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[2009] ZASCA 148
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Umgeni Water and Others v Mshengu (03/09) [2009] ZASCA 148; [2010] 2 All SA 505 (SCA) ; (2010) 31 ILJ 88 (SCA) (26 November 2009)
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THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA
JUDGMENT
Case no: 03 / 09
UMGENI
WATER First Appellant
PRINCIPAL
OFFICER OF THE
UMGENI
WATER RETIREMENT FUND Second Appellant
THE
MINISTRY OF WATER AFFAIRS Third Appellant
and
BONGINKOSI
VINCENT MSHENGU Respondent
___________________________________________________________________
Neutral citation:
Umgeni Water v Mshengu
(03/09)
[2009] ZASCA 148
(26 November 2009)
CORAM:
MPATI P, NUGENT, PONNAN JJA, HURT and WALLIS AJJA
HEARD:
20 November 2009
DELIVERED:
26 November
2009
SUMMARY:
Prescription Act 68 of 1969
– extinctive
prescription – dismissed employee – claim for retirement
benefits – cause of action not arising
or accruing whilst
dismissal in force.
___________________________________________________________________
ORDER
___________________________________________________________________
On
appeal from
:
The Pietermaritzburg High Court
(McLaren J sitting as court of first instance).
The appeal is dismissed with costs, such costs to include those
reserved by the court below for determination by this court.
___________________________________________________________________
JUDGMENT
___________________________________________________________________
PONNAN JA (MPATI P, NUGENT JA, HURT and WALLIS AJJA concurring):
[1] In what follows I shall, for convenience, refer to the parties by
their appellation in the court below. The plaintiff, Bonginkosi
Vincent Mshengu, an employee of the first defendant, Umgeni Water, a
public statutory water utility established in terms of the
Water
Services Act 108 of 1997
, instituted action against it in the
Pietermaritzburg High Court, as also against the second defendant,
the principal officer of
the Umgeni Water Retirement Fund, a pension
fund duly registered in terms of the Pension Fund Act 24 of 1956. The
Minister of Water
Affairs and Forestry was cited in his official
capacity as the third defendant, in terms of
s 47
of the
Water
Services Act, but
as no relief was sought against him he took no part
in the proceedings either in this court or the court below.
[2] The summons, to the extent here relevant, alleged that:
'(a) The Plaintiff was compelled to be a member of the
Second Defendant.
(b) The Plaintiff made monthly contributions to the
Second Defendant for his retirement.
(c) Upon retirement from the service of the First
Defendant, including early retirement, the Plaintiff would be
entitled to both
his withdrawal benefit and the First Defendant's
contribution to the employees' retirement fund held by the Second
Defendant (retirement
benefit).'
The plaintiff, pursuant to his contract of employment with the First
Defendant, claimed payment of the sum of R1 917 181.00, being
the
First Defendant's contribution to the employees' retirement fund held
by the Second Defendant. The summons, inter alia, elicited
the
following special plea:
‘
Any right which Plaintiff had to claim the
alleged early retirement benefit arose on 1 April 2003, at the
latest, being the date
from which Plaintiff elected to retire.
(a) Such claim would have become prescribed on 30 March
2006.
(b) The summons herein was issued on or about 28 June
2007.
(c) In the premises, the claim herein has become
prescribed.’
[3] The parties agreed, in terms of Rule 33 of the Uniform Rules, to
a written statement of facts in the form of a special case
for
adjudication before the high court (per McLaren J). The facts agreed
upon or assumed to be correct for the purpose of the special
case
are:
'1 The plaintiff was employed by the First Defendant.
During 2002, as result of restructuring by the First Defendant,
Plaintiff
applied for a newly created post. This application was
unsuccessful and Plaintiff was notified accordingly by letter dated
20 November
2002.
2 During September 2002 the Plaintiff was tried by a
disciplinary enquiry chaired by attorney Gina Barbieri.
3 On 21 October 2003 Barbieri found the Plaintiff guilty
of misconduct.
4 On 25 November 2002, and before the imposition of a
sanction in respect of the alleged misconduct, the Plaintiff notified
First
Defendant that he elected to take early retirement with effect
from 1 April 2003.
5 Had he taken such early retirement the Plaintiff would
have been entitled to payment of both his withdrawal benefit and
First
Defendant's contribution to the retirement fund administered by
Second Defendant on 1 April 2003.
6 In the event of his being dismissed prior to taking
early retirement, then the Plaintiff would only be entitled to his
withdrawal
benefit and not also the First Defendant's said
contribution.
7 On 27 November 2002 the First Defendant dismissed the
Plaintiff for the alleged misconduct.
8 Following on the dismissal the First Defendant
instructed the Second Defendant to pay Plaintiff only his withdrawal
benefit.
9 On 7 January 2003 Second Defendant paid Plaintiff his
withdrawal benefit.
10 The Plaintiff referred the dispute to the CCMA
wherein he alleged that his dismissal was unfair and at the CCMA
hearing he asked
for compensation rather than reinstatement.
