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[2016] ZAGPPHC 901
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Tanker Services (Pty) Ltd v Lethiba (43918/2013) [2016] ZAGPPHC 901 (22 September 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
NORTH
GAUTENG DIVISION, PRETORIA
22/9/16
CASE
NO: 43918/2013
Reportable:
No
Of
interest to other judges: No
Revised.
TANKER
SERVICES (PTY)
LTD
Plaintiff
and
LEHLOHONONLO
CORNELIUS
LETHIBA
Defendant
JUDGMENT
MSIMEKI
J,
INTRODUCTION
[1]
On 29 August 2007 the plaintiff instituted an action against Dambas
Breweries CC (1969/036009/23), (the "CC"), seeking
payment
for damages that it suffered when its truck was damaged in a
collision between the truck and a truck which was driven by
the late
Mr Bongani G. Ndumo ("Ndumo") who, at the time, was
allegedly acting within the course and scope of his employment
with
the defendant, the CC on 17 October 2004. Mr Lehlohonolo Cornelius
Lethiba, the defendant in the current matter, under the
above case
number, at the time of the accident, was the sole member of the CC.
The CC was finally deregistered on 24 February 2011
but this,
allegedly, came to the plaintiff s knowledge only on 16 October 2011.
The plaintiff, as a result, instituted the current
action against the
current defendant seeking payment of the amount of R717 806 59;
interest at the rate of 15.5% per annum a
temporae morae
to
date of final payment and costs of suit.
[2]
The plaintiff s action against the CC, under case number 40113/07,
was instituted in this Court, Pretoria. The summons in the
current
matter was issued on 18 February 2013.
[3]
The CC, in the matter under case number 40113/07, pleaded to the
plaintiffs particulars of claim on 19 February 2008 and the
plea was
served on the defendant on 20 February 2008.
[4]
The CC, as shown above, was deregistered on 24 February 2011. The
plaintiff alleges that it became aware of the deregistration
of the
CC on 11 October 2011 which was before the action against the CC was
finalised.
[5]
In the current matter, the defendant raised a special plea of
prescription as its defence. The parties at the outset of the
trial
agreed that the issues be separated in terms of
Rule 33(4) of the
Uniform Rules of Court.
The gist of the parties' application was
that the Court would deal only with the special plea, while the other
issues would be postponed
sine die.
The Court granted such
order.
[6]
The parties held a pre-trial conference in November 2015. One gleans
from the pre-trial minute that:
1. The defendant was
appointed a member of the CC on 1 February 2001.
2. He was the only active
member of the CC; and
3. The CC was finally
deregistered on 24 February 2011.
THE
ISSUE
[7]
The issue to be resolved is whether the current plaintiff's action
under case number 43918/13 has prescribed. The defendant
contends
that it has while the plaintiff holds an opposite view.
[8]
Advocate W. Geyser ("Mr Geyser") and Advocate S. S Green
("Ms Green") argued the matter for the plaintiff
and the
defendant respectively.
[9]
Ms. Green submitted that the defendant had the duty to begin. She
submitted that the action against the CC was based on vicarious
liability. Mr Geyser disagreed. Ms Green's submission was that the
plaintiff, in that action, had taken an inordinately long time,
after
the plea, before the action was disposed of. The action was not
finalised until the CC was deregistered. Ms Greene's view
was that
the plaintiff had done nothing to further the matter. She submitted
that the argument, on behalf of the plaintiff, was
that its mandate,
at some stage, was terminated and this, according to her, was not an
acceptable reason. She questioned the institution
of the second
action against the current defendant on the same cause of action. Her
argument was that the current defendant ought
to have been joined to
the original action or that the CC be cited as the CC in
deregistration. I find it unnecessary to determine
whether or not her
view holds water, for the purposes of resolving the current issue.
[10]
Ms Green submitted that there was no final judgment in the plaintiffs
case against the CC and that the defendant had pleaded
and denied
liability. Vicarious liability, according to her, still had to be
proved. It was her further submission that no acceptable
explanation
as to the delay in the finalisation of the matter had been
forthcoming. It seemed, according to her, that the plaintiff
had
abandoned its action against the CC. The delay in finalising the
matter, in my view, seems to work against the plaintiff. This
will
become apparent later.
[11]
It was not surprising when Ms Green referred to the case of
Silhoutte
Investments Ltd v Virgin Hotels Group Ltd
2009 (4) SA 617.
This,
Ms Green argued, because the first case against the CC had a bearing
on the case against the present defendant.
[12]
Mr Geyser, for the plaintiff, submitted that the two Courts i.e.: in
the plaintiff s case against the CC and the current case,
have two
separate causes of action. The defendant's liability, in this matter,
according to him, has been created by statute, namely
Section
26(5) of the Close Corporation Act 69 of 1984.
