Yellow Star Properties 1020 (Pty) Ltd v Department of Development Planning and Local Government (Gauteng) (549/2007) [2009] ZASCA 25; 2009 (3) SA 577 (SCA) ; [2009] 3 All SA 475 (SCA) (27 March 2009)

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Yellow Star Properties 1020 (Pty) Ltd v Department of Development Planning and Local Government (Gauteng) (549/2007) [2009] ZASCA 25; 2009 (3) SA 577 (SCA) ; [2009] 3 All SA 475 (SCA) (27 March 2009)

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THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
Case
No: 549/2007
YELLOW
STAR PROPERTIES 1020 (PTY) LIMITED
Appellant
and
MEC: DEPARTMENT OF
DEVELOPMENT PLANNING
AND
LOCAL GOVERNMENT (GAUTENG)
Respondent
Neutral
citation
:
Yellow Star
Properties v Department of Development Planning and Local Government
(549/07)
[2009] ZASCA 25
(27 March 2009)
Coram:
BRAND,
MAYA, CACHALIA, MHLANTLA JJA and LEACH AJA
Heard:
11
March 2009
Delivered: 27
March 2009
Updated:
Summary:
Contract – damages for breach – contract found to have been
invalid in previous litigation between the parties –
special plea
of
res judicata
or
issue estoppel upheld – further special plea that alternative
delictual claim had prescribed also upheld.
____________________________________________________________________________________
ORDER
In an application for leave to appeal from the High Court,
Johannesburg (Gildenhuys J sitting as court of first instance).
The
application is dismissed with costs, including the costs of two
counsel.
JUDGMENT
___________________________
__________________________________________
LEACH AJA
(BRAND, MAYA, CACHALIA and MHLANTLA JJA concurring):
[1] This is
an application for leave to appeal under s 21 of the Supreme Court
Act 59 of 1959. The applicant, the plaintiff in the
court below,
brought an action for damages to which the respondent, in pleading,
raised two special pleas. When the matter came
to trial before
Gildenhuys J in the Johannesburg High Court, it was agreed that the
special pleas be decided at the outset in the
light of the facts
contained in a so-called ‘stated case’ with the remaining issues
to stand over for later decision. Having
heard argument, the learned
judge upheld both special pleas and dismissed the applicant's claim.
He also dismissed a subsequent
application for leave to appeal. The
applicant’s further application to this court for leave to appeal
was set down for argument
before this court.
[2] The
merits of the appeal are obviously vital to the outcome of the
application. The parties therefore agreed to argue the
appeal on the
understanding that if this court was of the view that the appeal
should succeed, the application would be granted
and the appeal
upheld but, if the appeal was found to be without merit, the
application would be dismissed. I turn now to consider
which order
is appropriate.
[3] In
order to consider the validity of the special pleas, it is necessary
at the outset to set out the somewhat lengthy history
of the
litigation between the parties. At the heart of the dispute is a
certain piece of immovable property more fully described
as ‘the
remaining extent of Erf 137 Dunkeld West’ (‘the property’). The
respondent, labouring under the mistaken impression
that the property
vested in the Gauteng Provincial Government and wishing to dispose of
it, employed a valuer to ascertain what
it was likely to fetch on the
open market. The valuer employed valued it at R300 000. As appears
below, this valuation was way
off the mark. In June 2000 the
respondent put the property up for sale on a public auction at which
it was purchased by the applicant
for R452 900. The parties
thereafter signed a formal deed of sale which reflected the Gauteng
Provincial Government as the owner
and seller of the property and
which obliged the applicant to pay a deposit of R45 200, to provide a
bank guarantee for the balance
of the purchase price and to pay
various duties, levies and costs.
[4]
Despite the applicant having fully complied with all its obligations
under the deed of sale, transfer did not take place
as it was
discovered
that the property, while state land,
vested not in the Provincial Government as had
been thought but in the National Government.
Item
28(1) of Schedule 6 to the Constitution provides for a competent
authority to issue a certificate in respect of immovable
property
owned by the state indicating in which particular branch of
government such property is vested, whereupon a registrar
of deeds
must make such entries or endorsements necessary to register such
property in the name of that sphere of government.
In order for the
respondent to be able to effect transfer to the appellant, it had to
obtain an item 28(1) certificate recording
that the property vested
in the Gauteng Provincial Government. And in order to obtain such a
certificate, it was necessary for
the respondent to first persuade
National Government to transfer the property to the Gauteng
Provincial Government.
