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2024
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[2024] ZAMPMBHC 39
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Cohvest 67 CC t/a Gubevu Management Services and Another v Mpumalanga Department of Public Works and Transport (2257/2018) [2024] ZAMPMBHC 39 (7 June 2024)
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
(MPUMALANGA DIVISION,
MBOMBELA)
CASE NO: 2257/2018
(1)
REPORTABLE:NO
(2)
OF INTEREST TO OTHER JUDGES: YES
(3)
REVISED: YES
DATE: 07/06/2024
SIGNATURE
In the matter between:
COHVEST
67 CC T/A GUBEVU MANAGEMENT SERVICES
First Plaintiff
FORCE
MADUNA
Second
Plaintiff
and
MPUMALANGA
DEPARTMENT OF PUBLIC WORKS
Defendant
AND TRANSPORT
This judgment was
handed down electronically by circulation to the parties and/or
parties’ representatives by email. The date
and time for
hand-down is deemed to be June 07 2024 at 10:00.
JUDGMENT
MASHILE J:
[1]
When this matter served before this Court, the parties had, on an
earlier date, applied
and obtained a court order directing that those
four special pleas raised by the Defendant (“the Department”)
be determined
discretely from the merits such that this Court will
concern itself with those pleas alone. I have noted that although
there are
two Plaintiffs, it is common cause that the Second
Plaintiff has no locus standi to institute this action. As such, I
will henceforth
refer to the First Plaintiff as Cohvest without any
reference to the Second Plaintiff.
[2]
The four special pleas to which I have referred above are:
2.1
res judicata
;
2.2
In terms of Section 12 of the Prescription Act No. 68 of 1969 (“Act
68 of 1969”),
the claim has prescribed;
2.3
Clause 14 of the agreement between the parties provides that any
legal proceedings by either
party against the other must be commenced
within a period of twelve months from the date on which the claim
arose; and
2.4
The six months period contemplated in Section 3 of the Institution of
Legal Proceedings
against certain Organs of State Act 40 of 2000 was
not observed as Cohvest served the notice after the period had
expired.
[3]
The facts from which the special pleas arise are that Cohvest is
suing the Department
for an amount of
R14 047 873.70
. The
claim is founded on an agreement concluded by the parties on 1
December 2011 at Nelspruit, now Mbombela. The contract comprises
the
signed agreement, letter of appointment issued by the Department,
letter of acceptance by Cohvest, bid, all schedules, minutes
of
meetings and annexures. In terms of the contract, Cohvest was to act
as consultant providing training and logistic services
to the
Department regarding intake of new learner contractors to the
Department. Cohvest avers that the intakes of these learner
contractors were over a period of four years with each intake being
for two years.
[4]
In compliance with the contract, Cohvest trained the first intake of
learner contractors
during the period beginning 20 October 2011 and
completed on or before 20 October 2013. Cohvest ceased providing
services to the
Department on or about 20 October 2013. Alleging that
the Department had breached the terms of the contract, Cohvest
demanded payment
on 13 March 2018. I deem it gratuitous to consider
res judicata
because the Department has abandoned reliance
thereon. As such, the Court will proceed to consider the remaining
three special
pleas.
PRESCRIPTION
[5]
Insofar as prescription is concerned, the Department has pleaded that
the claim of
Cohvest is based on a contract which was concluded on 1
December 2011. The Department cancelled the agreement on 20 October
2013
on which date the claim of Cohvest fell due. Cohvest served its
summons on the Department on 23 August 2018, which is more than
three
years after the date on which the claim arose. For the aforesaid, the
Department maintains that the claim has prescribed
in terms of Act 68
of 1969.
[6]
According to Cohvest, the agreement between the parties provided for
two intakes of
learner contractors for two years each. The first
intake started and concluded without any challenges. At the end of
the first
intake, the Department failed or refused to continue with
the second intake of another two years. Cohvest regards the failure
or
refusal by the Department as a breach of Clause 13.4 of the
agreement, which provides that:
“
In
addition to the rights given to it under this clause, either party
may terminate this Agreement if the other party breaches any
terms of
this Agreement and such breach is not remedied within fourteen (14)
days of written notice from the first party specifying
the breach and
stating the intention to terminate the Agreement if the breach is not
remedied.