Under case number
40113/07, the plaintiff, according to him, relied on vicarious
liability. The submission, in my view, is correct.
[13]
Mr Geyser submitted that the parties in the two matters are
different. A member is the party in the current matter while the
CC
was a party in the first matter. This again appears to be correct.
[14]
Before resolving the issue, it will be important to quote the
relevant statutes. These are:
1.
Section 26(5) of the Close Corporation Act 69 of 1984;
2.
Sections 11(d)
;
12
and
15
(1) and
15
(2) of the
Prescription Act 68 of
1969
; and
3.
Sections 225
;
83
(2) and
83
(3) and paragraph 10(1) of Schedule 5 of
the
Companies Act 71 of 2008
.
[15]
Section 26(5)
of Act 69 of 1984
provides:
"(5) If a
Corporation is deregistered while having outstanding liabilities.
the persons who are members of such Corporation at the time of
deregistration shall be jointly and severally liable for such
liabilities".
(my emphasis).
Section
26
has been amended.
[16]
Section 11(d)
of the
Prescription Act 68 of 1969
provides:
"11. Periods
of prescription of debts
(a)
(b)
(c)
(d) save where an Act
of Parliament provides otherwise,
three years in respect of
any other debt
".
(my emphasis).
Section
12 (1) of the Act
provides:
"12. When
prescription begins to run
(1) Subject to the
provisions of subsections (2) and (3), prescription shall commence to
run
as soon
as
the debt is due
".
(my emphasis).
Sections
12(2) and (3)
of the Act
provide:
"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
.
(my emphasis).
(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" .
(my emphasis).
Sections
15(1) and (2)
provide:
"15. Judicial
interruption of prescription
(1) The running of
prescription shall, subject to the prov1s1ons of subsection (2),
be
interrupted by the service on the debtor of any process
whereby the creditor claims payment
of
the debt
.
(my emphasis).
(2)
Unless
the debtor acknowledges liability, the
interruption of prescription in terms
of subsection (1
J
shall lapse. and the running of prescription shall not be
deemed to have been interrupted. if the creditor does not
successfully
prosecute his claim under the process in question to
final judgment
or if he does so prosecute his claim but
abandons the judgment or the judgment is set
aside"
.
(my emphasis).
[17]
Section 225
of the
Companies Act 71 of 2008
provides:
"225.
Short title and commencement:-
(i)
This Act is called the
Companies Act, 2008
, and, subject to sections
(2)
comes
into operation on
a
date fixed by the
President by proclamation in the Gazette" .
Section
83(2)
provides:
"The removal of
a
company's name from the companies register does not affect the
liability of any former director or shareholder of
a
company
or any other person in respect of any act or omission that took place
before the company
was
removed from the register".
Section
83(3)
provides:
"
Any
liability contemplated in subsection (2) continues and may be
enforced
as
if the company had not been removed
from the register".
(my emphasis).
A
close reading of
Section 83
reveals the relationship it has with the
old
Section 26(5) of the Close Corporation Act 69 of 1984.
[18]
Mr Geyser submitted that it was not possible to continue with the
process instituted under case number 40113/07 against the
CC. Indeed,
this is so because the CC was deregistered.
Section 26(5) of the
Close Corporation Act 69 of 1984,
according to Mr Geyser, was
caused to kick in by the deregistration of the CC resulting in the
involvement of the defendant in the
current matter. This,
albeit
incorrectly, impelled the plaintiff to have the second action
instituted against the defendant on 18 July 2013. The question,
however,
is whether the second action has not prescribed or whether
there is truly a valid action in the second case.
[19]
Mr Geyser submitted that the delay in obtaining a trial date in the
initial action against the CC was of no consequence. It
is indeed so.
(See:
Melamed and Another v BP Southern Africa (Pty) Ltd
2000 (2)
SA 614
(WLD) 620G-6220).
However, it is of consequence seen in
the light of the current case. The action in the first case ought to
have been brought to
finality. In this way, the debt would have been
determined.
[20]
Prescription, as a plea, according to Mr Geyser, was raised by the
defendant in the second action. This is correct.
[21]
In resolving the issue of prescription that the defendant raised, it
is indeed prudent to determine when in respect of the
second summons:
1. the debt became due;
2. the facts from which
the debt arose; and
3. when the knowledge of
the identity of the debtor was gained.
However,
the second action ties up with and is dependent on the existence of
the first action. The plaintiff s debt in the first
action was never
determined.
[22]
It is noteworthy that the date on which a debt arises and the date on
which it is due are not necessarily the same (See: The
Master v IL
Back and Co Ltd
1983 (1) SA 986
(AD) at 1004F-G
and
List v
Jungers
1979 (3) SA 106
(AD) at 121C-D
). The difference between
the two dates relates to the coming into existence and the
recoverability of the debt. The debt in the
first action has
evidently not been determined. The CC has been deregistered. There
can therefore, be no debt against the defendant
in the second action.