11 On 25 September 2003 the CCMA Commissioner found that
the dismissal was procedurally and substantively unfair, did not
reinstate
Plaintiff but ordered First Defendant to pay Plaintiff
compensation in the amount of 9 months salary.
12 The First Defendant brought an application to the
Labour Court to review the Commissioner's decision and on 13 June
2006 the
Labour Court confirmed the Commissioner's finding that the
dismissal had been substantively (but not procedurally) unfair and
dismissed
the review application with costs.
13 On 29 June 2007 the Plaintiff instituted this action
against the First and Second Defendants for payment of the First
Defendant's
said contribution.'
[4] According to the parties, the question of law in dispute was
thus
:
'Whether or not the claim had become prescribed before
summons was served on 29 June 2007.'
McLaren J answered the question posed in the negative, but granted
leave to the appellant to appeal to this court and, by consent,
reserved the costs of the special case for the decision of this
court.
[5] Section 10 of the Prescription Act, No 68 of 1969 (the Act),
provides for the extinction of a debt after the lapse of periods
determined in s 11. The period of prescription applicable to the
plaintiff’s claim is that provided for in s 11(d) of the
Act,
namely 3 years. According to s 12(1) of the Act, prescription shall
commence to run 'as soon as the debt is due'. The words
‘debt
is due’ must be given their ordinary meaning.
1
In its ordinary meaning a debt is due when it is immediately
claimable by the creditor and, as its correlative, it is immediately
payable by the debtor. Stated another way, the debt must be one in
respect of which the debtor is under an obligation to pay
immediately.
2
[6] A debt can only be said to be claimable immediately if a creditor
has the right to institute an action for its recovery. In
order to be
able to institute an action for the recovery of a debt a creditor
must have a complete cause of action in respect of
it. The expression
‘cause of action’ has been held to mean: ‘
every
fact which it would be necessary for the plaintiff to prove, …
in order to support his right to judgment of the Court.
It does not
comprise every piece of evidence which is necessary to prove each
fact, but every fact which is necessary to be proved
’;
or slightly differently stated ‘
the entire set of
facts which give rise to an enforceable claim and includes every fact
which is material to be proved to entitle
a plaintiff to succeed in
his claim. It includes all that a plaintiff must set out in his
declaration in order to disclose a cause
of action. Such cause of
action does not “arise” or “accrue” until the
occurrence of the last of such facts
and consequently the last of
such facts is sometimes loosely spoken of as the cause of action.
’
3
A plaintiff must thus have a complete cause of action at the stage
when summons is issued or at any rate when the summons is served.
4
[7] On the view that I take of the matter, it was necessary for the
plaintiff to allege and prove the fact of his retirement in
order to
support his right to judgment. For as long as the plaintiff’s
purported dismissal was operative and in force, he
was precluded from
doing so. His dismissal accordingly operated as an impediment to his
asserting any claim to the first defendant's
contribution to his
retirement fund administered by the second defendant. Had the
plaintiff commenced his action on 1 April 2003,
he would not have
been able to allege all the facts upon which his claim was founded
and in particular that he had retired. The
fact of his dismissal
would thus serve to defeat his claim. It was only when the
plaintiff’s dismissal was held to be both
procedurally and
substantively unfair, that he was capable of alleging the last of the
material facts which had to be alleged in
order to enable him to sue.
It follows that the plaintiff’s cause of action did not ‘arise’
or ‘accrue’
on 1 April 2003 as contended by the
defendant. Consequently the question of law was correctly answered in
the plaintiff’s
favour.
[8] In the result the appeal is dismissed with costs, such costs to
include those reserved by the court below for determination
by this
court.
_________________
V M PONNAN
JUDGE OF APPEAL
APPEARANCES:
For
Appellant:
R J
Seggie SC
Instructed
by:
Venn
Nemeth & Hart Inc
Pietermaritzburg
McIntyre
& Van der Post
Bloemfontein
For
Respondent:
A de
Wet
Instructed
by:
Geyser
Du Toit Louw and Kitching Inc
Pietermaritzburg
Honey
Attorneys Inc
Bloemfontein
1
The Master v I L Back and Co Ltd
1983 (1) SA 986
(A) at 1004F.
2
See
Western Bank Ltd v S J J van Vuuren Transport (Pty) Ltd and
others
1980 (2) SA 348
(T) at 351 and
HMBMP Properties (Pty)
Ltd v King
1981 (1) SA 906
(N) at 909 and the cases there cited.
3
See
Evins v Shield Insurance Co
Ltd
1980
(2) SA 814
(A) at 838 and the cases there cited by Corbett JA; see
also
Truter and another v Deysel
[2006] ZASCA 16
;
2006
(4) SA 168
(SCA) para 16, 18 and 19.
4
Mahomed v Nagdee
1952
(1) SA 410
(A) at 418;
Marine and Trade
Insurance Co Ltd v Reddinger
1966 (2)
SA 407
(A) at 413D;
Santam Insurance Co
Ltd v Vilakasi
1
967
(1) SA 246
(A) at 253 A-F.