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[2013] ZAECMHC 20
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Meyer v Legal Expenses Insurance SA Ltd (872/06) [2013] ZAECMHC 20 (7 March 2013)
IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE HIGH COURT: MTHATHA
CASE NO: 872/06
Heard on: 04/02/13
Delivered on: 07/03/13 REPORTABLE
In the matter between:
VICTOR MEYER
........................................................................................
Plaintiff
and
LEGAL EXPENSES INSURANCE S.A. LTD
........................................
Defendant
_____________________________________________________________
JUDGMENT ON SPECIAL PLEA
____________________________________________________________
NHLANGULELA J:
[1] The plaintiff, an adult male, was an employee of the
University of Transkei. In May 2001 the plaintiff together with other
workers
were retrenched by the University. On 02 August 2006 he
instituted an action against the defendant claiming payment of
R949 324,08
as contractual damages arising out of an alleged
failure by the defendant to challenge the retrenchment in the Labour
Court. Amongst
other defences raised in the defendant’s plea to
the plaintiff’s particulars of claim is a special plea that the
plaintiff’s
claim has become prescribed. This is a statutory
defence in terms of s 12 of the Prescription Act 68 of 1969 (the Act)
which reads:
“
When prescription begins to run
-
Subject to the provisions of subsections (2), (3) and (4)
prescription shall commence to run as soon as the debt is due.
If the debtor willfully 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.
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.
…”
[2] The facts of this matter can be gleaned from the
allegations made in the pleadings, the documents discovered in terms
of Rule
35 and the oral evidence of Miss Helena Archer, the Branch
Manager of the defendant, based in East London. As a policy holder
with
the defendant, and as such being entitled to legal assistance,
the plaintiff reported the dispute which he had with the University
to the defendant in East London office. The protracted negotiations
pertaining to the retrenchments that were going on in the University
yielded no positive results for the plaintiff. A referral of the
dispute to the Commission For Conciliation Mediation and Arbitration
(the CCMA) in terms s 191(1)(b) of the Labour Relations Act 66 of
1995 was delayed for a period of approximately 17 months. An
application for condonation of the late referral of the dispute to
the CCMA in terms of s 191(2) of Act 6 of 1995 made on 22 October
2002 was dismissed on 13 February 2003. This came to the knowledge of
the plaintiff on 10 April 2003. The plaintiff blamed the
defendant
for the prescription of his claim for re-instatement. As a result he
sought redress against the defendant in a form of
damages for loss of
past and future income calculated from the date of retrenchment up to
the date of retirement. When this claim
was resisted by the defendant
the plaintiff resorted to this court. He issued summons on 02 August
2006, which were received by
the defendant on 03 August 2006.
[3] In resisting the special plea
Mr Mgxaji,
the
attorney who appeared on behalf of the plaintiff, sought to challenge
the evidence of Ms Archer on the basis of certain discovered
correspondence. The first is a letter dated 23 July 2003 addressed by
the defendant to the plaintiff. The letter reads as follows:
“Further to the above we are advised by our Ms Maholwana,
Manager of our Umtata Branch, that you attended at her offices
today
where she explained the options we suggested to proceed further with
your matter.
Ms Maholwana now advises that you request the explanation in writing
as follows:
Our Labour Attorney Mr Pierre Naude has consulted with counsel and
suggests that your matter be referred back to Mr Tshiki who
would be
instructed to make an application to the High Court in Umtata by way
of a constitutional challenge to the decision to
retrench you on the
basis of unfair administrative action in terms of the Promotion of
Administrative Justice Act.
Should you be successful in the above application, Unitra would then
be obliged to follow the correct procedures in effecting a
retrenchment i.e. negotiation with yourself. Alternatively should the
court find that the previous procedures were correct the
matter will
end there.
Please bear in mind that should you succeed in being reinstated, the
university may re-open the disciplinary matter against you
for the
“mysterious disappearance” of the vehicle which you were
driving, as well as bring charges of insubordination
for the
“numerous verbal warnings and reprimands” issued by the
Dean of the University.