[23]
In the current case, according to Mr Geyser, the defendant's
liability was created by
Section 26(5) of the Close Corporations
Act
which only kicks in once a close corporation is deregistered.
Mr Geyser further submitted that the prescriptive period, in respect
of the debt, could not commence to run as against the current
defendant before the close corporation was deregistered. The
defendant's
liability, the submission proceeded, only arose on 24
February 2011 when the CC was deregistered. It is on this date that
the plaintiff's
right of action against the defendant was
established. All it means is that the "facts from which the debt
arose, as envisaged
in
Section 12(3)
of the
Prescription Act
>,
came into existence on 24 February 2011 when the identity of the
debtor" became known. The plaintiff, therefore, could not
exercise the remedy that
Section 26(5)
created, against the
defendant in his capacity as a member of the CC before the CC was
deregistered. Sight should not be lost of
the fact that the
defendant's liability in the second action depends on whether there
is liability against the CC.
[24]
Section 26(5)
's purpose, according to Mr Geyser, is to bring
on board a member who prefers the route of deregistration instead of
the other routes
such as liquidation where the rights of the
creditors are properly taken care of. (See:
Mouton v Boland Bank
Ltd
2001 (3) SA 877
at 881 paragraph [7]
to [9]
). However,
the defendant's liability in the second action must be seen in the
light of the existence or non-existence of liability
on the part of
the CC.
[25]
The liability created in terms of
Section 26(5)
,
once created,
continues even in circumstances where the Close Corporation might
subsequently be re-registered. (See:
Mouton v Boland Bank Ltd
(supra)).
This is indeed so, however, no liability
was determined until the CC was deregistered.
[26]
Ms Green, asked by the Court if a member of a CC and the CC could be
cited simultaneously, answered that that would not be
proper and
permissible. Indeed, she was correct as the member could only be
brought on board once the CC was deregistered. This
obviously negates
Ms Greene's submission that the plaintiff ought to have joined the
current defendant to the action that the plaintiff
brought against
the CC.
[27]
Of significance is the answer to the question whether there was a
debt which the defendant had to take over when the CC was
deregistered.
[28]
Section 26(5) of the Close Corporation Act,
as it then was,
speaks of "liabilities". To be "jointly and severally
liable" for the liabilities of the CC
presupposes that the
liability must be in existence when the close corporation is
deregistered. This, in my view, means that such
liability must have
been determined when the close corporation is deregistered. This begs
the question whether such liability was
determined before the close
corporation was deregistered on 24 February 2011. It appears not as I
shall demonstrate shortly.
[29]
Liability in my own understanding will cover debts. Even if I am
wrong, Mr Geyser, in paragraph 2.3 of their heads of argument
says:
"2.3 Relevant to
the issue of prescription raised
as a
defence in this case the
issues to be decided revolve around the questions which may be
formulated as follows:
2.3.1.
When the debt became due;
2.3.2.
the facts from which the debt arises;
2.3.3.
knowledge of the identity of the debtor."
This
seems to support my view, and takes us to what the meaning of the
"debt is due" is. In
The Master v IL Back and Co Ltd
1983
(1)
SA 986
at 1004F-H
the Court said:
"The date on
which
a
debt arose and the date on which it is due are not
necessarily the same, see List v Jungers
1979 (3) SA 106
(A) at
121. The import of the submissions in (aa) and (bb) is that the debt
may well have arisen but that it had not become due
as
required
by
s 12
(1) of the
Prescription Act. The
words "debt is due"
in the section must be given their ordinary meaning. It
seems
clear that there must be
a
liquidated money obligation
presently
claimable by the creditor for which an action could
presently be brought against the debtor. Stated another way, the debt
must be
one in respect of which the debtor is under an obligation to
pay immediately, 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".
All
this means is that for a debt to be "due" there must be a
liquidated money obligation presently claimable by the creditor
for
an action that could presently be brought against the debtor. This,
put differently, means that the debt must be payable "immediately".
[30]
To resolve the impasse we need to answer the question whether the
debt when the CC was deregistered was immediately payable.
The
question, as Ms Green correctly submitted, cannot be answered in the
affirmative. This is because the debt in the first case
brought
against the CC still had to be determined when the CC was
deregistered. There was no debt yet that could be taken over
in terms
of
Section 26(5)
by the defendant in the current matter. The
debt was not immediately payable as it was not in the form of a
liquidated claim. The
CC, in any event, denied liability.
[31]
Once our answer to the question is in the negative the matter then
ends here because there is no liability or debt of the CC
which has
been determined and which must fall on the shoulders of the current
defendant. Liability had to be determined before
it could be passed
on to the current defendant. There is, therefore, no liability which
the current defendant must inherit. The
second action, which is
dependent on the action against the CC which, in my view, has
prescribed, has also prescribed.