[5]
However, it then also came to light that the valuation of R300 000
obtained by the Provincial Government before the auction
was wholly
unrealistic, probably because the valuer had by mistake only had
regard to a portion of the property while the true
value of the whole
property was several million rand.
The
respondent does not appear to have been overly concerned by this as
it persisted in attempting to persuade national government
to allow
the property to be transferred to the applicant. But it is hardly
surprising that the Ministry of Public Works, to whom
administration
of the property had been assigned, on learning
that
the property had been sold for but a fraction of its true value,
refused to do so.
Accordingly, as National
Government refused to transfer the property to the Gauteng Provincial
Government,
the respondent could not obtain an
item 28(1) certificate relating to the property and was unable to
effect transfer to the applicant.
[6] When
despite the passage of time transfer did not take place, the
applicant
raised the matter with the respondent.
In response, in a letter from the head of Gauteng’s Department of
Development Planning
and Local Government dated 12 December 2000 the
applicant was informed that the property in fact vested in the
national Department
of Public Works and not in the provincial
government, and it was suggested that the applicant take the matter
up with the legal
section of the national department. It can be
accepted that until receipt of this letter the applicant did not know
that the respondent
was not the owner of the property. Despite the
applicant then consulting its attorney as well as a number of other
government officials,
it was unable to obtain transfer.
[7]
Eventually, in June 2001 the applicant launched proceedings in the
Pretoria High Court in case 15278/01 in which it cited
the present
respondent, as well as the Minister of Land Affairs and the registrar
of deeds, as respondents. In its founding affidavit
the applicant
described the delays which had taken place and stated that it had
established that if the Minister of Land Affairs
– as the competent
authority contemplated by item 28(1) – did not provide a
certificate under that item, the property could
not be registered in
the name of the Gauteng Provincial Government which was necessary for
transfer to the applicant to take
place.
It
therefore sought an order, inter alia:
‘
3. Compelling
the (Minister of Land Affairs) to issue a certificate in terms of
Item 28 of Annexure 6 to the Constitution, Act 108
of 1996, on an
urgent basis . . . and to provide the (registrar of deeds) with the
said certificate;
4. Compelling
the (registrar of deeds) to effect the transfer over the property as
a matter of urgency, upon receiving the certificate
from the
(Minister of Land Affairs).
’
[8]
When
the matter came before Van Der Walt J on 30 January 2002, both the
respondent and the Minister of Land Affairs argued that
the applicant
lacked
locus standi
,
contending that the individual who had concluded the sale, one
Harding, had represented not the applicant but a close corporation

still to be formed. They also argued that the parties had not been
ad
idem
in regard to the property that was the
subject of the sale. Both these contentions were rejected by the
learned judge, and it
has not been suggested that he erred in doing
so. During the course of the hearing a copy of a certificate issued
in respect of
the property by the Minister of Land Affairs under item
28(1), was handed to Van Der Walt J. In his view, this obviated the
need
to deal with the relief sought in the application before him. He
therefore merely granted an order which authorised the registrar
to
effect transfer upon receipt of ‘the certificate’ from the
Minister of Land Affairs.
[9] At
first blush, this is somewhat confusing. In making this order the
learned judge presumably had in mind that ‘the certificate’
would
facilitate transfer to the applicant (viz. It would be a certificate
reflecting the Provincial Government as the owner of
the property and
thereby entitled to transfer it to the applicant). But the document
handed in certified that the property vested
in the National
Government and, in itself, rather than providing the solution to the
problem, constituted the very obstacle to
the property being
transferred to the applicant. The solution to this conundrum is to be
found in Van Der Walt J’s subsequent
judgment of 31 July 2002
dismissing an application for leave to appeal brought by the Minister
of Land Affairs in which he expanded
on his reasons for judgment.
The learned judge said that while the certificate handed in had been
in the name of National Government,
it had been stated in the papers
that the Provincial Government was in the process of obtaining the
property from the National
Government to enable it effect transfer
to the applicant, and that the stage at which it could do so had
not been reached.
This observation clearly indicates that the
learned judge had not intended his order to authorise transfer
directly to the applicant
at that stage. It merely authorised the
registrar of deeds to do so when ‘the certificate’ reflecting the
provincial government
as owner came to hand.
