have collected
and receive the money from the
defendant, from which money Thiza itself would have paid the
plaintiff. He submitted that nothing
in the cession entitles the
plaintiff to claim those monies directly from the debtors. I cannot
agree with these submissions. As
correctly pointed out by Mr Ellis in
response to the said submissions, paragraph 5 of the cession
specifically determines that
once the said debtors were notified of
the cession, the entitlement of Thiza to collect the monies itself,
lapsed and the entitlement
became that of the plaintiff:
“
5.
Until any of my/our debtors … who owe me/us money
have
been notified
of
this cession, any money which I/we collect from such debtors will be
collected and received by me/us on behalf of Tusk. …
(My
emphasis)
I
have already found that the defendant had been so notified of the
cession by the plaintiff.
[41]
In the circumstances (subject to my finding regarding prescription),
the plaintiff is entitled to payment
from the defendant of the debts
of Thiza due to the plaintiff.
Prescription:
[42]
Section 12 of the Prescription Act, Act 68 of 1969 (“the Act”)
determines 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.
(2)
If
the debtor wilfully prevents the creditor from coming to know of the
existence of the debt, prescription shall not commence
to run until
the creditor becomes aware of the existence of the debt.
(3)
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.
[43]
The party who raises prescription must allege and prove the date of
inception of the period of prescription.
See
Gericke v
Sack
[1978] 2 All SA 111
(A), 1978 (1) SA 821 (A).
See also
Lancelot Stellenbosch Mountain Retreat (Pty) Ltd v
Gore NO and others
[2015] ZASCA 37.
[44]
Mr Grobler submitted that in this instance where it is clear from the
particulars of claim that the claim
had prescribed, the plea
contained in the replication has the result that the onus to prove
that the claim had not prescribed rests
upon the plaintiff. I have to
agree with this submission, considering the following
dictum
in
Absa Bank Beperk v De Villiers
2001 (1) SA 481
(SCA) at
487 A - C:
“
Na
my mening moet die antwoord gevind word aan die hand van
algemene beginsels. Waar dit duidelik is, sonder meer, dat
die verjaringstydperk verstryk het, het die verweerder 'n volkome
verweer: die eis is finaal uitgewis. Indien op stuiting van verjaring
of uitstel van die voltooiing van verjaring staatgemaak wil word, is
die posisie nie net dat die eiser sal moet begin nie. Indien
dit op
die getuienis van 'n besondere saak onseker is of stuiting, of die
gebeure waarna in art 13(1) verwys word, plaasgevind
het al dan
nie, sal die eis in daardie situasie noodwendig moet faal. Die
repliek wat deur so 'n eiser geopper word is dus 'n aparte
geskilpunt
ten opsigte waarvan daar 'n afsonderlike bewyslas (in die sin van die
algehele bewyslas) bestaan:
Pillay
v Krishna and Another
1946
AD 946
te 953. In die onderhawige saak het appellant dus die
bewyslas gedra om uitstel van voltooiing van verjaring ingevolge art
13(1)
(g)
te
bewys.”
[45]
Summons was served during February 2017.
[46]
I agree with the contention of Mr Ellis that the two dates mentioned
by the defendant in its plea, being
the dates on which judgments were
taken against Thiza, are insignificant for purposes of these
proceedings. It is not knowledge
of the debt of the cedent (Thiza)
that is required, but knowledge of the debt of the debtor (the
defendant).
[47]
In
Minister of Finance v Gore NO
2007 (1) SA 111
(SCA)
at para [19] it was held that prescription does not begin to run
until the plaintiff becomes aware of the minimum facts that
he or she
needs to prove to succeed in his or her claim. A suspicion is not
enough. I agree with Mr Ellis that one such minimum
fact is the debt
owed by the defendant to the plaintiff. In this instance that would
be when monies are payable by the defendant
to Thiza or when ceded
monies had been paid by the defendant to Thiza with knowledge of the
cession. As correctly described by
Mr Ellis in his heads of argument,
this fact was kept a closely guarded secret by the defendant until 1
August 2012 when the Municipal
Manager undertook to make payment from
the retention monies owed to Thiza a year after completion of the
contract. Had prescription
began to run earlier, the Municpal
Manager`s letter of 1 August 2012 constituted an acknowledgement of
debt which interrupted prescription
so that it started to run afresh.
[48]
Be that as it may, as a result of that undertaking and promise the
plaintiff was entitled to
wait until the project was finished. The
plaintiff, however, did not do nothing during that period, but
followed it up with three
letters form their attorneys to the
defendant enquiring when payment was going to be made. Thereafter it
was followed up with letter
letters from the plaintiff`s attorneys
addressed to the defendant`s attorneys, all to no avail.
[49]
The plaintiff consequently had no knowledge of any monies which
became owing to or paid by the
defendant after 1 August 2012.
[50]
The plaintiff subsequently commenced the process in terms of PAIA on
19 September 2013 in which
it,
inter alia,
sought copies of
all payment certificates and record of all payments made to Thiza,
also to no avail. It then followed the liquidation
route which led to
the proposed insolvency enquiry, the subpoena to Mr Barnard and
eventually the receipt of the payment certificates
on 24 October
2016. I agree with the submission of Mr Ellis that it was only then
that the plaintiff in possession of knowledge
of the facts it needed
to institute action. Summons was served within three years after 24
October 2016.
