Unilever Bestfoods Robertsons (Pty) Ltd and Others v Soomar and Another (613/05) [2006] ZASCA 144; 2007 (2) SA 347 (SCA) (1 December 2006)

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[2006] ZASCA 144
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Unilever Bestfoods Robertsons (Pty) Ltd and Others v Soomar and Another (613/05) [2006] ZASCA 144; 2007 (2) SA 347 (SCA) (1 December 2006)

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REPUBLIC
OF SOUTH AFRICA
THE SUPREME COURT OF
APPEAL
OF
SOUTH AFRICA
Case number:613/05
Reportable
In the matter between:
UNILEVER BESTFOODS ROBERTSONS (PTY) LTD FIRST
APPELLANT
UNIFOODS (PTY) LTD
SECOND APPELLANT
SP DU PREEZ THIRD APPELLANT
DRD
MULLER FOURTH APPELLANT
R
LECOLLE-BROWN FIFTH APPELLANT
TIGER
OATS LTD SIXTH APPELLANT
UNIVERSAL
GROUP LTD SEVENTH APPELLANT
H
McBAIN EIGHTH APPELLANT
B
KAPLAN NINTH APPELLANT
and
IM SOOMAR
FIRST RESPONDENT
CISKEI OIL & CAKE MILLS (PTY) LTD
SECOND RESPONDENT
CORAM
: FARLAM, BRAND, NUGENT, MLAMBO JJA et
CACHALIA AJA
HEARD
: 1 NOVEMBER 2006
DELIVERED
: 1 DECEMBER 2006
SUMMARY:
Prescription –
when claim based on acts committed pursuant to a conspiracy
prescribes.
Neutral citation: This
judgment may be referred to as
Unilever Bestfoods Robertsons v
Soomar
[2006] SCA 172 (RSA).
__________________________________________________________
JUDGMENT
__________________________________________________________
FARLAM JA
INTRODUCTION
[1] This is an appeal
against a judgment given by JH Combrink J, sitting in the Durban High
Court, dismissing with costs special pleas
of prescription filed on
behalf of the appellants.
[2] The first respondent,
a business resident in Durban, and the second respondent, a company,
which conducted the business of refining,
bottling and selling edible
oils in Ciskei, instituted action in the Durban High Court in
October, 2001, against the appellants,
four companies and five
individuals, claiming judgment against them jointly and severally,
for payment of damages of R1 476 000.00
to the first respondent and
R46 633 000.00 to the second respondent. In what follows I shall
refer to the parties as they were in
the court
a quo.
ALLEGATIONS IN THE
PLAINTIFFS’ PARTICULARS OF CLAIM
[3] The learned judge in
the court
a quo
has provided the following summary of the
allegations in the plaintiffs’ particulars of claim, which I
gratefully adopt:
‘
In
their comprehensive particulars of claim the plaintiffs allege that
the second plaintiff conducted the business of refining, bottling
and
selling edible oils at Mdantsane in the Ciskei. To that end and at
all material times during the period 18 July 1991 to 6 March
1993 the
second plaintiff imported crude edible oil for refinement and bottled
it at its factory at Mdantsane; sold some of the refined
and bottled
oil for export to Ludwig and Sangudia of Lubumbashe, Zaire, and was
consequently entitled to claim import duty rebates
in respect of the
crude oil which was refined and manufactured to become the exported
oil by virtue of item 470.04 of the Schedule
to the Customs and
Excise Act of Ciskei, alternatively, second plaintiff claims that it
was never obliged to pay import duty on the
imported oil because such
duty was payable in terms of the Customs Union Agreement purporting
to bind in South Africa, Botswana,
Lesotho, Swaziland and Ciskei,
which agreement was only signed by South Africa and Ciskei, the other
intended signatories refusing
to recognise Ciskei as party or to sign
the common Customs Union Agreement with the inclusion of the Ciskei.
Consequently, so it
is alleged, the second plaintiff was not obliged
to pay VAT on the exported oil. The second plaintiff continues to
allege that it
duly claimed the customs rebate on the exported oil
and did not pay VAT on the exported oil, all of which was within its
entitlement
to do.
The first defendant (Unilever) and the
sixth defendant (Tiger Oats), so the plaintiffs allege, were also
engaged in the manufacture
and sale of edible oils and, accordingly,
were direct trade competitors of the second plaintiff in the
marketing of edible oils in
the Republic of South Africa and abroad.
Central to the plaintiffs’ cause of action lies an elaborate
conspiracy entered into between
all the defendants, according to the
plaintiffs, which existed during the period June 1993 up to April
2001 and which had as its
aim to damage or destroy the plaintiffs’
business operations in the manufacture and sale of edible oils; to
damage the plaintiffs
in their patrimony generally and in their good
name and reputation.