[10]
Unfortunately for the applicant, no such certificate was ever issued
as the national government persisted in opposing transfer
of the
property to the applicant at a price which bore no relationship to
its true market value. As a result, the order of Van
Der Walt J in no
way overcame the difficulty facing the applicant. The national
government remained the owner of the property and
the respondent
remained unable to transfer it to the applicant. A position of
stalemate had therefore been reached.
[11]
The
applicant then heard rumours of the property being subdivided. This
news led to it bringing urgent proceedings in the Pretoria
High Court
in case 4578/2002, seeking an order restraining the respondent, as
well as the Minister of Land Affairs and the registrar
of deeds, from
effecting any subdivision of the property. It also claimed an order
directing the registrar of deeds to transfer
the property to it
within 48 hours and obliging the respondent to file all documents
necessary to facilitate such passing of transfer.
As the original
item 28(1) certificate produced at the earlier hearing had gone
missing, the applicant sought an order directing
the registrar of
deeds to be satisfied with a copy of it ‘for purposes of effecting
transfer’.
[12] It
seems both from the relief sought and from the comment in the
founding affidavit that once the item 28(1) certificate
had become
available the relief claimed in case 15278/2001 ‘became
superfluous… in order (to) pass transfer to the Applicant’,
that
the applicant still mistakenly regarded the certificate that had been
handed to Van Der Walt J as being all that was required
for the
respondent to pass transfer. However, the registrar of deeds drew the
court’s attention to the fact that the existing
item 28(1)
certificate recorded the property as vested in the national
government, and also observed that before transfer to the
applicant
could be effected, it would be necessary for the property to be
transferred from the national to the provincial government
so that
the latter could, in turn, transfer it to the applicant.
[13] The
Minister of Public Works then applied to intervene as a party to
oppose the relief sought. In doing so, she stated
that she had been
charged with the administration of the property, ownership of which
vested in national government as reflected
the item 28 certificate,
that such certificate did not result in the property vesting in the
provincial government, and that the
applicant was not entitled to
insist upon transfer. She also stated that as the responsible
minister of state, only she had the
discretion to sell the property,
a discretion which she had not yet exercised. But in any event, she
said she would probably not
agree to the property being transferred
to the applicant as it was worth several million rand more than the
amount the applicant
had undertaken to pay.
[14]
By
reason of certain allegations made in the papers and undertakings
given after the institution of the proceedings, the necessity
to seek
an interdict in regard to the proposed subdivision of the property
fell away. But the applicant persisted in claiming
transfer of the
property and the matter came to be argued before Smit J. Despite
opposition from the appellant, the learned judge
correctly allowed
the Minister of Public Works to intervene as an interested party.
She was, after all, the minister of state
charged with the
administration of the property and the only person who had the
authority to sell it.
[15]
In
proceeding to deal with the relief sought by the applicant, Smit J
concluded that while the Premier of Gauteng is authorised
under s 2
of the Gauteng Land Administration Act 11 of 1996 to dispose of
provincial land which vests in the Gauteng Provincial
Government, it
is the State President who under
s 2(1)
of the
State Land Disposal
Act 38 of 1961
has the power to dispose of land vesting in national
government. He also accepted the allegation made by Minister of
Public Works
that the State President had assigned that power to her,
and concluded that in the circumstances the provincial government had
not been authorised in law to sell the property; that the sale to the
applicant had therefore been
ultra vires
and void
ab initio
;
that there was accordingly no valid
causa
for the transfer of the property to the applicant; and that the
applicant was therefore not entitled to transfer of the property

which remained vested in the national government. The application
was accordingly dismissed.
[16]
The
applicant did not seek to appeal against this decision. Instead, in a
letter addressed by its attorney to the respondent on
30 August 2004,
it accused the respondent of having repudiated the sale by failing or
refusing to transfer the property, and stated
that it had decided to
accept such repudiation and that it thereby cancelled the agreement.
The attorney further demanded payment
of more than R6,8 million as
damages to be made within 30 days, failing which action would be
instituted.