”
[8]
Cohvest contends that its claim has not prescribed as alleged by the
Department. The
essence of the argument is that while it agrees that
the breach happened upon the Department refusing or failing to
proceed with
the second intake, the debt could not have become due
until it had placed the Department in
mora
and cancelled the
agreement. In other words, prescription would not run until Cohvest
has delivered upon the Department the notice
mentioned in Clause 13.4
of the agreement.
[9]
The Department, on the other hand, asserts that breach occurred on 20
October 2013
when it cancelled and/or failed and/or refused to
continue with the second intake. That date represents the date on
which the debt
arose and prescription began to run. If the Court
agrees with the Department, the debt prescribed in October 2016. The
issue and
service of the summons was therefore out of time by almost
two years.
[10]
Section 12 of Act 68 of 1969 is concerned with the time at which
prescription begins to run.
The Section provides as follows:
“
(1)
Subject to the provisions of subsections (2), (3), and (4),
prescription shall commence to run
as soon as the debt is due.
(2)
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.
(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.”
[11]
In
Mtokonya
v Minister of Police
[1]
,
the Constitutional Court held at paragraph 36 that the facts of which
the creditor needed to be aware do not extend to the knowledge
of the
legal consequences but simply to those facts the creditor would need
to prove in order to prove his claim against the debtor.
Equally, in
MEC
for Health: Western Cape v M C
[2]
the
Court concluded that the required knowledge extends to the minimum
facts necessary to prove a claim and that a debt is due when
it is
owing and payable.
[12]
The question is therefore, when did Cohvest acquire knowledge of the
identity of the Department
and the minimum facts from which its debt
arose. Insofar as the identity of the debtor is concerned, Cohvest
has always known that
the debtor was the Department with which it had
entered into the agreement consequently the identity of the debtor in
this instance
cannot present any difficulties. A more profound
question, however, is What were the minimum facts and when did
Cohvest acquire
knowledge of such facts?
[13]
The answer to that question is found in
a
reply to a memorandum of the Department and an sms by a
representative of the Department on 20 November 2013, wherein Cohvest
stated that:
13.1 It
acknowledged that it had the knowledge of the position of the
Department regarding the continuation of
the contract, specifically
that the Department deemed the agreement to have lapsed.
13.2
Cohvest objected to this view.
13.3
Cohvest made it clear that it considered the approach of the
Department on the matter as breach of the agreement
between them.
13.4
Cohvest attached the contract documents to the letter.
13.5
Cohvest threatened to embark on other measures deemed necessary in
the event that the Department remained
intransigent on the stance it
had adopted.
13.6 In
the event that the Department did not do so, Cohvest would regard it
“business as usual”.
13.7
Cohvest afforded the Department 7 days within which to terminate the
agreement in writing.
13.8
Cohvest was of the opinion the contract was meant to have existed for
a period of four years from date of
commencement; and
13.9
Cohvest had suffered damages or would suffer damages in the form of
rental of office space and retention
of staff in anticipation of
carrying out its obligations in terms of the contract.
[14]
It is apparent that the letter above contains all that was necessary
to institute a claim for
damages the requirements of which are:
14.1
The existence of the agreement and its terms.
14.2
Breach of the terms of the agreement.
14.3
Damages.
14.4
A causal link between the breach and the damages; and
14.5
The loss was not too remote.
[15]
The contents of the letter above make it inexorable to conclude that
on 20 October 2013 Cohvest
was aware of the minimum facts from which
its claim arose and could have commenced these proceedings earlier
than it did to avoid
it becoming prescribed. The assertion put
forward by the Counsel for Cohvest that the prescription of the debt
in this matter ought
to be determined by the expiry of the period
referred to in its letter of 13 March 2018 is untenable for various
reasons.
[16]
Firstly, it would mean that prescription would not begin to run when
a debt becomes due as provided
in Section 12(1). Manifestly aberrant
is Cohvest’s acknowledgment of the breach by the Department on
20 October 2013. For
some reason Cohvest wants to control the date on
which prescription should begin to run. The date on which
prescription begins
to run cannot be left for determination by one of
the parties. This would be absurd as the one party can protract the
onset of
prescription for as long as it suits it. Besides, that
argument is not supported by any case authority, as is evident from
above.
