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[2011] ZASCA 21
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Aeronexus (Pty) Ltd v Firstrand Bank Ltd t/a Wesbank (249/2010) [2011] ZASCA 21 (17 March 2011)
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THE SUPREME COURT OF APPEAL OF
SOUTH AFRICA
JUDGMENT
Case No: 249/2010
In the matter
between:
AERONEXUS (PTY)
LIMITED
......................................................
Appellant
and
FIRSTRAND
BANK LIMITED T/A WESBANK
.......................
Respondent
Neutral citation: Aeronexus v
Firstrand Bank Limited
(249/2010)
[2011] ZASCA 21
(17 MARCH 2011)
Coram:
LEWIS, MAYA and
SERITI JJA
Heard:
28 FEBRUARY 2011
Delivered:
17 MARCH 2011
Summary:
Prescription –
Extinctive prescription – meaning of ‘debt’ in
s
15(1)
of the
Prescription Act 68 of 1969
– whether debt
recognisable from original summons.
ORDER
On appeal from:
South Gauteng High Court, Johannesburg (Beasley AJ sitting as court
of first instance):
1 The appeal
succeeds with costs.
2 The order of the
court below is set aside and replaced with the following:
‘
The
defendant’s special plea of prescription is dismissed with
costs and judgment is granted in favour of the plaintiff for
–
payment in the sum
of R1 959 240.30 together with interest thereon at the rate of 15.5
per cent per annum, as from 20 August 2009
to date of payment; and
the costs of the
action.’
JUDGMENT
MAYA JA: (Lewis and
Seriti JJA concurring)
[1] This appeal
concerns the question whether or not the claim of the appellant,
Aeronexus (Pty) Ltd (Aeronexus), against the respondent
(the bank)
became prescribed under the
Prescription Act 68 of 1969
.
[2] Aeronexus
carries on the business of maintenance and repair of aircraft. During
July 2001, it concluded a written agreement
(the agreement) with a
customer, Million Air Charter Ltd (Million Air), to conduct work on
certain aircraft owned by the bank.
The agreement commenced on 1 June
2001 and would continue for a period of 12 months whereafter it would
endure indefinitely until
terminated by either party upon written
notice.
[3]
As at 29 February 2004, Million Air (which was subsequently placed in
liquidation) owed Aeronexus a sum of R1 916 395.56 for
services
rendered under the agreement, which it was unable to pay. Aeronexus
held liens over the aircraft under the agreement.
1
In
the exercise of its liens, Aeronexus retained control and possession
of the aircraft’s logbooks.
[4] To secure the
release of the aircraft the bank, on 12 March 2004, issued to
Aeronexus a bank guarantee in the following terms:
‘
At the
instance of WesBank, a division of FirstRand Bank Limited of Bank
City, Block E, 9 Kerk Street, Johannesburg, we advise that
we hold at
your disposal an amount of R1 959 240,30 … which amount or any
lesser amount will be paid to you on the terms
and conditions
stipulated herebelow:-
On the successful conclusion of
an action to be instituted by you against WesBank ... in respect of
your liens relating to a certain
Boeing 727-100 aircraft with
registration number ZS-IJF and serial number 18444, a certain
McDonnell Douglas DC-932 aircraft with
registration number ZS-OLN and
a serial number 47218 and a certain Pratt & Whitney JT8D-15
engine with engine number 700189.
This guarantee is irrevocable and
neither negotiable nor transferable, and must be returned to us
against payment.’
Aeronexus
consequently released the logbooks to the bank.
[5] On 30 April
2004, Aeronexus issued a simple summons (the original summons)
against the bank in which it claimed from the latter
‘
Payment
in the sum/balance of R1 959 240.30 in respect of services rendered
and goods sold and delivered during the period of 31
March 2003 to 29
February 2004, which amount is currently due and payable and which
amount the Defendant, notwithstanding demand,
failed and/or refused
to pay.’