[17]
In
the light of Smit J’s finding that the sale had been void at all
times, it is hardly surprising that the respondent refused
to make
the payment demanded and, in due course, the applicant instituted
action as it had threatened. In formulating its claim,
it relied on
the same breach of contract it had in the letter of 30 August 2004
(viz.
the failure or
refusal to transfer the property to the appellant). In the
alternative, it relied on a delictual claim, alleging
that the
respondent’s servants, in selling the property, had either been
aware that the respondent was not authorised in law
or in fact to
sell the property and had acted in bad faith; alternatively, that
they had acted negligently in that they ought to
have been aware that
the respondent was not so authorised to conclude the sale. As a
further alternative, the applicant averred
that the respondent had
maliciously or negligently failed to effect transfer in breach of Van
Der Walt J’s order of 30 January
2002.
[18] The
respondent pleaded specially to these claims as follows: first it
alleged that the action had been instituted on 29 October
2004, more
than three years after both the contractual and delictual claims
relied upon had arisen, and that they had consequently
prescribed
under
s 11
of the
Prescription Act 68 of 1969
; secondly, it pleaded
that:
(a) Smit J
had found that:
(i) the sale
had been void
ab initio
;
(ii) there
was accordingly no valid
causa
for the property to be transferred;
(iii)
transfer by the provincial government was therefore not legally
possible; and
(iv) in the
circumstances the provincial government could not be ordered to
transfer the property to the appellant;
(b) These
issues having been finally determined by Smit J, it was not open to
the appellant to raise them in its claim by reason
of
res
judicata
or ‘issue estoppel’.
(c) The
appellant was therefore estopped from alleging or relying on a breach
of the contract or Van der Walt J’s order or from
pursuing its main
claim founded in contract which was based on such alleged breaches.
[19] As
already mentioned, these special pleas were determined in the light
of the facts agreed in a stated case. Gildenhuys
J held in relation
to the second special plea that the appellant’s contractual claim
could not succeed as it was based on a contract
of sale that had been
found by Smit J to have been void
ab initio
,
that the appellant was bound by that finding on the basis of issue
estoppel or
res judicata
,
and that the repudiation of a contract void
ab
initio
could not support a claim for damages
arising from its repudiation. In regard to the first special plea,
the learned judge found
it unnecessary to make any ruling on whether
the claim in contract had prescribed as that claim was in any event
incompetent on
the basis of issue estoppel or
res
judicata.
However, he held
that the appellant’s claim in delict had
prescribed as more than three years had elapsed after the debt sued
upon had become due
before summons was issued. It is against these
findings that the applicant now seeks leave to appeal to this court.
[20] For
convenience, I intend to deal at the outset with the second special
plea and the finding in the court
a quo
the appellant’s claim could not succeed as the appellant was bound
by the previous finding of Smit J that the sale was invalid
ab
initio
. In regard to this issue, the
appellant contended that Van Der Walt J had held the contract of sale
to have been valid and enforceable,
and that such issue had therefore
been
res judicata
when
it came before Smit J whose findings were consequently not binding
and were to be regarded as no more than
obiter
.
[21] In
considering this argument, it is necessary to deal briefly with the
principles of
res judicata
and so-called ‘issue estoppel’ relied on by both sides. The
underlying ratio of the
exceptio rei judicatae
vel litis finitae
is
that where a cause of action has been
litigated to finality between the same parties on a previous
occasion, a subsequent attempt
by one party to proceed against the
other on the same cause of action should not be permitted. In
National Sorghum Breweries v International
Liquor Distributors
[2000] ZASCA 159
;
2001
(2) SA 232
(SCA) at 239 para [2] Olivier JA stated the requirements
for a successful reliance on the
exceptio
to
be as follows:
‘
The
requirements for a successful reliance on the
exceptio
were, and still are:
idem actor, idem reus,
eadem res
and
eadem
causa petendi
. This
means that the
exceptio
can be raised by a
defendant in a later suit against a plaintiff who is ‘demanding the
same thing on the same ground’ (
per
Steyn CJ in
African
Farms and Townships Ltd v Cape Town Municipality
1963
(2) SA 555
(A) at 562A); or which comes to the same thing, ‘on the
same cause for the same relief’ (
per
Van Winsen AJA in
Custom Credit
Corporation (Pty) Ltd v Shembe
1972
(3) SA 462
(A) at 472A-B; see also the discussion in
Kommissaris
van Binnelandse Inkomste v ABSA Bank Bpk
1995
(1) SA 653
(A) at 664C-E); or which also comes to the same thing,
whether the ‘same issue’ had been adjudicated upon (see
Horowitz
v Brock and others
1988
(2) SA 160
(A) at 179A-H).