In execution of the objects of the
conspiracy the defendants, on a date or dates to the plaintiffs
unknown, secured the services of
Dutton, Botha and Gamble, who
conducted the business of Private Investigators under the style of
Hamilton-Whitton SA (Hamilton-Whitton)
at Durban. Dutton, Botha,
Gamble and Hamilton-Whitton were at all material times the agents of
all the defendants, alternatively
of Unilever and Tiger Oats, and
acted with the knowledge, consent and approval of the defendants whom
they represented in return
for remuneration.
The
allegations continue to assert that the defendants, in concert with
and acting through Hamilton-Whitton knowingly, alternatively
recklessly, without probable or reasonable cause and in furtherance
of the conspiratorial purpose aforementioned, during or about
1993 to
1999, conspired falsely to allege to the Police Services, the Revenue
Services and the Customs Authorities that second plaintiff
had sold
the “exported oil” on the local market and the plaintiff, as a
consequence, defrauded the customs service and the revenue
authorities by claiming customs rebate and failing to pay VAT on the
exported oil.
Pursuant to the aforegoing the ninth
defendant (Kaplan) deposed to a sworn statement dated 9 February 1994
to the effect that the
second plaintiff had fraudulently caused “the
oil industry” a loss of R63,728 million and to seventh defendant
(Universal Group)
a loss of R8,7 million by the alleged frauds said
to have been committed over a period of time. In so acting and at all
material
times Kaplan knew that the relevant allegations contained in
his said statement were false, alternatively were false in material
respects, alternatively that Kaplan had made the allegations
recklessly, not caring whether they were false or not.
The
allegations continue that, in addition, during the aforementioned
period, June 1993 to April 2001, the defendants enlisted the
services
of a certain Makings, a senior customs official at East London and
the services of Botha, the latter acting as liaison with
Makings and
the services of Hamilton-Whitton and caused Makings on the strength
of the aforesaid false allegations:
(a) To serve on the second plaintiff
under the provisions of the Customs and Excise Act 91 of 1964 an
initial assessment dated 14
June 1993 for customs duties and
penalties on the exported oil in the amount of R5,984 million;
(b) To attach in terms of section 114
of the Customs and Excise Act on 18 June 1993 in the port of Durban
475 tons of crude edible
oil imported by the second plaintiff by
means of a customs lien to secure the assessment aforementioned;
(c) To
issue a re-assessment in respect of the customs duties, penalties and
interest allegedly due on the imported oil which went
into the
manufacture of the exported oil in the amount of R19,025 million on
20 September 1993;
(d) To
caus e the attachment of all the second plaintiff’s manufacturing
equipment in its factory at Mdantsane in terms of a customs
lien
purportedly issued to secure the customs assessment; and to actively
press and pursue false criminal charges of fraud, forgery
and
uttering against the plaintiffs; and in addition, to pass
confidential information to Hamilton-Whitton regarding second
plaintiff’s
source and costs of the imports of crude oil, which
Makings did on 2 December 1996 and 30 January 1997 respectively.
On another front it is alleged that
the eighth defendant (McBain), acting on behalf of Tiger Oats, wrote
to the Minister of Agriculture
on 18 July 1993 a letter, copies
whereof were forwarded to the Minister of Trade, Industry and
Finance, the Minister of Foreign Affairs,
the Director of Trade and
Industry, the Chairman of the Oils Seeds Board and the Deputy
Director-General, Agriculture, in which scurrilous
and false
allegations were published to the said addressees relating to the
plaintiffs and their business affairs.
Concerning the said letter the
allegations continue to assert that such was written by McBain at the
telephonic request of the said
Botha, which request was made through
the said Kaplan on 6 July 1993; that the letter was intended to
convey to, and was so understood
by those to whom it was addressed,
that the plaintiffs were guilty of fraud and corruption by abusing
item 470.03 rebate permits,
fraudulently claiming that imported crude
oil had been exported, whilst in fact they were selling exported oil
on the local market;
and the letter was intended to harm the
plaintiffs in their business operations, their good name and
reputation, and was designed
to pressurize the addressees to take
steps to close down the plaintiffs’ business operations.
On
yet another front, and in furtherance of the unlawful conspiracy,
the defendants secretly secured the services of an attorney,
one
Opperman of East London to:
(a) Make
representations to the Attorney-General of the Ciskei to prosecute
the plaintiffs criminally for their alleged frauds;
(b) Draft
a charge sheet for the purposes of the prosecution and
(c) To
act as prosecutor in the criminal trial to follow.
Opperman’s fees and disbursements
were paid by the defendants. In addition it is alleged that the
defendants had secretly secured
the services and paid the
professional fees of a chartered accountant, a certain van der Ryst,
to furnish a forensic audit report
to support the prosecution
referred to on the basis of false information place before the said
van der Ryst.
The upshot of the aforementioned
actions said to have been performed pursuant to the common purpose
arising from the alleged conspiracy,
the Attorney-General of the
Ciskei, under letter dated 23 October 1997 advised the plaintiffs
that he had decided to arraign the
plaintiffs before the Regional
Court sitting at Mdantsane on counts of fraud, forgery, uttering and
contravention of sections 80
and 84 of the Customs and Excise Act No.
