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[2009] ZAGPPHC 90
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Bonfiglio v ATB Chartered Accountants (SA) (20762/2006) [2009] ZAGPPHC 90 (19 June 2009)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT)
Case
number 20762/2006
Date:
19 June 2009
In
the matter between:
EDNA
BONFIGLIO
Plaintiff
and
ATB
CHARTERED ACCOUNTANTS (SA)
Defendant
JUDGMENT
Pretorius
J.
In
this instance the parties agreed that the issues relating to
prescription of the plaintiffs claim - as pleaded in the defendants
special plea, read with the plaintiff's replication should
conveniently be decided separately from the remaining issues in terms
of rule 33 (4) of the Uniform Rules of Court
This
court has only to decide whether prescription has taken place.
Therefore the defendant bears the onus of proving that the plaintiffs
claim became prescribed prior to service of the summons commencing
action against the defendant It was agreed that the defendant
has the
duty To begin
The
plaintiff is a private individual and the defendant is ATB Chartered
Accountants (SA) On 5 April 2002 at Polokwane the plaintiff
entered
into an oral agreement with the defendant, represented by Mr Martin
Venter The defendant undertook to act on behalf of
the plaintiff to
sell her 100% members interest and loan account in the close
corporation known as M KLisser CC to Mr Raath. a
client of The
defendant Both the plaintiff and Mr Raath were the defendant's
clients at the time.
On
5 April 2002 the plaintiff sold M Klisser CC to Mr JW Raath in terms
of a written agreement of sale Mr Raath was introduced to
the
plaintiff by the defendant, represented by Mr Venter.
The
defendant, represented by Mr Venter, drafted the written agreement of
sale of the business The plaintiff entered into the agreement
on
advice from Mr Venter, representing the plaintiff and the defendant.
The defendant is now being sued for breach of contract
in terms of
the oral agreement and alternatively for breach of its duty of care
towards the plaintiff
As
a consequence of the breach by the defendant of its contractual
obligation in terms of the agreement, alternatively the breach
of its
duty of care towards her the plaintiff sold the business to Mr Raath,
notwithstanding the fact That he, Mr Raath, was apparently
not in a
financially sound position to purchase the business, and did not
provide security
The
main complaint is that the defendant advised the plaintiff to sell
the business to Mr Raath without ensuring that Mr Raath had
money or
could provide security for the purchase price
Summons
was issued against Mr Raath on 19 March 2003. claiming the purchase
price, interest and costs. Summary judgment was granted
on 22 May
2003 A warrant of execution was granted on 26 June 2003.
The
sheriff's return stated that on 7 July 2003 the warrant of execution
was served on the wife of Mr Raath which resulted m a
nulla
bona
return.
Mr
Martin Venter testified that he is a chartered accountant and a
partner in the defendant. The practice is in Polokwane. He has
been
practicing as chartered accountant since 1975
He
was the auditor for the closed company, M M Khsser CC, as well as for
Mr Raath and the plaintiff He had advised the plaintiff
to sell the
business or to close it as since 1999 it was not showing any profit.
Mr
Raath was one of his clients Mr Raath enquired from him whether he
knew of a business which he. Mr Raath, could purchase. The
witness
introduced Mr Raath to the plaintiff in September 2000 Subsequently
the plaintiff agreed to sell the business to Mr Raath.
Mr Venter then
drafted a written agreement which was signed by both parties on 5
April 2002. The first payment according to the
agreement, was due on
30 April 2002 The member's interest was transferred to Mr Raath and
the CK2 form was changed to reflect Mr
Raath as the new owner.
According
to the terms of the contract Mr Raath had to pay instalments of R10,
000-00 per month from 30 April 2002 On 7 October
2002 Mr Raath was
requested to sign an admission of guilt after defaulting on some of
the instalments and being requested to do
so after an agreement had
been reached between the parties
Mr
Besterthen cross-examined The witness as follows:
"As
ek dit aan u stel dat die eiseres eers ttaar
fer/jes
gety
het wat befref die koopprys toe sy mnr Raath nie kon uitwtn of nie
kon uitskud nte, nie die geld by horn kon verhaai nie, sal
u daarmee
saamstem? Dis wanneer die verlies mgetree het — Ja.
Stem
fy saam? — Ja
En
dit het gebeur op 8 Julie 2003 wat sy nou 'n nulla bona -retaas gekry
het, of haar prokureur het dit ontvang vanafdie balju —
Dss
korrek.
En
voor dit was daar geen sprake van entge verfies wat betref hierdie
koopprys me? — Korrek "
That
was the only cross-examination of this witness
Mr
Steyn. on behalf of the defendant, tried to rehabilitate the cross-
examination of the witness during re-exa mi nation and tried
to
contain the damage he perceived to have been inflicted to the
defendant's case Mr Venter then testified in contrast to his previous
evidence, that he would have shown that the asset in the plaintiffs
estate was nil on 28 February 2003
This
evidence concluded the defendant's case
Mr
Nel gave evidence on behalf of the plaintiff He is the attorney of
record for the plaintiff who is currently 82 years old. She
was 75
years of age at the time when she and the defendant entered into the
agreement.
