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[2012] ZANCHC 50
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Du Plooy v Venter Joubert Inc en Ander (1/2010) [2012] ZANCHC 50; 2013 (2) SA 522 (NCK) (14 December 2012)
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IN
THE HIGH COURT OF SOUTH AFRICA
(Northern
Cape High Court, Kimberley)
Saakno: / Case number:
1/2010
Datum verhoor: / Date
heard:
27 / 11 /2012
Datum gelewer: / Date
delivered:
14 / 12 /2012
In
the matter between:
ALETTA
MARIA MAGTELENE DU PLOOY
........................
Plaintiff
and
VENTER
JOUBERT ING.
.....................................
First
Defendant
HEILA
PISTORIUS
........................................
Second
Defendant
Coram:
Coetzee
AJ
JUDGMENT
COETZEE, AJ
[1]
During or about August 2006,
Aletta
Maria Magtelene du Plooy (plaintiff) instructed the law firm Venter
Joubert Incorporated (first defendant) and Heila Pistorius
(second
defendant), a professional assistant with first defendant (both
defendants hereinafter referred to as “the defendants”)
to pursue and institute a delictual action against the Minister of
Safety and Security (“the Minister”).
[2] Plaintiff’s
proposed claim against the Minister relates to certain injuries she
sustained during a shooting incident at
her home on 7 February 2006
and which occurred during a firearm and firearm-safe inspection
conducted by members of the South African
Police Service.
[3]
On 3 August 2006 the defendants directed a notice on behalf of the
plaintiff to the Minister in terms of s 3
1
of
the Institution of Legal Proceedings against certain Organs of State
Act
2
.
[4] Defendants failed
to pursue the claim and failed to timeously issue and serve summons
on the Minister as a result whereof plaintiff’s
claim against
the Minister prescribed on 8 February 2009.
[5] For failing to
institute timeous action against the Minister, plaintiff, caused a
summons to be served on defendants on 12 January
2010 claming:
Betaling van die bedrag van
R920,000.00
Rente op voormelde bedrag teen
‘n koers van 15,5 % a tempore morae.
Koste van die geding.
The cause of action is
based on a delictual claim for professional negligence.
[6] Plaintiff did not
direct a letter of demand to defendants prior to the institution of
this action.
[7] The damages claimed
by plaintiff consists of the following components, to wit: a) special
damages for loss of past and future
medical expenses and loss of past
and future income amounting to R520,000.00 and, b) general damages
amounting to R400,000.00.
[8] On 13 January 2010
defendants filed a notice of their intention to defend and the matter
was, on 5 September 2012, postponed
for trail on 24 November 2012
[9] On 11 September
2011 defendant delivered a notice in terms of Rule 34(1) of the
Uniform Rules of Court containing the following
tender:
“
Take notice that
defendants hereby tender without prejudice or admission of liability
and by way of an offer in full and final settlement
of the
plaintiff’s claim:
Payment of the sum of
R296,262.94 (TWO HUNDRED AND NINETY SIX TWO HUNDRED AND SIXTY TWO
RAND AND NINETY FOUR CENTS).
Party and party costs as taxed
or agreed, to date of this tender.
”
No tender for the
payment of interest was made.
[10]
At the commencement of the trial counsel for plaintiff, Mrs Erasmus,
informed me that the parties have settled the quantum
of damages.
The
settlement includes plaintiff’s claim for special damages and
general damages. I was informed that, in terms of the settlement
agreement, defendants were to pay to the plaintiff the amount of
R296,262.94 in full and final settlement of the referred to
components
3
of
the claim. Mr Joseph on behalf of defendants confirmed the settlement
as formulated by Mrs Erasmus.
[11]
Both counsel informed me that no agreement could be reached regarding
payment of interest and costs save that Mr Joseph conceded
that
defendants would be liable for
mora
interest
on the said amount calculated from 12 January 2010 (being the date of
service of summons) to 9 November 2010 (being the
date of the Rule
34(1)
4
tender).
[12]
Plaintiff on the other hand submitted that she is entitled to
interest calculated at the rate prescribed in s 1
5
of
the Prescribed Rate of Interest Act
6
from
3 August 2006 (being the date on which the notice was directed to the
Minister
[13]
I was requested to pronounce on the date from which interest is to be
calculated and costs.
[14] Plaintiff’s
counsel submitted that I have a discretion in terms of s 2A(5) of the
Act and urged me to exercise my discretion
in favour of plaintiff and
order defendants to pay to plaintiff interest calculated at the
prescribed rate from 3 August 2006 to
date of payment.