91 of 1964. To that end the Attorney-General utilised the charge
sheet procured by the defendants
through the services of the said
Opperman. Concerning the conduct of the criminal proceedings, the
plaintiffs continue to allege
that the defendants during the period
1993 to 2001 constantly exhorted the Police Services, the
Attorney-General of the Ciskei, the
Customs Authorities and the
Revenue Authorities actively to pursue the aforesaid criminal
charges.
On yet another front and during the
first half of May 1997 the third defendant (du Preez), acting for
Unilever and Tiger Oats persuaded
one Wilkinson, attached to the
Special Investigations Division of the South African Revenue Services
in East London, that the second
plaintiff had been guilty of selling
the exported oil on the local market and was as a consequence liable
to pay VAT on sales of
R10,99 million. The allegation that exported
oil had been sold on the local market was false, but on the strength
thereof Wilkinson
issued on 26 May 1997 an estimated VAT assessment
in terms of section 31(3) of the Value Added Tax Act No. 89 of 1991
for payment
of the amount of R3 753 349,04. Pursuant to the
aforementioned VAT assessment Wilkinson, alternatively other
officials of the South
African Revenue Service, garnished VAT refunds
due to the second plaintiff in the sum of R3 752 349,04. The
garnishing of the VAT
refunds due to the second plaintiff, it is
claimed, took place directly as a consequence of the actions of the
said Botha and du
Preez, representing the Defendants and was intended
to and did in fact have the effect of disrupting the business
activities of the
second plaintiff and removing a substantial portion
of its working capital.
The resultant criminal prosecution of
the plaintiffs commenced on 24 October 1997, alternatively 4 December
1997, at Mdantsane and
was thereafter postponed from time to time.
The said Opperman was appointed by the Attorney-General of the Ciskei
to prosecute charges
on behalf of the State and his fees and
disbursements were secretly funded by Unilever and Tiger Oats. In
that regard the plaintiffs
contend that the prosecution was unlawful,
being a mixed private and public one. Before the trial commenced
McBain specifically requested
a certain Payne, a journalist for a
trade publication, “Food and Beverage Magazine” to give publicity
to the false allegations
made by the plaintiffs at the trial so as to
put “political pressure” on the plaintiffs and for that purpose
wrongfully and unlawfully
furnished the said Payne with a copy of the
affidavit of Makings emanating from the police docket. Payne, it is
said, did so cause
publication of the false allegations in the “Food
and Beverage Magazine”.
In the interim and making use of the .
. . secret organization named “Duzi O”, du Preez, Kaplan, Dutton,
Gamble and Botha met
on numerous occasions, inter alia, on 7 June
1995, 27 September 1995 and 7 November 1995 at Johannesburg, such
meetings having been
convened in furtherance of the conspiracy to
prosecute the plaintiffs and to put second plaintiff out business, as
alleged.
In
addition Le Colle-Brown, Kaplan, Miller and McBain co-operated
through Botha and Opperman to persuade the Attorney-General of the
Ciskei to continue with the prosecution of the plaintiffs and to
accept funding by the defendants of the prosecution by paying
Opperman’s
fees and disbursements. Miller (the fourth defendant),
inter alia, made representations to that end by letter dated 23
February 1998
and, in that regard, McBain expressly approved the
funding of the said prosecution on behalf of Tiger Oats during or
about February
1998.
Subsequently, the plaintiffs allege,
they made available to the Director of Public Prosecutions and the
South African Revenue Service
Authorities, proof establishing lawful
export of the exported oil in question. As a consequence thereof the
criminal prosecution
was withdrawn by the Director of Public
Prosecutions on 25 November 1999 and the South African Revenue
Services conceded during April
2001, the second plaintiff’s appeal
against the aforementioned VAT assessment and withdrew the said VAT
assessment and refunded
to the second plaintiff the VAT refunds
garnished as aforementioned. And, finally, the Customs Service
withdrew the aforementioned
customs assessment and the liens imposed
upon the second plaintiff’s assets and withdrew the customs action
also during April 2001.
The
plaintiffs conclude their particulars of claim by alleging that:
(a) As a result of the unlawful
actions of the defendants, as aforementioned, the second plaintiff
lost its export market and was
obliged as from January 1994 to cease
exporting oil, and, based on a gross profit of R300 000,00 per month
it would have received
from oil exports, it is claimed that second
plaintiff suffered damages calculated at that rate, from January 1994
to April 2001 in
the amount of R26,4 million.