[32]
The plaintiff had the opportunity to have liability determined before
the CC was deregistered but for no explicable and acceptable
reason
failed to do so. I say so because a very long time lapsed after the
CC pleaded in the first case.
[33]
The summons was served on 29 August 2007 while the defendant's plea
was served on the plaintiff on 20 February 2008. The time
between the
plea and the deregistration, indeed, is inordinately long. Liability
can now not be determined against the CC which
no longer exists. In
any event, the CC could probably successfully refute such liability.
[34]
Mr Geyser submitted that the parties are different and this, in my
view, bolsters my view that this is not the correct forum
to
determine the CC's liability in its absence. The train has come and
gone leaving the plaintiff behind.
[35]
Given the fact that the plaintiff did not successfully prosecute its
claim under case number 40113/07 to final judgment, it
can now safely
be accepted that the interruption of prescription in terms of
subsection 15(1) of the
Prescription Act
has
lapsed. The
plaintiff did nothing until the CC was deregistered. This enables one
to safely accept that the plaintiff's, intention
was not to prosecute
its claim under the process in question to final judgment. The debt
was not determined when the CC was deregistered.
Had the plaintiff
seriously intended to pursue the process, the debt would have been
determined before the CC was deregistered.
This was not done and the
CC is deregistered. A decision was taken to have the CC deregistered
long after the plaintiff failed
to prosecute its claim and this has
its implications. The position would have been different had the CC
been deregistered after
the debt was determined. Liability of the CC
would probably have been established. This never happened.
[36]
The defendant, had the debt been determined before the CC was
deregistered, would have been jointly and severally liable for
such
debt. Having regard to what is meant by "the debt is due",
it then becomes abundantly clear that no debt which was
immediately
payable had been determined when the CC was deregistered.
[37]
Indeed, it is correct as Mr Geyser submitted that
the
Companies
Act 71 of 2008
became law on 1 May 2011 which was after the CC
was deregistered. The deregistration occurred when
Section 26(5)
was still applicable.
[38]
Paragraph 10(1) of Schedule 5 to the
Companies Act 71 of 2008
deals
with transitional arrangements. It provides:
“
Any proceedings
in any Court in terms of the previous act immediately before the
effective date are continued in terms of that Act,
as
if it
had not been repealed".
[39]
Section 83
(2) of the
Companies Act 71 of 2008
provides:
"The removal of
a
company's name from the companies register does not affect the
liability of any former director or shareholder of
a
company
or any other person in respect of any act or omission that took place
before the company was removed from the register".
Section
83(3)
provides:
"Any liability
contemplated in subsection (2) continues and may be enforced as if
the company had not been removed from their
register".
(my
emphasis).
[40]
I indicated above, that there was no debt which was immediately
enforceable when the CC was deregistered. According to the
'Concise
Oxford Dictionary, Tenth Edition Revised and edited by Judy Pearsa
',
"enforce"
means
"compel compliance with (a
law, rule, or obligation) cause to happen by necessity or force".
Enforce appears in
Section 83(3)
of the
Companies Act 71 of
2008
.
It, in my view, bears the same meaning.
[41]
I said earlier on that liability properly considered must mean a
debt. You enforce a debt which has been determined or established
and
not a liability which is still to be determined.
[42]
It will be remembered that the plaintiff over a period of time did
nothing to prosecute its claim to final judgment under case
number
40113/07. The judgment which could have determined liability and the
debt was not obtained by the plaintiff until the CC
was deregistered.
There was no debt determined at the time of deregistration. There is
still no debt at this point in time. The
plaintiff s claim against
the Dambas Breweries CC has accordingly prescribed. This, as a
consequence, means that the plaintiff
s claim against the current
defendant has also prescribed (See:
Silhouette Investments Ltd v
Virgin Hotels Group Ltd
2009 (4) SA 617
(SCA)).
[43]
Mr Geyser submitted that prescription as against the current
defendant could not commence to run from any date earlier than
the
date the Close Corporation of which he was a member was deregistered
on 24 February 2011 and that the current summons was issued
and
served upon the defendant within the period of 3 years as envisaged
in
Section 11(d)
of Act 68 of 1969
i.e.: calculated from the
date of deregistration of Dambas Breweries CC. This, in light of what
I have discussed above cannot be
correct. The plaintiff's claim in
the second action depends on the existence of a valid claim in the
first action. The first claim
prescribed resulting in the
prescription of the second claim. The defendant's special plea, in my
view, should succeed.
ORDER
[44]
I, as a result, make the following order:
The
plaintiff's claim is dismissed with costs.
______________________
M.
W. MSIMEKI
JUDGE
OF THE HIGH COURT SOUTH AFRICA
GAUTENG
DIVISION OF THE HIGH COURT,
PRETORIA