’
[22] It
has been recognised though that the strict requirements of the
exceptio
, especially
those relating
to
eadem res
or
eadem
petendi causa
(the same relief and the same
cause of action), may be relaxed where appropriate. Where a defendant
raises as a defence that the
same parties are bound by a previous
judgment on the same issue (viz.
idem actor
and
eadem quaestio
),
it has become commonplace to refer to it as being a matter of
so-called ‘issue estoppel’. But that is merely a phrase of

convenience adopted from English law, the principles of which have
not been subsumed into our law,
1
and the defence remains one of
res judicata
.
Importantly when dealing with issue estoppel, it is necessary to
stress not only that the parties must be the same but that the
same
issue of fact or law which was an essential element of the judgment
on which reliance is placed must have arisen and must
be regarded as
having been determined in the earlier judgment.
[23]
Fundamental to the respondent’s opposition in case 4578/2002 was
the allegation that the sale was invalid as the necessary
statutory
authority to sell the property had vested solely in the Minister of
Public Works, a contention which Smit J upheld. The
appellant
accepted that if the decision of Smit J holding the sale to be
invalid was not
obiter
but was binding between the parties, the issue would have been
finally determined between the parties and the special plea that
this
issue was
res judicata
would
have been correctly upheld. The applicant’s case on this issue is
one of issue estoppel and stands or falls on whether,
by reason of
the earlier judgment in case15278/2001, the validity of the sale had
been finally determined between the parties by
Van Der Walt J and was
res judicata
when it
came before Smit J.
[24]
Counsel for the appellant argued that while the decision of Smit J
was probably correct, it was no bar to the appellant successfully

raising
res judicata
or
issue estoppel. In this regard, while the law indeed allows a party
to rely upon such a defence
even
if the original judgment was incorrect,
2
I have grave reservations about whether it is permissible to do so if
the effect will be to enforce a contract which is legally
invalid.
3
This would of course be the case if Smit J
was correct in concluding that, in law, only the Minister of Public
Works was authorised
to sell the property. But in the light of the
view I have of the matter, it is unnecessary to consider this any
further.
[25] The
applicant’s argument that the validity of the sale was
res
judicata
in case 4578/2002 faces
insurmountable difficulties. As appears from what I have already
said, in order for the applicant to succeed
on this issue the case
had to involve the same parties who had been in case 15278/2001 and
had to turn on the same issue that had
been finally determined in the
judgment of Van Der Walt J. For the reasons that follow, neither of
those two requirements were
fulfilled.
[26] The
obvious problem facing the applicant is that although it and the
respondent were parties to both proceedings, the Minister
of Public
Works, to whom the State President had assigned the power to
administer the property, was not a party in case 15278/2001
but,
pursuant to its successful application for leave to intervene, became
a party in case 4578/2002. On the other hand, the Minister
of Land
Affairs, who was a party in case 15278/2001 was not a party in case
4578/2002. Counsel for the applicant sought to overcome
this
difficulty by arguing that each minister had represented the national
government in whom ownership of the property vested
and which had
therefore effectively been the relevant party before court at both
hearings
[27] This
argument cannot be upheld. Section 91(2) of the Constitution provides
for the President to assign powers and functions
to ministers, and s
92(1) provides for ministers ‘to be responsible for the powers and
functions . . . assigned to them’. A
minister’s powers and
functions are always subject to constitutional control and the
doctrine of legality and ‘can be validly
exercised only if . . .
clearly sourced in law.’
4
In addition
s 2(1)
of the
State Liability Act 20 of 1957
provides
that any claim against the State may be brought against the minister
of ‘the department concerned’. This can only
mean that a claim
may be brought against the minister whose department is responsible
for the debt sought to be recovered (and
not against any other
minister) and that the affairs and functions of different departments
of state and their ministers are to
be regarded as separate and
distinct.
[28] While
the two different ministers whom the applicant sued in cases
15278/2001 and 4578/2002 are members of the same sphere
of
government, the President has assigned to them separate and distinct
powers and functions. Each can only exercise those powers
and
functions that were individually bestowed on her. They cannot act on
behalf of each other in performing a public function,
nor can one be
validly sued in circumstances in which the law authorises the
institution of proceedings against the other. Therefore
the Minister
of Public Works, who was not a party to the proceedings in case
15278/2001, cannot be bound by a decision on an issue
arising in that
case and the applicant has failed to establish the necessary
requirement of
idem actor
.