[6] The bank
promptly delivered its notice of intention to defend the action on 12
May 2004. Almost three years later, on 18 January
2007, Aeronexus
filed a declaration in which it fully set out the facts underlying
its claim and specifically pleaded its reliance
on the guarantee
therefor, albeit for a somewhat lesser amount. This elicited an
exception from the bank in terms of Uniform
Rule 23(1)
averring that
Aeronexus was not entitled to sue it on the basis of the alleged
debtor and creditor lien. But nothing turns on this
objection as it
was subsequently abandoned. However, on 26 March 2007, the bank noted
yet another exception which was formulated
on a different basis. It
now averred that the declaration, which relied on a ‘bank
guarantee issued … pursuant to
a lien exercised ... against a
third party’, was vague and embarrassing and that its
allegations differed materially from
those set out in the summons
which relied on a debt ‘in respect of services rendered and
goods sold and delivered’.
[7] In response,
Aeronexus gave notice of its intention to amend its summons to claim
‘
Payment
in an amount of R1 959 240,30 which is overdue and payable in respect
of services rendered and goods sold and delivered
by [Aeronexus] to
and/or on behalf of … [Million Air] during the period 31 March
– 29 February 2004, which resulted
in [Aeronexus] acquiring and
exercising a lien over certain Boeing 727-100 aircraft, Registration
No. ZS-IJF (serial number 18444)
and aircraft McDonnell Douglas
DC-932, Registration No. ZS-OLN (serial number 47218) and certain
Pratt & Whitney JT8D-15 engine
(engine number 700189). The
[bank’s] liability in respect of such amount arises by virtue
of [its] written undertaking .
. . ’.
[8] Although the
bank delivered a notice of objection to the proposed amendment on the
ground that it sought to introduce a new
cause of action, namely a
claim based on a lien and written undertaking which had prescribed on
11 March 2007, the objection was
not pursued. Instead, a plea was
filed. This pleading incorporated a special plea in which the bank
raised the defence of prescription
based on an allegation that the
debt claimed in the amended summons was not the same or substantially
the same debt claimed in
the original summons such that the original
summons failed to interrupt prescription in respect of the amended
claim.
[9] By agreement
between the parties, no evidence was led at the trial proceedings and
the matter was decided on the basis of the
special plea. The South
Gauteng High Court (per Beasley AJ) found that the bank’s
liability arose not from the debtor and
creditor relationship alleged
in the original summons but wholly from the guarantee, which was an
undertaking to pay the relevant
amount upon proof of the legality of
Aeronexus’ liens. The court found further that the
‘prescriptive period of three
years ... applie[s] to the
written guarantee and not to the contract of goods sold and
delivered’ and that the amended claim
which was not
recognisable in the original summons, was filed beyond the period of
prescription. The court then concluded that
the latter pleading did
not interrupt prescription. The special plea was accordingly upheld
but the court subsequently granted
Aeronexus leave to appeal to this
court against its decision.
[10] The crisp issue
on appeal, as foreshadowed above, is whether the original summons
interrupted the running of prescription in
terms of
s 15
of the Act.
Central to this question is whether the debt claimed is recognisable
from the original summons.
[11] It was
contended on the bank’s behalf, in support of the judgment of
the court below, that the original summons did not
interrupt
prescription. This was so, the argument went, because the debt
claimed in the amended summons based on the guarantee
(which was
conditional upon Aeronexus instituting an action in respect of its
alleged liens) is not the same or substantially the
same as the debt
claimed in the original summons based on services rendered and goods
sold and delivered to which no reference
was made in the guarantee.
The debt flowing from services rendered and goods sold and delivered,
it was argued, did not arise against
the bank as there was never a
debtor and creditor relationship between the parties arising
therefrom. Thus, Aeronexus was precluded
by law from instituting an
action against the bank based on the debtor and creditor lien
envisaged in the agreement and any lien
it had against the bank would
be limited to a claim for necessary and useful expenses and only to
the extent that the bank was
enriched thereby.