You stated to the writer hereof that our legal advisor Mrs Sindi
Sidinile delayed in referring the matter to the CCMA and that
you
felt that LegalWise had been negligent as a result of Mrs Sidinile’s
delay. In this instance if you feel that LegalWise
has been negligent
you have recourse to the law. We of course reserve our rights in this
matter and deny that Mrs Sidinile was
negligent.”
[4] The second letter is dated 08 October 2003, written
in the following terms:
“For your information, we enclose herewith a copy of a letter
we have written on your behalf. The letter has already been
faxed/posted. As soon as there are further developments, we will
again communicate with you.
Should you have any queries or need to discuss the progress in this
case, please do not hesitate to contact the hereof.”
[5] The nub of the cross-examination on both letters as
aforementioned was that the defendant, based on the contents thereof,
admitted
the blame, undertook to remedy the financial loss incurred
and cannot be heard to say that the plaintiff’s claim has
become
prescribed in terms of the Act. Ms Archer denied these
suggestions. Another letter dated 10 September 2003, which Ms Archer
was
questioned about during cross examination, and interpreted to
mean that the defendant offered to settle the plaintiff’s claim
in the sum of R6 500,00, re-inforces the belief I have that the
reason behind these letters was to defeat the special defence
of
extinctive prescription.
[6] The approach to the evidence that was placed before
the court must be on the basis that it was acceptable to both
parties. I
say this because there was no contradictory evidence
adduced by the plaintiff.
[7] The central issue for determination by this court is
whether the defendant proved that the plaintiff’s claim has
become
prescribed. That the
onus
to prove prescription rests
upon a party who raises it is trite law –
Absa Bank Bpk v De
Villiers
2001 (1) SA 481
(SCA).
[8]
Mr Seape,
counsel who appeared on behalf of
the plaintiff submitted that a debt which prescribes after the
lapsing of three years as provided
in s 11(d) read with s 12 (1) of
the Act must be a debt which is described as:
“that which is owed or due, anything (as money, goods or
services) which one person is under an obligation to pay or render
to
another”
as stated in the case of
Electricity Supply
Commission v Stewarts and Lloyds of SA (PTY) Ltd
1981 (3) SA 340
(A) at 34F-G. The plaintiff’s claim of R949 324,08 is such
a debt. And it is common cause that the facts and circumstances
in
which the sum of R949 324,08 is calculated crystalised at the
moment that the plaintiff acquired knowledge of the CCMA
ruling on 10
April 2003. According to the evidence the defendant was to blame for
the prescription of the plaintiff’s right
to pursue litigation
against the University. As from 10 April 2003 the debt in question
became due and the three years prescription
in terms of the Act
started to run. When the summons were served upon the defendant on 03
August 2006 a three year period had already
lapsed. In my view the
statements of law made by Van Heerden JA in the case of
Truter And
Another v Deysel
[2006] ZASCA 16
;
2006 (4) SA 168
(SCA) at 174 sum up the case for
the defendant. It was there stated as follows:
“[16] I am of the view that the High Court erred in this
finding. For the purposes of the Act, the term “debt due”
means a debt, including a delictual debt, which is owing and payable.
A debt is due in this sense when the creditor acquires a complete
cause of action for the recovery of the debt, that is, when the
entire set of facts which the creditor must prove in order to succeed
with his or her claim against the debtor is in place or,
in other
words, when everything has happened which would entitle the creditor
to institute action and to pursue his or her claim.
[17] In a delictual claim the requirements of fault and unalwfulness
do not constitute
factual
ingredients of the cause of action,
but are
legal
conclusions to be drawn from the facts:
‘A cause of action means the combination of
facts
that
are material for the plaintiff to prove in order to succeed with his
action. Such facts must enable a court to arrive at certain
legal
conclusions regarding unlawfulness and fault, the constituent
elements of a delictual cause of action being a combination
of
factual and legal conclusions,
namely a causative act, harm,
unlawfulness and culpability or fault.’