[29] The
applicant also faces difficulties in regard to the requirement of
eadem quaestio
. For purposes of
res
judicata
or issue estoppel, the relevant
issue must be one which the court is called upon to determine in its
judgment.
5
Where, as is here the case, the court is dealing with motion
proceedings, the issues which arise for determination are those
contained
in the parties’ affidavits and a court can only decide an
issue not raised in the papers if such issue has been fully canvassed

by the parties in the expectation that it will be determined as an
issue before court.
6
There is no suggestion of that having here been the case.
[30]
Bearing that in mind, the issues arising and the relief sought in
case 15278/01 were clearly not the same as that in case
4578/2002. In
the former, while both the respondent and the Minister of Land
Affairs in their papers disputed the applicant’s
locus
standi
to sue on the basis that the person
who had concluded the sale had not represented the respondent, and
suggested that the property
had not been properly described in the
deed of sale (a point abandoned in argument), they raised neither
the issue of the sale
being invalid by reason of the provisions of
the
State Land Disposal Act nor the
fact that the property was not
the respondent’s to sell. Consequently, but most importantly, the
question of invalidity was not
dealt with in judgment of Van Der Walt
J who, after dismissing the point raised in respect of locus standi,
clearly assumed the
sale to be valid.
[31] The
validity of the sale was thus not an issue decided by Van Der Walt J
upon which he ruled that the applicant was entitled
to relief. Nor
was it an issue mentioned by the learned judge in his judgment in the
application for leave to appeal as being one
of the issues he had
been obliged to decide in the main application. But it was an issue
pertinently raised in the papers in case
4578/2002 and was found by
Smit J to be determinative of those proceedings. The two proceedings
were determined by regard being
had to different issues and the
applicant clearly failed to establish the essential requirement of
eadem quaestio
.
[32] It is
readily apparent from what I have set out above that the applicant
cannot rely on
res judicata
or
issue estoppel as it has failed to establish the fundamental
requirements of that defence. As its case on the enforceability
of
the sale stands or falls on this issue, and as the validity or
otherwise of the sale had not been finally determined between
the
parties in case 15278/2002, the findings of Smit J, which were not
appealed against, cannot be merely regarded as
obiter
as the applicant contends but must be taken
as having been
res judicata
when the applicant instituted its action for damages. As a result,
the applicant is precluded both from enforcing any claim for
damages
under the invalid contract or, for that matter, from enforcing its
delictual claim for damages based on its allegation
that the
respondent maliciously or negligently failed to transfer the property
despite the order in case 15278/2002.
[33] This
conclusion renders it necessary to consider the special plea in
regard to prescription only insofar as it relates to
the claim that
the respondent’s servants acted negligently in selling the
property. In this regard the respondent pleaded that
the purported
sale of the property had been concluded in mid 2000 whereas the
action had only been instituted more than three years
later, on 29
October 2004, and that the claim had therefore prescribed under
s 11
of the
Prescription Act 68 of 1969
.
[34] In
seeking to avoid this, the applicant argued that it had not relied on
a claim which had arisen on the date of the sale
as the negligence
relied upon – in particular in paragraph 14.2.2 of the particulars
of claim where it is alleged that the respondent’s
servants had
‘failed to take steps to be authorized to sell the property by the
relevant department of state which was authorised
to sell the
property’ – had occurred well after the sale.
[35] This
was not an issue raised by the applicant in the stated case in which
it relied solely on its contention that prescription
had been
interrupted by the institution of proceedings in cases 15278/2001
and 4578/2002, alternatively only commenced to run
after judgment in
those two cases. The applicant is bound by that agreement and cannot
now seek to move the goalposts. In any event,
the claim as pleaded is
not capable of the import the applicant seeks to ascribe to it.
Paragraph 14.2.2 of the claim particularises
only one of the aspects
in which it is alleged (in para 14.2) that the respondent’s
servants has acted negligently ‘in selling
the property’. It is
quite clear from a reading of the pleading that the applicant relies
solely upon negligence at the time
of the sale.