(b) As a result of the criminal
prosecution, the customs action, the VAT assessment and the
garnishing of the second plaintiff’s
VAT refunds, the second
plaintiff’s auditors qualified its financial statements, resulting
therein that the second plaintiff’s
bankers refused to extend
further credit to the second plaintiff and called up the latter’s
overdraft, thus obliging second plaintiff
to close its factory and
cease business operations during the period January 1998 to April
2001 and which business customarily realized
a gross profit
(excluding exports) from such operations in the sum of R500 000,00
per month, causing a loss to the second plaintiff
of R19,5 million.
(c) As a further result the first
plaintiff was injured in his good name and business reputation and
suffered damages to the extent
of R1 million; the plaintiffs’ legal
expenses in defence of the criminal prosecution and in pursuing their
appeal against the VAT
assessment and the customs action in the
amount of R476 000,00 and R233 000,00 respectively; plaintiffs
suffered damages on account
of the said wrongful, unlawful and
malicious prosecution set in motion by the defendants. Such damages
amounting to R500 000,00 each.’
DEFENDANTS’ PLEAS
OF PRESCRIPTION
[4] The first to fifth
defendants filed a special plea of prescription, which reads as
follows:
‘
(a) The
second plaintiff claims damages in the amount of R26 400 000,00,
being an alleged loss of profits sustained as from January
1994 as a
result of the conduct of the defendants.
(b) The second plaintiff further
claims damages in the amount of R19 500 000,00, being an alleged loss
of profits sustained as from
January 1998 as a result of the conduct
of the defendants.
(c) The first plaintiff claims damages
in the amount of R1 000 000,00 being in respect of an alleged injury
to his good name and business
reputation sustained as a result of the
conduct of the defendants.
(d) Each of the aforesaid claims
constitutes a “debt” for the purposes of Section 12 of the
Prescription Act No. 68 of 1969.
(e) In respect of each claim, the
plaintiffs had, respectively, knowledge prior to 30 October 1998 of:
(i) the identities of the first to
fifth defendants; and
(ii) the facts from which the said
debts are alleged to have arisen,
alternatively
could
acquired such knowledge by the exercise of reasonable care.
(f) The Summons and Particulars of
Claim were served on the first to fifth defendants no sooner than on
30 October 2001.
(g) in the premises:
(i) the second plaintiff’s claims in
the sums of R26 000 000,00 and R19 000 000,00 have prescribed;
(ii) the first plaintiff’s claim in
the sum of R1 000 000,00 has prescribed.
WHEREFORE
the first to fifth
defendants pray that the plaintiffs’ said claims be dismissed with
costs of suit.’
[5] The sixth to ninth
defendants filed two special pleas of prescription, the first dealing
with the second plaintiff’s claims
for R26.4m and R19.5m and the
second dealing with the first plaintiff’s claim for R1m. They
repeat in essence the points contained
in the special plea filed on
behalf of the first to fifth defendants.
JUDGMENT IN COURT
A
QUO
[6] The
learned judge said in his judgment that the argument advanced before
him by counsel for the defendants (to the effect that
as all the
events which brought about the damage allegedly suffered by the
plaintiffs had occurred more than three years before the
current
action commenced, any claims arising therefrom had prescribed) lost
‘sight of the effect and reach of the conspiracy alleged
by the
plaintiffs as the moving force behind all the individual injurious
actions complained of by the plaintiffs and singled out
in argument
by the defendants.’
[7] He continued:
‘
Whilst
I have been unable to find any authority in our law, and none were
brought to my attention during argument, actionable conspiracy
is
certainly known to the English Law (cf
Lonhro PLC v Fayed (No.5)
[1994] I All ER 188
). It appears that the leading authority in
that jurisdiction in respect of conspiracy as an actionable tort is
to be found in
Crofter Hand Woven Harris Tweed Company Limited v
Veitch
[1941] UKHL 2
;
1942 AC 435.
In that case the House of Lords held that in
a case where no unlawful means are used, the question whether a
conspiracy was an actionable
tort turned on the predominant purpose
of the conspirators. If is was to advance or protect a legitimate
interest of the conspirators
then it was not actionable.
When, on the other hand, the
predominant purpose was to injure the plaintiff, it constituted an
actionable tort. (See too
Gulf Oil (G.B.) Limited v Page
1987 Ch
327
). Parenthetically it should be pointed out that in
Lonhro
supra
it was held, inter alia,
that damages for injury to
reputation, as opposed to patrimonial loss, are not claimable under
actionable conspiracy.
In my view actionable conspiracy,
being an agreement between two or more persons to do an act which is
intended to injure another
(
Midland Bank Trust Company Limited v
Green
[1981] 2 WLR 1
) is entirely consistent with a delict
actionable under the
actio legis aquiliae,
particularly in the
form alleged by the plaintiffs’ in paragraph 14 of their
particulars of claim,
viz:
“
During
or about the period June 1993 to April 2001 the defendants, acting as
aforesaid, wrongfully, unlawfully and intentionally conspired
to
damage or destroy the plaintiffs’ business operations in the
manufacture and sale of edible oils, to damage the plaintiffs in
their patrimony generally and in their good name and reputation as
more fully set out below.”