[15] In this regard Mrs
Erasmus contended that in order to exercise my discretion in favour
of the plaintiff, I should take into
account that: (a) defendants
were, from the outset and in particular from the 3
rd
of
August 2006 aware of all facts in order to assess the quantum of
plaintiff’s damages, and (b) plaintiff would have been
entitled
to
mora
interest from at least 3 August 2006 if the claim
against the Minister was properly pursued, and (c) defendants are the
sole cause
for the almost seven years delay in the finalization of
the matter and more importantly, for depriving plaintiff of the
utilization
of her capital.
[16] Mr Joseph argues
that:
The
provisions of s 2A
7
(5)
are not applicable as plaintiff cannot get more than what she has
claimed. He submits that any interest that she might have
been
entitled to if the claim was properly pursued by the defendants
would constitute a resultant damages claim against the defendant
for
their breech of mandate and that this claim for damages should have
been included as an interest component of damages. He
then argues
that it follows that the general principle as provided for in s
2A(2)(a) would be applicable.
He further contended
that, even if he is wrong and I do exercise my discretion I would
not be at liberty to determine the date
of mora to be 3 August 2006
and or any date earlier than the date of summons as s 2A(2)(a)
provides for interest to run either
from the date of service of
demand or service of summons.
He then argues that if
I am to exercise my discretion I have to determine a date of
mora
and as no summons was served on the Minister the only other date
would be the date of the notice. He then submits that the notice
fails to meet the provisions of s 2A(2)(a). This submission is based
on the following two grounds:
The notice does not
constitute a demand in that, in order for a demand to satisfy the
purpose of establishing
mora ex persona,
for the purposes of
s 2A(2)(a) there has to be an unequivocal demand that
performance/payment should be effected on a certain
date; and,
alternatively, and if
it be found that the notice does constitute a demand, that demand
fails to meet the provisions of s 2A(2)(a).
In this regard he
submits that s 2A(2)(a) provides for the demand for payment of the
debt to be a demand directed to the “debtor”.
The
“debtor” in terms of the notice is the Minister and not
the defendants, hence, no demand was directed to the
debtor.
[17] This argument, in
my view, cannot succeed.
Does the interest
claimed constitute a resultant damages claim against the defendants
[18] Plaintiff’s
claim against defendants is not for damages resulting from injuries
sustained as a result of the negligent
acts of the employees of the
Minister, but for loss of her opportunity to claim against the
Minister. These claims are conceptually
different. In this regard
Cachalia JA said the following:
“
The
damages that are to be assessed are the damages suffered by the
plaintiff as a result of the negligence of the defendants in
having
allowed her claim for loss of support against the Fund to become
prescribed. The fact that the quantum of damages suffered
by the
plaintiff may be the same as the amount of her loss of support and
the fact that such damages have to be determined by reference
to her
loss of support do not make the present action an action in which
damages are assessed for loss of support”
8
[19] Although
plaintiff’s claim for special and general damages as a result
of the defendant’s contractual breach may
be the same as her
claim for special and general damages as a result of the Ministers
negligence, her overall patrimonial loss
might differ. Such
difference might be, for example her legal fees paid to the
defendants. To be successful in recovering such
expenses it will have
to be included as a component of damages.
[20] For the reasons
set out hereunder, I am of the view that any interest that she might
have been entitled to if the claim was
properly pursued by the
defendants does not constitute a resultant damages claim against the
defendant for their breach of the
mandate.
[21]
It has been authoritatively stated that, before the introduction of s
2A, no common law principle or statutory enactment provided
for the
award of pre-judgment interest on unliquidated damages.
9
To
place the issue in proper context it is necessary first to refer to
the relevant contents of s 2A which reads as follows:
“
2A. Interest
on unliquidated debts.
—
(1) Subject
to the provisions of this s the amount of every unliquidated debt as
determined by a court of law, ……………..,
shall bear interest as contemplated in
s
1
.
(2)
(a) Subject
to any other agreement between the parties and the provisions of the
National Credit Act, 2005
the interest contemplated in
subs
(1)
shall
run from the date on which payment of the debt is claimed by the
service on the debtor of a demand or summons, whichever date
is the
earlier.
(b) ……………
(3) The
interest on that part of a debt which consists of the present value
of a loss which will occur in the future
shall not commence to run
until the date upon which the quantum of that part is determined by
judgment, ………………
shall for
the purposes of this Act be deemed to be a judgment debt.
(4) ………………...
(5) Notwithstanding
the provisions of this Act but subject to any other law or an
agreement between the parties, a court of
law, ……………….
may make such order as appears just in respect of the payment of
interest
on an unliquidated debt, the rate at which interest shall
accrue and the date from which interest shall run.