[12]
In terms of
sections 10(1)
,
2
anc" HREF="#sdfootnote2sym">
2
11(d),
3
and
12(1)
4
of
the Act, a debt shall be extinguished by prescription after the lapse
of a term of three years after the date from which the
debt becomes
due.
Section 15(1)
provides:
‘
The
running of prescription shall, subject to the provisions of ss (2),
be interrupted by the service on the debtor of any process
whereby
the creditor claims payment of the debt.’
[13]
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.
5
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).
6
It
is therefore critical to guard against confusing a debt with the
cause of action which begets it.
7
[14]
The question whether a summons interrupts prescription requires a
comparison of the allegations and relief claimed in the summons
with
the allegations and relief claimed in the amendment to assess if the
debt is the same or substantially the same.
8
In
deciding whether prescription was interrupted by legal process –
a summons falls within the definition of ‘process’
set
out in
s 15(6)
of the Act – the right or debt sought to be
enforced by means of the amendment must be the same or substantially
the same
as that alleged in the original process: the substance
rather than the form of the original process must be considered.
9
[15]
There is no question that the original summons is defective. It
should, preferably, have made it clear that the bank was being
sued
on the basis of the undertaking it had given under the guarantee. The
amendment which introduced the guarantee therefore presented
a
different basis for the claim. But the attempt to clarify the claim
properly (which is what the amendment sought to do) is not,
in my
opinion, tantamount to the introduction of a new debt in the
circumstances of this case.
10
It
is well to bear in mind that ‘it is inaction, not legal
ineptitude, which the
Prescription Act is
designed to penalise’
11
and
that even an excipiable summons which does not set out a cause of
action can nevertheless serve to interrupt prescription as
long as it
is not so defective that it amounts to a nullity.
12
[16]
What was sought to be enforced in the original summons was payment of
a debt in the sum of R1 959 240.30 accruing originally
from ‘services
rendered and goods sold and delivered’ during 31 March 2003 to
29 February 2004. The same relief is
sought in the amendment. Apart
from the omission of the guarantee – which served as security
for payment in respect of the
selfsame ‘services rendered and
goods sold and delivered’ averred in the original summons –
I can discern no
inconsistency between the allegations made in the
unamended claim and those set out in the amended claim. A comparison
of the
facta
probanda
and
relief claimed in both pleadings rather shows that whilst portion of
the ‘allegations or “cause of action”
upon which
the relief claimed is based in the amendment differs from the
allegations or “cause of action” set out’
in the
original summons, ‘the relief claimed, ie the “debt”’
is substantially the same in the broad sense
of the meaning of the
word.
13
Although
flawed, the original summons nonetheless gave a general indication of
the claim sought to be enforced sufficient for the
bank to understand
the nature of the claim made against it. The special plea should
therefore have been dismissed.
[17] Finally, it was
argued on the bank’s behalf that in the event that the appeal
succeeded, Aeronexus would not be entitled
to interest from 12 March
2004 as claimed, but from the date on which the judgment of the court
below was delivered. This argument
was based on the guarantee’s
provision that Aeronexus would be entitled to payment upon the
successful conclusion of the
action it would institute against the
bank in respect of its liens. This, it was contended, showed that the
parties contemplated
that Aeronexus would first have to prove its
claim by way of litigation. I agree. The judgment of the court below
was delivered
on 20 August 2009 and that is the date from which
interest should run.
[18] In the result
the following order is made:
1 The appeal
succeeds with costs.
2 The order of the
court below is set aside and replaced with the following:
‘
The
defendant’s special plea of prescription is dismissed with
costs and judgment is granted in favour of the plaintiff for
–
payment in the sum
of R1 959 240.30 together with interest thereon at the rate of 15.5
per cent per annum, as from 20 August 2009
to date of payment; and
the costs of the
action.’