Even if the conspiracy alleged by the
plaintiffs were not be regarded as a separate delict, the factual
existence thereof and the
actions performed by the conspirators as
particularised in the plaintiffs’ particulars of claim, said to
have been performed in
execution of the unlawful aims of the
conspiracy, then, in my view, one is not dealing with a single event
which took place on a
particular date, but with continuous unlawful
acts with a common design which occurred and endured for the duration
of the conspiracy
and the achievement of its aims or, conversely, the
ultimate failure thereof.
In the instance the plaintiffs allege
that the unlawful conspiratorial acts were all directed at an abuse
of the legal process by
wrongfully and maliciously setting the law in
motion against the plaintiffs, both criminally and civilly. The
former manifested in
the form of the criminal prosecution detailed in
the particulars of claim and the latter in the form of the customs
action, the VAT
assessment and the garnishing of the second
plaintiff’s VAT refunds, together with the injurious results caused
thereby.
Whilst
it might well be argued, as do the defendants, that most of the
events, e.g. the customs assessment (14 June 1993); the attachment
of
the imported oil (8 June 1993); the Customs Duty Assessment (20
September 1993); the attachment of second plaintiff’s manufacturing
equipment under an alleged customs lien and the civil action
instituted by the Commissioner of Customs and Excise; occurred more
than three years before the current action was commenced, those
events cannot be viewed in isolation, but must be seen as products
of
the alleged conspiracy which, in the examples mentioned, had as its
ultimate aim the achievement of a successful customs action
against
the second plaintiff.
The same reasoning applies,
mutatis
mutandis,
to the alleged events which gave rise to the
steps taken against the second plaintiff by the South African Revenue
Service and the
alleged events which gave rise to the criminal
proceedings instituted against the plaintiffs.
In the case of the latter, the claim
for damages arising from the alleged malicious prosecution cannot, in
my view, be divorced from
the alleged conspiracy which ultimately
gave rise to it and that claim could not be pursued by the plaintiffs
until such time as
the criminal prosecution terminated either in an
acquittal or a withdrawal. For only then would the plaintiffs have
been entitled
in law to institute action (cf
Lemue v Zwartbooi
(1896) 13 SC 403
; Bacon v Nettleton,
1906 TH 138
; Thompson and
Another v Minister of Police and Another
1971 (1) SA 371(ECD).
The rationale appears to be … “because one of the essential
requisites of the action is proof of a want of reasonable and
probable
cause on the part of the defendant, and while a prosecution
is actually pending its result cannot be allowed to be prejudiced by
the civil action.”
See also
Els v Minister of Law and
Order and Others
1993 (1) SA 12(C)
at 17.
Again the same
reasoning applies to the civil proceedings instituted against the
second plaintiff by the South African Revenue Services
and the
Commissioner of Customs and Excise. It is only when those proceedings
were withdrawn, in the case of the Commissioner, and
the appeal
conceded by the South African Revenue Service, that the second
plaintiff was entitled to institute the action relating
to the
malicious institution of those proceedings.
In paragraph 28 of their particulars
of claim the plaintiffs allege that the criminal prosecution was
withdrawn by the Director of
Public Prosecutions on 25 November 1999
and the South African Revenue Services conceded second plaintiff’s
appeal against the VAT
assessment and withdrew that assessment and
refunded the amount of VAT garnished during April 2001 and, finally
that the Customs
Service withdrew the Customs Assessment, the liens
imposed on the second plaintiff’s assets and also withdrew the
customs actions
during April 2001.
The
aforegoing events, having occurred well within the three-year period,
signaled the culmination or conclusion of the conspiracy.
Whether it
terminated in success or failure is open to debate, I venture.’
He
concluded by stating that he was in the circumstances of the view
that none of the claims in the plaintiff’s particulars of claim
had
become extinguished by prescription.
[8] He added:
‘
In
coming to that conclusion, I confess to a measure of uncertainty
concerning the first plaintiff’s claim for damages in the amount
of
R1 million. It will be recalled that in respect of that claim the
first plaintiff alleges that he was injured in his good name
and
business reputation, bearing in mind that he is the managing director
of the second plaintiff, as a result of the malicious actions
of the
defendants. Whilst there is something to be said for the notion that
that claim arose and was actionable well before the commencement
of
the three-year period which immediately preceded the institution of
the current action, and, as a consequence, has become prescribed,
I
conclude, and accordingly hold that it did not. That claim is
inextricably interwoven with the other claims and, like those, also
arose out of the unlawful actions taken pursuant to the
aforementioned conspiracy, which, inter alia, culminated in the
criminal
prosecution and became actionable – in the sense that the
delictual debt became payable – when the criminal prosecution was
terminated
by the withdrawal of the charges as aforementioned.’