[18] In the words of this Court in
Van Staden v Fourie:
‘Artikel 12(3) van die Verjaringswet set egter nie die aanvang
van verjaring uit totdat die skuldeiser die volle omvang van
sy regte
uitgevind het nie. Die toegewing wat the Verjaringswet in hierdie
verband maaak, is beperk tot kennis van “die feite
waaruit die
skuld ontstaan.”’
[19] ‘Cause of action’ for the purposes of prescription
thus means ‘…every fact which it would be necessary
for
the plaintiff to prove, if traversed, in order to support his right
to the 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.’”
(The underlining are mine for emphasis).
[9] The argument advanced by
Mr
Mgxaji
that the correspondence exchanged
between the parties on 23 July 2003 and 08 October 2003 established
the cause of action which
is determinative of the time prescription
begins to run goes against the grain of the law which was stated in
the case of
Truter, supra,
and
more particularly the term: “the facts from which the debt
arises” in s 12 (3) of the Act. The plaintiff did not
need
every piece of evidence inorder to institute his action. He needed
the minimum facts such as those which were already present
when the
CCMA ruling was issued. He did not need any confirming legal opinion
from the defendant or his own lawyers. This was aptly
stated by
Cameron JA (as he was then) and Brand JA in
Minister
of Finance And Others v Gore NO
2007 (1) SA
111
(SCA) at 119-120, para. [17] as follows:
“This Court has, in a series of decisions, emphasized that time
begins to run against the creditor when it has the minimum
facts that
are necessary to institute action. The running of prescription is not
postponed until a creditor becomes aware of the
full extent of its
legal rights, nor until the creditor has evidence that would enable
it to prove a case ‘comfortably’…”
[10] The matters raised in the correspondence referred
to by
Mr Mgxaji
could not have prevented the plaintiff from
instituting the action because all the ingredients of the cause of
action were present
as early as on 10 April 2003. The letter dated 23
July 2003 raised two things, namely, a legal opinion that the
plaintiff may pursue
his labour dispute against the University in the
High Court and that he is free to institute action for damages
against the defendant.
The letter of 08 October 2003 refers to an
unknown correspondence. These letters neither established the cause
of action that is
encapsulated in the plaintiff’s particulars
of claim nor did they prevent the plaintiff from coming to know of
the existence
of the debt as envisaged in s 12 (2) of the Act.
Further, the alleged acknowledgement of liability to the plaintiff’s
claim
was denied by Ms Archer. There is no documentary evidence, in a
form of a written agreement, of admission of liability. Consequently,
interruption of prescription could not have taken place as envisaged
in s 14 of the Act, which reads:
‘
Interruption of prescription by acknowledgement of
liability-
The running of prescription shall be interrupted by an express or
tacit acknowledgment of liability by the debtor.
If the running of prescription is interrupted as contemplated in
subsection (1), prescription shall commence to run afresh from
the
day on which the interruption takes place or, if at the time of the
interruption or at any time thereafter the parties postpone
the due
date of the debt, from the date upon which the debt again becomes
due.”
[12] In the circumstances the application for the
dismissal of the action based on the special plea of prescription
succeeds. The
costs will follow this outcome.
[13] In the result the following order shall issue:
The defendants’s special plea of prescription be and is
hereby upheld.
The plaintiff’s action be and is hereby dismissed.
The plaintiff to pay the costs of the action.
___________________________________
Z.M. NHLANGULELA
JUDGE OF THE HIGH COURT
Attorney for the plaintiff : Mr S.L. M. Mgxaji
of Mgxaji Mdunge Inc.
MTHATHA.
Counsel for the defendant : Adv M. Seape
Instructed by : N.Z. Mtshabe Inc.
MTHATHA
c/o Norton Rose Attorneys
JOHANNESBURG.