[17]
On the facts of this matter, the debt became due when the Department
refused or failed to allow
the second intake of new learner
contractors. The claim prescribed in 2016 and Cohvest was aware of
this as it issued summons in
the Gauteng Division of the High Court
in which it averred that breach occurred in October 2013. It
therefore comes as a surprise
that it withdrew that action and
instituted fresh proceedings in this Division when it knew very well
that the claim had become
prescribed.
[18]
On the basis of the above, the special plea of prescription must
succeed in consequence of which
I make the following order:
The claim is dismissed
with costs.
LIMITATION OF ACTIONS
[19]
Clause 14 of the agreement between the parties stipulates a period
within which actions by either
party against the other can be
instituted. It lays down that:
“
14.
No actions, regardless of form, arising under or relating to this
Agreement may be brought by either
party more than one year after the
cause of action accrued, except that an action for non-payment may be
brought by a party not
later than one year following the date of the
last payment due to such party hereunder.”
[20]
In this regard the essence of the special plea of the Department is
that Clause 14 described
above limits a period within which either
party may institute an action or launch an application against the
other. The Department
cancelled the agreement on 20 October 2013 on
which date the claim of Cohvest fell due. Cohvest issued and
subsequently served
them upon the Department on 23 August 2018.
Considering that this happened more than the period allowed in Clause
14 of the agreement,
the claim of Cohvest had by the time the summons
was issued prescribed.
[21]
Clauses containing time-bar provisions are a common phenomenon in the
law of contract in this
country if the parties concluded them freely
and voluntarily and that they are not against public policy. In
Barkhuizen
v Napier
[3]
,
the Court stated
that
subject to the considerations of reasonableness and fairness there
existed no reason why time clauses in contracts should not
be
permissible in a constitutional dispensation where the prescripts of
“public policy” are determined in the Constitution
of the
Republic of South Africa.
[22]
In the absence of allegations that the agreement was not freely and
voluntarily concluded or
that it is against public policy, the clause
ought to be accepted. The breach occurred on 20 October 2013 when the
Department refused
and/or failed to allow the second intake of
learner contractors. The one-year period therefore began to run at
that time. To state
the obvious, the claim for Cohvest then
prescribed a year later from that date, which would be during October
the following year.
Even if one has regard to the second part of the
time limitation clause, the claim prescribed in October 2014 as
Cohvest was paid
on or before 20 October 2013. For the aforegoing
reasons, I am constrained to uphold the special plea concerning time
limitation
clause. To that end, I make the following order:
The claim is dismissed
with costs.
THE SECTION 3(2)
NOTICE ENVISAGED IN THE INSTITUTION OF LEGAL PROCEEDINGS AGAINST
CERTAIN ORGANS OF STATE ACT 40 OF 2000 WAS NOT
SERVED WITHIN SIX
MONTHS
[23]
The Department has pleaded in this regard that in terms of section 3
of the Institution of Legal
Proceedings against Certain Organs of
State Act 40 of 2002, Cohvest was obliged to serve the Defendant with
written notice of the
alleged breach of contract referred to in the
particulars of claim, of the facts on which the Defendant’s
alleged liability
arose and of the particulars thereof within six
months of its occurrence. Cohvest failed to serve such notice on the
Department
within six months as prescribed in Section 3 of the Act.
Cohvest is as such, not entitled to prosecute their claim against the
Department.
[24]
This Court has already decided that the breach occurred in October
2013 and that the debt became
due then. Accepting that approach, the
notice should have been served upon the Department on or before 20
April 2014. It follows
that Cohvest failed to comply with the
statutory provision in Section 3 of the Institution of legal
Proceedings against certain
Organs of State Act 40 of 2000. Against
that background, it should stand to reason that this special plea too
must succeed. In
the result, I make the following order:
The claim is dismissed
with costs.
B A MASHILE
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
MPUMALANGA DIVISION,
MBOMBELA
APPEARANCES:
Counsel
for the Plaintiff:
Adv
MS Ngomane
Instructed
by:
Macbeth
Attorneys Inc
Counsel
for the Defendant:
Adv
Kruger SC
Instructed
by:
Slabber
Attorneys
Date
of Judgment:
07
June 2024
[1]
[2017]
ZACC 33
[2]
[2020] ZASCA 165
(SCA) at paragraphs 6 and 7
[3]
CCT72/05)
[2007] ZACC 5