RELEVANT STATUTORY
PROVISIONS
[9] Before I discuss
whether the judge was correct in dismissing the pleas of prescription
raised by the defendants it will be appropriate
to set out the
relevant provisions in the
Prescription Act 68 of 1969
, viz
s 10(1)
,
11
(d),
12
(1) and (3) and
15
(1).
[10] They
read as follows:
‘
10(1) 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.’
’
11 The
periods of prescription of debts shall be the following:
. . . .
(d) save
where an Act of Parliament provides otherwise, three years in respect
of any other debt.’
‘
12(1) Subject
to the provisions of subsections (2) [which is not relevant] and (3),
prescription shall commence to run as soon as
the debt is due.
(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.’
‘
15(1) The
running of prescription shall, subject to the provisions of
subsection (2), be interrupted by the service on the debtor
of any
process whereby the creditor claims payment of the debt.’
DISCUSSION
[11] I do not think it is
necessary for the purposes of this case to express an opinion on the
correctness of the judge’s view that
the English tort of actionable
conspiracy ‘is entirely consistent with a delict actionable under
the
actio legis aquiliae’.
I say that because it is clear,
as Viscount Simon LC put it, in
Crofter Hand Woven Harris Tweed
Company Limited v Veitch, supra,
at 439, that ‘the tort of
conspiracy is constituted only if the agreed combination is carried
into effect in a greater or less
degree and damage to the plaintiff
is thereby produced.’ With us also there can be no question of a
delict having been committed
unless the conduct of the defendant of
which the plaintiff complains has caused damage and then all damage
resulting from that conduct,
whether ‘already realized or . . .
merely prospective’, can be claimed (see
Oslo Land Co Ltd v
Union Government
1938 AD 584
at 590), unless an essential element
of the delict complained of (such as the termination of proceedings
in the plaintiff’s favour
in the case of the delict of malicious
prosecution, see
Lemue v Zwartbooi, supra
) has not yet
occurred. Where the delict complained of is a continuing one the
plaintiff will have a ‘series of rights of action
arising from
moment to moment’ (
Oslo
case at 589).
[12] I do not think that
the acts allegedly committed in pursuance of the conspiracy referred
to in the plaintiffs’ particulars
of claim can be regarded as
forming part of what Watermeyer JA described in the
Oslo
case,
at 589, as ‘a continuing injury’. He pointed out that ‘there is
a distinction between what may be regarded as a single
wrongful act
giving rise to one cause of action and a continuing injury causing
damage from day to day which may give rise to a series
of rights of
action arising from moment to moment.’
[13] The case pleaded by
the plaintiffs, as appears from the judge’s summary which I have
quoted above, was that the second plaintiff
sustained damages (i) in
an amount of R26.4m for loss of profits from oil exports in January
1994 and (ii) in an amount of R19.5m
for loss of profits from
operations excluding exports in January 1998, while the first
plaintiff sustained damages in an amount of
R1m for injury to his
good name and reputation. The first plaintiff’s damages must have
been sustained in consequence of the events
which caused the second
plaintiff to lose its export profits and subsequently to close its
business operations with the consequent
loss of its profits from its
remaining operations. (In what follows I shall call the second
plaintiff’s claim for R26.4m ‘claim
1’, its claim for R19.5m
‘claim 2’, and the first plaintiff’s claim for R1m ‘claim
3’.)
[14] The plaintiffs do
not allege that there was a continuing wrong which caused damage from
day to day. I was not able to find nor
was this court referred to any
authority in English law for the proposition that the period of
limitation in respect of damage brought
about by the conduct of
co-conspirators acting in pursuance of a conspiracy to injure only
runs from the date when the conspiracy
came to an end either because
it succeeded in achieving aims or failed to do so – as the judge in
effect found. In my view the
learned judge erred in dismissing the
appellants’ pleas of prescription by invoking the principles
underlying the English and Scottish
cases on the tort of conspiracy
(on which it should be pointed out counsel for the plaintiffs did not
rely).
[15] I am also of the
opinion that the plaintiffs’ counsel’s submissions based on the
decision of this court in
Slomowitz v Vereeniging Town Council
1966 (3) SA 317(A)
cannot be accepted. That case was concerned
with the alleged wrongful and unlawful closure by the respondent
municipality of a street
within its jurisdiction, which, so it was
averred, caused the appellant to sustain damages in an amount of R23
200, being the loss
of rental he suffered because he was unable to
let three shops belonging to him which were situated in the street
that was closed.
This court held (at 328G-H) that the essence of the
appellant’s complaint was that ‘the road was wrongfully and
unlawfully closed
in February 1960, and was wrongfully and unlawfully
kept closed
until 17 December 1963’ (my emphasis). At 331F-G
it was held that the case was not ‘a case where the injurious
effects of a completed
wrongful act (eg., a single blow with a
weapon) have continued, but is one of continuance of the wrongful act
itself’. At 331H
the definition of a continuing injury given by
Salmond (
The Law of Torts,
13 ed, p 779,) namely ‘an injury
was said to be a continuing one so long as it is still in the course
of being committed and is
not wholly past’, was approved. In the
present matter the injuries complained of were not ‘still in the
course of being committed’
and were wholly past, in the case of
claim 1 in January 1994 and in the case of claims 2 and 3 in January
1998.