(6) …………….
”
[22]
Section 1
of the
Act provides for the situation where a debt, being a liquidated
amount, bears interest and the rate at which the interest
is to be
calculated is not governed by law, agreement or trade custom In these
circumstances the interest rate shall be calculated
at the rate
determined by the Minister of Justice, from time to time.
[23]
In as far as
s 1
do not provide for the calculation of interest on
unliquidated debts, Grosskopf JA, prior to
s 2A
being enacted, in
SA
Eagle Insurance Co Ltd v Hartley
10
,
remarked
as follows:
'If a plaintiff through no fault
of his own has to wait a substantial period of time to establish his
claim it seems unfair that
he should be paid in depreciated currency.
Of course, in respect of many debts this problem is resolved (or
partially resolved)
by an order for the payment of interest, and the
Prescribed Rate of Interest Act 55 of 1975
is flexible enough to
permit the Minister of Justice to prescribe rates of interest which
reflect the influence of inflation on
the level of rates generally
(see
s 1(2)).
Its application is, however, limited to debts bearing
interest
(s 1(1))
; and it is trite law that there can be no mora, and
accordingly no mora interest in respect of unliquidated claims of
damages.
See Victoria Falls & Transvaal Power Co Ltd v
Consolidated Langlaagte Mines Ltd
1915 AD 1
at 31--3, a decision
which has been consistently applied and followed, also in this Court.
It follows that there is no mechanism
by which a court can compensate
a plaintiff like the present for the ravages of inflation in respect
of monetary losses incurred
prior to the trial. In other
jurisdictions a statutory power to award interest is used for this
purpose. See, for example, Cookson
v Knowles (supra) and Wright v
British Railways Board (supra). Whether our Courts should have a
similar power, and what precise
form it should take, is not, however,
something we can lay down. It is essentially a matter of policy which
is for the Legislature
to decide. . . . It is comforting to know that
the Law Commission is at present considering this topic.'
[24] From the above it
is clear that the learned Judge found that the unfairness relates to
a plaintiff being paid in depreciated
currency.
[25]
In terms of
s 2A(5)
I have a discretion, '
(n)otwithstanding
the provisions of this Act'
and,
therefore, notwithstanding the terms of
s 2A(2)(a)
, to make “
such
order as appears just in respect of the payment of interest on an
unliquidated debt, the rate at which interest shall accrue
and the
date from which interest shall run”
.
[26]
After
the coming into operation of
s 2A
, Mpati J (as he then was), in
Adel
Builders Pty Ltd v Thompson
,
11
expressed
himself, approving the remarks made by Grosskopf JA,
12
in
the follows terns regarding the aim of the
s 2A:
“
This section came into
operation on 5 April 1997 and is clearly aimed at alleviating the
plight of a plaintiff as referred to by
E M Grosskopf JA in SA Eagle
Insurance Co Ltd v Hartley (supra), viz that a plaintiff who has to
wait a substantial period of time
to establish his claim through no
fault of his own is paid in depreciated currency. The section confers
a right on a party to be
paid mora interest, to which he was not
entitled before the amendment, on an unliquidated debt.
”
[27]
The purpose of
s 2A
is
therefore, in my view, not to compensate a creditor for his
patrimonial loss but to compensate the creditor’s patrimonial
loss in real monetary value and not in depreciated currency. Interest
in terms of
s 2A
can therefore not be regarded as the “interest
component of the plaintiff’s damages”.
The applicability of
s 2A(2)(a)
[28]
As to the applicability of
s 2A(5)
vis-à-vis
s
2A(2)(a)
, Mpati J
13
(as
he then was) said, with which I respectfully agree, the following:
“
Mr
Buchanan argued that in terms of
s 2A(5)
of the Act a court of law or
an arbitrator or an arbitration tribunal has a discretion to fix the
rate at which interest shall
accrue and the date upon which interest
shall run.
I
agree with Mr Buchanan that such discretion overrides the provisions
of
s 2A(2)
of the Act.
14
(my underlining)
[29]
There is no indication that the legislator intended to limit the
courts discretion to the provisions and/or ambit of
s 2A(2)(a).
If
“
service on
the debtor of a demand or summons
”
is
overridden by the discretion it becomes irrelevant. The date from
which interest is to run should be a date which is, in the
exercise
of the discretion, “
just”
.
[30] I am therefore of
the view that respondent’s submissions referred to in
paragraphs 16(b) and (c) (
supra)
cannot succeed.
The exercising of my
discretion.