[51]
The plaintiff cannot be faulted for its decision to have taken the
liquidation route. It could
not have foreseen that it would take so
long for the insolvency enquiry to be arranged. Mr Roux explained the
delays that were
experienced. In the absence of evidence to the
contrary the delay cannot be considered to have been as a result of
negligent inaction
on the side of the plaintiff, as submitted by Mr
Grobler. See
Macleod v Kweyiya
2013 (6) SA 1
(SCA).
[52]
The plaintiff therefore proved that its claims had not prescribed.
[53]
The special plea of prescription must therefore be dismissed.
Conclusion
on the merits:
[54]
The plaintiff is consequently entitled to judgment in its favour.
Costs:
[55]
Mr Ellis submitted that the defendant should be ordered to pay all
the costs incurred in the
action as from 9 October 2019 and onwards.
In this regard he pointed out that on 8 October 2019, when the trial
commenced,
the plaintiff closed its case at the end of the first
day. The defendant applied for a postponement to the following
day
in order to find and call witnesses. Had the defendant then
closed its case, like he eventually did, the matter would have
been
finalized on 9 October 2019. According to Mr Ellis all further
costs were wasted and should therefore be borne by the
defendant,
irrespective of the outcome of the matter. Mr Ellis did however
refer to the fact that the defendant tendered
the wasted costs of 9
and 11 October 2019, which was already included in a previous costs
order. As for the costs of the
trial up to and including 9
October 2019, he submitted that there is no reason why costs should
not follow the event.
[56]
I cannot agree with the submissions of Mr Ellis with regard to the
costs beyond 9 October 2023.
[57]
With regard to the first tranche of the trial, which started on 8
October 2019, the plaintiff
has already been penalized for the wasted
costs of 9 and 11 October 2019. That leaves only the costs of 8
October 2019, which
costs, in my view, are to be costs in the cause.
[58]
With regard to the enrolment of the matter as a part heard trial for
10 and 12 August 2022, the
matter was enrolled without the parties
having contacted my secretary to ascertain whether I will be
available on the said dates
to deal with the trial. No arrangements
were made by the parties with my secretary. The
Judge-President, who allocates the
cases, was unaware that it is a
part heard matter and consequently allocated it to a different
judge. A criminal trial on
Circuit Court was allocated to me
for that week, with the result that I was out of town for the whole
week. The trial could
consequently not continue. Although
the plaintiff is
dominis litis,
also with regard to the
enrolment of the matter, the weekly rolls of this Division are
available at least 4 to 5 weeks ahead of
time. Had the
respective attorneys perused the rolls when it became available, it
would have been evident that the matter
could not be proceeded with
on the said dates. In the circumstances I deem it fair and
reasonable that the wasted costs of
that enrolment are to be costs in
the cause.
[59]
The matter was subsequently enrolled, in conjunction with my
secretary, to be heard on 29 and
30 August 2023. On 29 August
2023 I was requested that the matter stands down for argument to be
presented on 30 August 2023.
I conceded to the said request.
In my view the costs of 29 August 2023, if any, and 30 August 2023
are also to be costs in
the cause.
[60]
There is no reason why the costs should not follow the event and
consequently the costs of the
aforesaid days which are to be costs in
the cause are to be included in the costs to be paid by the
defendant.
[61]
Although the special plea of prescription was not separated from the
other issues, I will, for
the sake of clarity for taxation purposes,
specify that the costs thereof are part of the costs of the action.
ORDER:
[62]
I consequently make the following order:
1. The
special plea of prescription, is dismissed.
2.
The defendant is ordered to pay the plaintiff the amount of
R800 000.00.
3.
The defendant is ordered to pay interest on the aforesaid amount of
R800 000.00, calculated at the
rate of 15.5% per annum from 8
November 2011 to date of payment.
4.
The defendant is ordered to pay the plaintiff the amount of
R113 427.55.
5.
The defendant is ordered to pay interest on the aforesaid amount of
R113 427.55, calculated at the
rate of 15.5% per annum from 24
January 2012 to date of payment.
6.
The defendant is ordered to pay the costs of the action, including
the costs of senior counsel, and which
costs are to include, but
which are not restricted to:
6.1
The costs of the adjudication of the special plea;
6.2
The costs of 8 October 2019;
6.3
The wasted costs occasioned by the enrolment of the action for 10 and
12 August 2022; and
6.4
The costs of 29 October 2023, if any, and 30 October 2023.
C.
VAN ZYL, J
On
behalf of the plaintiff:
Adv.
P. Ellis SC
Instructed
by
:
Coetzer
& Partners
Pretoria
C/O
Honey Attorneys
BLOEMFONTEIN
Ref:
I27545/BM Jones/mj
On
behalf of the respondent:
Adv.
S. Grobler SC
Instructed
by:
Kruger
Venter Inc
BLOEMFONTEIN
Ref:
C Kruger/TB0008
reception@krugerventerinc.co.za