[16] Counsel for the
plaintiffs also submitted that the particulars of claim encompassed a
number of causes of action. When asked
to state what they were he
mentioned two: unlawful competition and abuse of legal proceedings.
He contended on this part of the case
that, although more than three
years had elapsed after the wrongful and culpable acts complained of
had occurred, the damages claimed
had been suffered and his clients
had knowledge of all the facts they needed to prove the unlawful
competition claim (with the result
that their unlawful competition
claim had prescribed), their claim for damages suffered as a result
of the alleged abuse of legal
proceedings did not prescribe until the
proceedings in question had terminated in their favour, which only
occurred when the criminal
prosecution, the civil action for customs
duties and penalties, the VAT assessment, the customs assessment and
the liens imposed
upon the second plaintiff’s assets were withdrawn
and the VAT refunds which were garnished were refunded to the second
plaintiff,
all of which events took place within the three year
period preceding the commencement of the action. (This contention can
only apply
to the second plaintiff’s claim. It is not suggested
that the first and sixth defendants were competitors of the first
plaintiff.
A cause of action based on unlawful competition was
accordingly not available to the first plaintiff.)
[17] In support of this
contention counsel for the plaintiffs submitted that the ‘termination
in favour of the plaintiff’ principle
applicable in malicious
prosecution matters, which was applied in such cases as
Lemue v
Zwartbooi, supra,
and
Els v Minister of Law and Order, supra,
must be applied to cases where a defendant has maliciously made false
statements to the revenue authorities to the prejudice of another
and
succeeded in inducing the authorities to exercise the draconian
powers vested in them by the revenue legislation against that
other
person and to institute civil proceedings against such person, who
has suffered damages in consequence.
[18] In what follows I
shall assume, without deciding, that the second plaintiff had
available to it a cause of action based on the
abuse of legal
proceedings. In my view counsel for the appellants were correct in
submitting that the contentions summarized in paras
[15] and [16]
above are no answer to the pleas of prescription raised in respect of
claims 1 and 2. This is because what prescribes
in terms of the
Prescription Act 68 of 1969
is a ‘debt’, that is to say not a
‘cause of action’ but a ‘claim’: see
Sentrachem Ltd v
Prinsloo
1997 (2) SA 1(A)
at 15B-16D,
Standard Bank of South
Africa Ltd v Oneanate Investments (Pty) Ltd (in Liquidation)
[1997] ZASCA 94
;
1998
(1) SA 811
(SCA) at 825B-827F and
Drennan Maude & Partners v
Pennington Town Board
1998 (3) SA 2001
(A) at 212E-G.
[19] Claims 1 and 2 were
claims for damages, for loss of export profits and for loss of
non-export profits. It is true that these
claims may well have been
covered by two separate causes of action but the fact that there may
have been these separate causes of
action available to the second
plaintiff does not mean that it had, as its counsel contended,
separate alternative claims.
[20] It follows from what
I have said that, as the second plaintiff knew all that it needed to
establish claims 1 and 2 more than
three years before the action
commenced, the plea of prescription raised against these claims
should have been upheld.
[21] The first plaintiff
is in a different position. As I have said, he did not have a
separate cause of action based on unlawful
competition. He has a
claim for malicious prosecution, in respect of which he claims
damages of R500 000, and to which no plea of
prescription has been
raised. Claim 3, his claim for R1 000 000, must relate to the actions
of the defendants other than those relating
to his prosecution. In
the circumstances it can only relate to the actions of the defendants
in (i) maliciously making false statements
to the revenue authorities
and inducing them to institute civil proceedings against the second
plaintiff for recovery of R19 025
761 and to exercise their statutory
powers of attachment, pursuant to the imposition of customs liens,
and garnishment in respect
of VAT refunds, (ii) ‘publishing’ (in
the sense in which that expression is used in the law of defamation)
the letter to the
South African Minister of Agriculture dated 18 July
1993; and (iii) by bringing about the publication of certain false
allegations
concerning them in the ‘Food and Beverage Magazine’.
[22] In so far as the
averments relating to the publication of false allegations of and
concerning the first plaintiff are concerned,
the first plaintiff’s
claim is clearly based on an alleged defamation which in the light of
what I have already said has prescribed.
But some at least of the
damages to which claim 3 relates may well have been caused by the
institution of the civil proceedings and
the attachments and
garnishment to which I have referred.
[23] Questions debated
before us by counsel included whether our law recognises a delict of
malicious instigation of civil proceedings
in circumstances such as
are here alleged or a delict of malicious instigation of the exercise
of fiscal powers such as those of
garnishment and attachment which it
is said were exercised in this matter.