On
3 May 2002 Mr Nel. on behalf of the plaintiff, wrote a letter to the
defendant setting out the plaintiff's concerns regarding
the payment
of the purchase price by Mr Raath On 17 July 2002 he addressed a
letter to Mr Raath demanding payment as agreed to
by the parties This
was followed by a letter to the defendant on 7 August 2002 setting
out.
"We
also have instruction to inform you at this early stage, trial our
client wit! hold you liable for at! damages and losses
she may suffer
as a result of the transaction she entered into with Mr J W D Raath
on your advice, and particularly as a result
of the "offer to
purchase"you drew up and assisted our client in signing "
This
was met by a letter from Mr Venter dated 8 August 2002 on behalf of
the defendant, where Mr Venter stated:
"Mnr.
Nel, ek wil dtt duidetik aan u stel dat ek dink u voortydige optrede
en wyse van hantering van die saak die oorsaak is
van die gemors
waarin dit ontaard net met moonttike veriiese vir beide my kliente,
Mev, BonFiglio en Mnr. Raath.
U
is en was nog noost ten voile ingelig oor die hole agtergrond van die
saak me en net my tydens ons gesprek me die Hans gegee om
dii te stel
nie maar wat my betref total voortydig opgetree U sat u hennner dat
ek my ook teen u voorgestelde optrede ustgespreek
het ten tydevan die
gesprek tussen Mev. Bonfiglio, u en myself
"(own
emphasis)
On
7 October 2002 Mr Raath signed an acknowledgement of debt and
undertook to repay the plaintiff an amount of R8000 00 per month
from
31 October 2002. Mr Raath paid the first R3000 00 instalment as
agreed. This fact was conveyed to the defendant by letter
on 11
November 2002
During
December 2002 Mr Raath defaulted again. On 1 April 2002 Mr Raath's
attorneys informed the witness that M Klissers & Co
[Ply) Ltd had
been liquidated
Summons
was issued against Mr Raath as a result of which summary judgment was
granted on 22 May 2003. A warrant of execution was
then applied for
on 23 May 2003 and was issued on 26 June 2003 This resulted in a
nulla
bona
return
on 8 July 2003, as Mr Raath had no movable or immovable property to
attach.
On
20 June 2006 a letter of demand was sent to the defendant on behalf
of the plaintiff
During
cross-examination Mr Nel testified that during May 2002 there was no
indication as to the financial position of Mr Raath.
There was no
indication up until August 2002 that the plaintiff would suffer
damages at all. He realized that Jt was possible for
Mr Raath to make
good his promises and to pay the full amount
According
to the witness this was confirmed by the letter from the defendant on
a August 2002 as set out above.
The
witness reiterated that no steps could be taken before il had not
been ascertained whether Mr Raath could pay. Mr Raath had
to be
excussed before the plaintiff could claim from the defendant as the
plaintiff had no knowledge of Mr Raath's financial position
The
letter from the defendant dated 8 August 2002 could not alert the
plaintiff that Mr Raath could not pay
On
22 January 2003 a further letter of demand was sent to Mr Raath and
on 1 April 2003 the plaintiff was informed that the company
(apparently the closed company had been converted to a company) had
been liquidated The only way that the plaintiff could claim
from Mr
Raath was to issue summons. Mr Nel could not claim on behalf of the
plaintiff before the legal process had been completed,
which was only
when a
nulla
bona
return
was received on 8 July 2002 According to the witness that was the
first time that the plaintiff knew with certainty that
Mr Raath had
no assets and the plaintiff could institute action against the
defendant.
The
two dates which the defendant relies on are 5 April 2002 - the date
the agreement was entered into, and 21 August 2002 when
a letter was
sent to Mr Raath demanding payment to prove the commencement of
prescription
It
is common cause
that
the
plaintiff instituted action on 30 June 2006 Section
12
(1)
of the
Prescription Act 68 of 1969
provides
"(1
Subject to the provisions of subsections (2},(3,)and(4). prescription
shall commence to run
as
soon as the debt is due".
In
Truterand
Another v Deysel
[2006] ZASCA 16
;
2006
(4)
SA
168
(SCA)
at
174 C - D van Heerden J A found:
"
..the term 'debt due' means a debt including a delictual debt, which
is owing and payable A debt is due in thts 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,
"(my
emphasis)
In
Deloitte
Haskins & Sells v Bowthorpe HeUerman Deutsch 1991 {1) 5A 525 AD
at
p 532 van Heerden JA held
"This
means that there has to be a debt immediately claimable by the
creditor or, stated in another way. that there has to
be a debt in
respect of which the debtor is under an obligation to perform
immediately "
and
"It
follows that prescription cannot begin to run against a creditoi
before his cause of action is fully I accrued, le before
he is able
to pursue his claim''
LAWSA
{first reissue) volume 21 par 142 on p 55
deals
with the commencement of extinctive prescription as follows
"Extinctive
prescription commences to run as soon as the debt is due. In the
absence of a definition of the term "debt",
the courts have
held that it must be given a wide and general meaning So. for the
purposes of
section 12(1)
of
Prescription Act of 1969
, the word
"debt" includes any liability arising from and being due
(debitum) or owing under a contract but obviously
includes delictual
debts.'
and
on p.56:
"To
put the matter another way, it has been held that a debt is only due
when the creditor's cause of action is complete
This
notion involves two things, namely that the creditor is in a position
to claim payment forthwith, and that the debtor does
not have a
defence to the claim for immediate payment The casue of action must,
of course, be complete at the stage when a summons
is issued in
respect thereof. The cause of action must similarly be complete at
least when summons is served."