[36] As I
have said, it was the applicant’s suggestion, albeit offered
somewhat tentatively in argument, that prescription had
been
interrupted by the institution of proceedings in cases 15278/2001 and
4578/2002. Again, this cannot be accepted. Under
s 15(1)
of the
Prescription Act the
running of prescription is interrupted by the
service of any process on the debtor whereby the creditor claims
payment of the debt.
The debt claimed in the present case is an
amount of damages allegedly suffered due to negligence on the part of
the respondent’s
servants. In neither case 15278/2001 nor 4578/2002
was payment of such a debt claimed and the relief sought in both of
those proceedings
was wholly inconsistent with such a claim. The
institution of proceedings in the two applications therefore did not
interrupt prescription
in respect of the applicant’s claim for
damages.
[37] It
was then argued by the applicant that by reason of the provisions of
s 12(3)
of the
Prescription Act, prescription
only began to run once
Smit J had delivered his judgment as until then the applicant could
not have known that the sale was invalid.
Again, this argument cannot
be accepted. The section provides that a creditor shall be deemed to
have knowledge of the identity
of the debtor and of the facts from
which the debt arises if he could have acquired it by exercising
reasonable care. In the present
case, the applicant was told by the
Department of Development Planning and Local Government in its letter
of 12 December 2000 that
the property ‘belongs to the National
Department of Public Works and not the Gauteng Department of
Education who instructed the
disposal of the property.’ From then
on, the applicant was aware that the property did vest in the
respondent. This was also
clearly set out in the respondent’s
opposing affidavit in case 15278/2001 which was filed in August 2001,
more than three years
before the institution of the applicant’s
action for damages. It may be that the applicant had not appreciated
the legal consequences
which flowed from the facts, but its failure
to do so does not delay the date prescription commenced to run.
[38] In
the light of these considerations it is clear that the applicant’s
delictual claim for damages arose in mid 2000, that
prescription
commenced to run by no later than December that year, that the claim
had therefore prescribed well before the institution
of action in
October 2004, and that the learned judge in the court
a
quo
correctly upheld the special plea in that
regard.
[39] To
summarise, both special pleas were correctly upheld in the court
below. There is no merit in the appeal and the application
for
leave to appeal must therefore be dismissed. Both parties employed
two counsel and it was not suggested by the applicant that
the costs
of two counsel were not warranted.
[40] One
further matter must be mentioned. In his further particulars, the
respondent had both admitted the applicant was entitled
to be repaid
the deposit of R45 200 it had paid after the conclusion of the deed
of sale and tendered to repay such sum. Counsel
for the applicant
submitted that irrespective of the outcome of the special pleas, this
court should therefore order the respondent
to repay that deposit.
[41] The
facts relevant to this issue have not been ventilated in the evidence
before us. We do not know if the deposit has been
repaid and, if not,
why the respondent has not done so. Not only can we not speculate on
the facts but the question of the respondent’s
liability to repay
in terms of his tender was not raised as an issue either in the
stated case or in the notice of appeal. It is
not properly before
this court and, in the circumstances, the invitation to deal
therewith must be declined.
[42] The
application for leave to appeal is dismissed with costs, such costs
to include the costs of two counsel.
________________________
LE
LEACH
ACTING
JUDGE OF APPEAL
APPEARANCES:
FOR
APP
LICANT: AD
WILSON and PJ BLOMKAMP
INSTRUCTED
BY:
EARLE
FRIEDMAN & ASSOCIATES, JOHANNESBURG
LOVIUS
BLOCK ATTORNEYS, BLOEMFONTEIN
FOR
RESPONDENT:
P M KENNEDY SC and M SELLO
INSTRUCTED
BY:
STATE
ATTORNEY, JOHANNESBURG and BLOEMFONTEIN
1
Smith v Porritt and Others
2008 (6) SA 303
(SCA) para
10 and
Kommissaris van Binnelandse Inkomste v ABSA Bank Bpk
1995
(1) SA 653
(A) at 669H-I and 670C-E.
2
African Farms and Townships Ltd v Cape Town Municipality
1963
(2) SA 555
(A)
3
City of Tshwane Metropolitan Municipality v RPM Bricks (Pty) Ltd
2008 (3) SA 1
(SCA) at [16] and [23].
4
AAA Investments (Pty) Ltd v Micro Finance Regulatory Council
2007(1) SA 343 (CC) at [29] [39] and [68].
5
Horowitz v Brook and Others
1988 (2) SA 160
(A) at 179 B - G.
6
Horowitz
at 179H-181A