[24] Counsel for the
sixth to ninth appellants contended that there was no basis in the
case law for the recognition of a delict of
malicious instigation of
civil proceedings or of the exercise of fiscal powers and that there
was no warrant for extending the existing
law regarding the malicious
institution of judicial proceedings to cover the facts alleged in the
particulars of claim. In what follows
I shall make a similar
assumption to the assumption I made in respect of claims 1 and 2,
namely, that the first plaintiff did have
a claim in respect of what
may be called the non defamation aspects of claim 3.
.
[25] Because he knew all
the facts necessary to establish this claim, (on the assumption that
I have made that he had a claim) more
than three years before the
proceedings commenced, the only basis on which he can resist a plea
of prescription is by pointing to
an essential element of his cause
of action which only came into existence less than three years before
the institution of the proceedings.
In the present case he endeavours
to do this by relying on such cases as
Lemue v Zwartbooi, supra,
and
Els v Minister of Law and Order, supra,
and contending
that he could not institute this part at least of his claim until the
customs action and the attachments and the garnishment
had been
withdrawn. The principle underlying the cases relied on was stated by
De Villiers CJ in
Lemue’s
case (at 407) in the following
terms: ‘While a prosecution is actually pending its result cannot
be allowed to be prejudged in the
civil action.’ A different reason
for the rule was given by Solomon J in
Bacon v Nettleton, supra.
He said (at 142-3):
‘
The proceedings from arrest to
acquittal must be regarded as continuous, and no personal injury has
been done to the accused until
the prosecution has been determined by
his discharge.’
Both reasons were cited
with approval by Eksteen J in
Thompson’s
case,
supra,
at
375 B-C.
[26] The reason given in
Bacon v Nettleton
need not detain us long. In this case the
first plaintiff does not allege a continuous wrong nor that he
suffered an injury to his
reputation and good name only when the
customs action and the attachment and garnishment were withdrawn. On
the contrary he says
that the
institution
of the action and
the acts of attachment and garnishment caused the injury.
[27] The reason given in
Lemue’s
case, the need to prevent the prejudging of the
pending action, calls for further consideration. Dr CF Amerasinghe in
his
Aspects of the Actio Iniuriarum in Roman-Dutch Law
says
(at p 22) that:
‘
reasons
of legal policy which have not been expressly formulated seem to have
made the termination of the proceedings in favour of
the plaintiff a
requirement of the
iniuria
[of malicious prosecution].’
Lemue’s
case
indicates what one at least of the policy considerations is: a court
hearing a malicious prosecution case should not be called
on to
prejudge the findings of the criminal court. Equally, in my view, it
is clear that an accused should not be allowed to launch
what amounts
to a pre-emptive strike against a prosecution pending against him by
suing the complainant for damages. Furthermore
it is undesirable that
a party who loses a case before one tribunal should be allowed to
attack the judgment, not on appeal, but
in another court, with the
resultant possibility of conflicting judgments and what one may
describe as judicial discord. A convicted
accused who has not
appealed or whose appeal has failed should not be allowed to assert
in other proceedings that his conviction
was unjust and if he cannot
do so after conviction, he should not be allowed to do before he is
convicted but while the prosecution
is still pending.
[28] I am prepared to
assume for the purposes of this case that this principle also applies
to cases involving the abuse of civil
1
and what I have called fiscal proceedings.
[29] These considerations
only really apply when the judgment in question is or may be given
against the party seeking in other proceedings
to controvert or
anticipate a finding given or to be given against him. They do not
operate as forcefully where the finding in question
is or will be
given against another party. There is no legal basis for preventing a
plaintiff from seeking a finding in a case instituted
by him which
contradicts a finding given or possibly to be given in another case
to which he is not a party.
[30] In the present case
it is not alleged that the first plaintiff was a party to the customs
action or the proceedings flowing from
the attachments and
garnishment. I am accordingly of the view that nothing prevented him
from suing for all the damage he alleges
he suffered to his good name
and business reputation as soon as that damage was suffered. He
concedes that he knew the facts necessary
to establish his claim more
than three years before he commenced his action. It is accordingly
clear that claim 3 in its entirety
has prescribed and that the
appellants should succeed on this point also.
ORDER
[31] The following order
is made:
1. The appeal is allowed
with costs, including those occasioned by the employment of two
counsel, such costs to be paid by the respondents
jointly and
severally, the one paying the other to be absolved.
2. The
order made in the court
a quo
is set aside and replaced with
the following:
‘
The
special pleas of the defendants are upheld and the claims to which
they relate are dismissed with costs including those occasioned
by
the employment of two counsel.’
……………
..
IG
FARLAM
JUDGE
OF APPEAL
CONCURRING
BRAND JA
NUGENT
JA
MLAMBO JA
CACHALIA AJA
1
Cf.
the position in the United
States as set out in Prosser,
Law of Torts,
4ed, 853.