[31]
The approach to be adopted by this court in the exercise of its
discretion has been referred to by Howie JA
15
:
Acting in terms of ss (5), it was
open to the Court, in fixing the date from which interest was to run,
to give effect to its own
view of what was just in all the
circumstances . . . . The discretion afforded by
s 2A(5)
was of the
nature referred to in a long line of cases in this Court from Ex
parte Neethling and Others
1951 (4) SA 331
(A) onwards. Plainly, if
parties wish certain facts and circumstances to be weighed in the
exercise of such a discretion they must
establish them. But there are
no facta probanda. No enquiry arises as to whether a necessary fact
has been successfully proved.
Similarly, absence of proof does not
result in failure on any issue. Indeed, there are no evidential
issues to attract any onus.
[32] In exercising the
discretion the court may order interest to run from a date prior to
the date of demand (or service of summons)
or from a date subsequent
to the date of demand (or service of summons) and to such a date or
dates as might be just, having regard
to the circumstances of each
case.
[33] I now turn to
facts and circumstances to be weighed in the exercise of my
discretion.
[34]
The proper pursuing of plaintiff’s claim was entirely left in
the hands of defendants who accepted the mandate in their
capacity as
plaintiff’s legal advisors and in whose competency plaintiff
trusted. I have already referred to the submissions
made by
plaintiff’s counsel
16
.
I agree that those facts and circumstances can and should be taken
into account in exercising my discretion.
[35] Defendants
advanced no facts or circumstances to be weighed in the exercising of
my discretion. There was no suggestion that
the delay in finalizing
the matter almost seven years after plaintiff instructed defendants
to pursue her claim can be attributed
to plaintiff’s conduct,
nor can I find any.
[36] I can see no good
reason, nor has any good reason been advanced, why I should not
exercise my discretion in favour of plaintiff
as I am of the view
that it would not be just to pay her in depreciated currency and to
deprive her of being paid in real monetary
value.
Determining the rate
of interest and the date from which interest should accrue.
[37] Defendants were,
from the outset and in particular from the 3
rd
of August
2006, aware of all facts in order to assess the quantum of
plaintiff’s damages and she would have, on probabilities,
been
awarded interest from at least 3 September2006 being thirty days
after the notice if the claim was pursued by defendants.
[38] I am therefore of
the view that it would be just to order that interest should run from
3 September 2006 to date of payment.
[39] I can see no
reason why plaintiff should not be entitled to the statutory rate of
15,5%.
Costs
[37] There are no
reasons why I should deviate from the general principle that the
successful party be awarded costs and I shall
order thus.
IN THE RESULT I MAKE
THE FOLLOWING ORDER:
1. DEFENDANTS ARE
ORDERED TO PAY TO PLAINTIFF INTEREST AT THE RATE OF 15.5% CALCULATED
ON THE AMOUNT OF R296,262.94 FROM 3 SEPTEMBER
2006 TO DATE OF
PAYMENT.
2. DEFENDANTS ARE
ORDERED TO PAY PLAINTIFF’S COSTS JOINTLY AND SEVERALLY, THE ONE
PAYING THE OTHER TO BE ABSOLVED.
_________________
COETZEE WJ
ACTING JUDGE
For
the Applicant:
Adv. S. Erasmus oio Duncan & Rothman Inc.
For
the Defendant
: Adv. B. Joseph oio Venter & Joubert Inc.
1
Reference
in this judgment to “the notice” is a reference to a
notice in terms of s 3 of Act 40 of
2002.
2
Act
40
of 2002.
3
Paragraph
6
supra.
4
Paragraph
8
supra.
5
See
paragraph 21
infra.
6
Act
55 of 1975 “the Act”.
7
Reference
in this judgment to Section 2A is a reference to section 2A of the
Act.
8
Erasmus
Ferreira & Ackermann v Francis
2010 (2) SA 228
(SCA) at 223 B-E,
paragraph 12
9
Adel
Builders (Pty) Ltd v Thompson
2000 (4) SA 1027
(SCA) on 1031 at
paragraph 11.
10
[1990] ZASCA 106
;
1990
(4) SA 833
(A) at 841G--842A
11
Adel
Builders (PTY) Ltd v Thompson
1999 (1) SA 680
(SE) at
689 G-H
.
12
Paragraph
22
supra
.
13
Adel
Builders (PTY) Ltd v Thompson
1999 (1) SA 680
(SE)
14
At
692 G-H
15
Adel
Builders (Pty) Ltd v Thompson
2000 (4) SA 1027
(SCA)
16
Paragraph
14
supra.