(own
emphasis)
There
can thus be no cause of action for purposes of a delictual action or
for breach of contract until the occurrence of the last
of the
facta
probanda
-
which in this case is the
nulla
bona
return
of service. This was the first time that it was clear that there
would be no money forthcoming from Mr Raath.
The
debt for damages arising from breach of contract becomes due when
loss to the plaintiffs patrimony occurs.
Section
12(1)
of the Act is subject to
section 12(3)
of the Act which
provides:
"(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."
The
relevant dates in this matter are 5 April 2002 the dale the plaintiff
sold her 100% member's interest and loan account in M
Khsser CC The
purchase price of R325 000-00 was payable in monthly instalments from
30 April 2002 Mr Raath made certain payments
and defaulted on several
payments, which resulted in letters of demand being sent to Mr Raath.
Mr
Steyn, for the defendant, argued that the date of calculating the
commencement of prescription should be 5 April 2002, The date
the
plaintiff sold her interest in M Klisser CC o Mr Raath
It
is, however, clear from the letter of The defendant dated 8 August
2002, that the defendant would have regarded any action against
the
defendant at an earlier stage as premature It is set out very clearly
by Mr Venter that any action against him at that stage
would be
premature This was confirmed by him under cross-examination as he
stated very clearly that the loss to the plaintiffs
estate only
occurred when the
nulla
bona
return
of service was received, which was on 8 July 2003.
Mr
Steyn's further argument is that the plaintiff should have gathered
That the purchaser's financial position was precanous and
that the
date of commencement of prescription should, in the alternative be 23
August 2002, the date that a letter of demand was
sent to the
purchaser.
This
date cannot be entertained as the date of commencement of
prescription, as there were further negotiations between the altorney
of the plaintiff and the purchaser, Mr Raath. The plaintiffs
attorneys advrsed the purchasers attorneys on 29 October 2002 as
follows
"You
informed us that your client is busy with tenders and contracts that
will enable him to make payment of either the full
amount outstanding
or larger amounts as from January 2003. Your client must provide full
financial information, as indicted in
the undertaking, with a view of
increasing his instalments "
At
this stage it could not have been clear to the plaintiff that Mr
Raath would not pay the purchase price She
was
re-assured
by this information, as this correspondence was followed by the
agreed payment on 31 October 2002. The summons against
the defendant
was issued on 30 June 2006 The
nulla
bona
return
was obtained on 7 July 2006
The
complete cause of action thus only arose on 8 July 2006. whether on
the basis of damages due to breach of contract or breach
of duty of
care towards the plaintiff
In
Nedcor
Bank
Bpk
v
Regering van die
Republiek
van
Suid
-Afrika
2001(1)
SA
987
on
995 Schultz JA found.
79/
Wat
die Wet nastreef. is 'n guide middeweg tussen die onbiilikhesd. aan
die een kant, dat 'n potensi&te skuldenaar 'n ewigheid
na die
pJaasvind van die gewraakte gebeure sktelik met hofverngtinge bedreig
word en die onbitlikheid, aan die ander kant. dat
'n potensiOte
skutdeiser sy aanspraak op regshuip bloot vanwes tydsverloop verbeur
waar hy sender emge verwyt aan sy kant. me oor
die nodige intigting
besktk om sodanige hofverrigtinge inmiddels van stapel te stuur me."
I
have considered all the evidence carefully. I must find that the
answers which Mr Venter gave under cross-examination was answers
by
an educated witness who was testifying of facts of which he had
specific knowledge and pertained to his expertise regarding
financial
matters No amount of trying to rehabilitate his answers by
reexamination can nullify his original responses.
Having
regard to counsels' arguments, considering the authorities and
weighing the evidence the court has to find that the debt
claimed by
the plaintiff against the defendant became due on 8 July 2003 for
purposes of
section 12(1)
of the
Prescription Act 68 of 1969
Therefore the claim against the defendant has not prescribed.
The
following order is made
The
defendant's special plea
of
prescription
is dismissed with costs
C
Pretorius
Judge
of the High Court
Case
number 20762/2006
Heard
on 23 April 2009
For
the Applicant TWG Besler
Instructed
by Corris Nel
For
the Respondent HH Steyn
Instructed
by Espag Magwai
Date
of Judgment 19 June 2009