______________________
MML MAYA
JUDGE OF APPEAL
APPEARANCES:
For appellant: JJ
Brett SC
Instructed by:
Schindlers Attorneys, Johannesburg
Webbers Attorneys,
Bloemfontein
For respondent: CW
Jordaan SC with F Becker
Instructed by: Smit,
Jones and Pratt, Johannesburg
Symington & De
Kok, Bloemfontein
1
Clause
10.1 of the agreement provided:
‘
Aeronexus
shall have a lien over the Aircraft and any other property belonging
to Million Air which comes into Aeronexus’s
possession or
control for all amounts and liabilities whatsoever due or becoming
due to Aeronexus by Million Air, irrespective
of whether or not such
amount or liability is incurred as a consequence of Aeronexus so
being in possession of such aircraft
or property at that time.’
2
Section
10(1)
of the Act provides: ‘Subject to the provisions of this
chapter and of Chapter IV, 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.’
3
According
to
s 11(d)
of the Act, ‘save where an Act of Parliament
provides otherwise, [the period of prescription of debts shall] be
three years’.
. . .’
4
Section
12(1)
provides: ‘Subject to the provisions of subsections (2),
(3) and (4), prescription shall commence to run as soon as the debt
is due.’
5
Cape
Town Municipality and another v Allianz Insurance Co Ltd
1990
(1) SA 311
(C) at 330E-H;
CGU Insurance Ltd v Rumdel Construction
(Pty) Ltd
2004
(2) SA 622
(SCA) para 6.
6
Evins
v Shield Insurance Co Ltd
1980 (2) SA at 814 (A) at 825F-G;
Standard Bank of South Africa Ltd v Oneanate Investments (Pty)
Ltd (In Liquidation)
[1997] ZASCA 94
;
1998 (1) SA 811
(SCA) at 826J;
Drennan
Maud & Partners v Pennington Town Board
[1998] ZASCA 29
;
1998 (3) SA 200
(SCA) at 212F-G.
7
Sentrachem
Ltd v Prinsloo
1997 (2) SA 1
(A) at 15A-E;
Associated Paint &
Chemical Industries (Pty) Ltd t/a Albestra Paint and Lacquers v Smit
2000 (2) SA 789
(SCA) at 794.
8
Wavecrest
Sea Enterprises (Pty) Ltd v Elliot
1995
(4) SA 596
(SE) at 600H-J;
CGU
Insurance Ltd v Rumdel Construction
para
7;
Rustenberg
Platinum Mines v Industrial Maintenance Painting Services
[2009]
1 All SA 275
(SCA) para 19.
9
Neon
and Cold Cathode Illuminations (Pty) Ltd v Ephron
1978
(1) SA 463
(A) at 471A-B;
Associated
Paint
(supra)
para
15.
10
Trans-African
Insurance Co Ltd v Maluleka
1956 (2) SA 273
(A) at 279B-C;
Churchill v Standard General Insurance Co Ltd
1977 (1) SA 506
(A) at 517C;
Imprefed
(Pty) Ltd v National Transport Commission
1990 (3) SA 324
(T) at
329C-D.
11
Mazibuko
v Singer
1979 (3) SA 258
(W) at 266A.
See also the minority judgment of Trollip JA in
Evins
v Shield Insurance Co Ltd
1980 (2) SA
814
(A) at 825F-H.
12
Standard
Bank of SA v Oneanate Investment (Pty) Ltd (In Liquidation)
[1997] ZASCA 94
;
1998 (1) SA 811
(SCA) at 825H-I.
13
CGU
Insurance Limited v Rumdel Construction (Pty) Ltd
2004
(2) SA 622
(SCA) para 8. See also
Rustenberg
Platinum Mines v Industrial Maintenance Painting Services
[2009]
1 All SA 275
(SCA) para 19.