REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case Number: 23229/2018
In the matter between:
In the matter between:
ELLIS STRUCTURAL AND CIVIL ENGINEERS CC Plaintiff
and
EGAN PROPERTY GROUP (PTY) LTD Defendant
Delivered: This judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically by circulation to the parties/their legal
representatives by e -mail and by uploading it to the electronic file of this matter on
Caselines. The date for hand -down is deemed to be 8 July 2025.
JUDGMENT
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: YES
08 July 2025 _________________________
DATE SIGNATURE
KUBUSHI, J
Introduction
[1] This matter turns on the interpretation of the Prescription Act.1 The central
issue being whether the plaintiff’s claims have prescribed. Underlying that issue i s
the question of when the plaintiff’s debt in respect of its claims became due , and
whether the plaintiff’s claims were interrupted by prescription.
[2] The plaintiff, Ellis Structural and Civil Engineers CC, a firm of engineers, has
issued summons against the defendant, Egan Property Group (Pty) Ltd , a property
developer, claiming an amount of R 3 370 166.50 for services rendered in terms of a
Storm Water Agreement and a Roa ds Agreement , and for additional services
pertaining to the Storm Water Agreement and the Roads Agreem ent, rendered per
the oral instructions of the defendant . The agreements are not disputed by the
defendant.
[3] The plaintiff’s claim against the defendant consists of five claims which are
succinctly set out hereunder.
[4] The matter is defended. The defendant pleaded a special plea of prescription ,
and a defence on the merits. The plaintiff , in replication , plead ed the interruption of
the alleged prescription in terms of section 14 of the Prescription Act during or about
June 2015, alternatively , 13 May 2016 .
[5] Per an order of court granted on 26 July 2021 by Moosa AJ, the defendant’s
special plea of prescription has, in terms of rule 33(4) of the Uniform Rules of Court,
been separated from the remainder of the disputes. Before this court, only the issue
of prescrip tion is to be determined and the interruption thereof, if need be.
[6] The defendant accepted that it had the duty to begin in respect of the
separated issue. As regards the issue of the onus , there were two onuses involved in
1 Act 68 of 1969.
this case. There was the pri mary onus that the defendant had in respect of its plea of
prescription. There was, also, the second onus the plaintiff had because of its plea in
replication of the alleged interruption of prescription.
[7] During trial, t he defendant did not lead any evidence and argued the issue of
prescription on the basis that the allegations pleaded by the plaintiff and the
documents on which the plaintiff relied established that the debt claimed by the
plaintiff had prescribed. As suc h, the defendant did not find it necessary to call
witnesses .
[8] The plaintiff , on the other hand, led oral evidence to prove that the claims had
not prescribed, alternatively , that the alleged prescription, if any, was interrupted.
Here, also, t he defen dant did not find it necessary to call a witness in rebuttal.
[9] The pleadings are set out hereunder .
Plaintiff’s Claim
[10] The plaintiff’s particulars of claim are premised on five claims as set out
hereunder.
Claim 1 – Storm Water Agreement
[11] The plaintiff’s allegation is that on or about 30 September 2013 , the plaintiff ,
duly represented by Francois Ellis as its sole member, and the defendant , duly
represented by Russel Egan in his capacity as duly authorised director, entered into
a written service agreement (“the Storm Water Agr eement”).
[12] In terms of the Storm Water Agreement , the plaintiff was to render the
services defined as the duties and responsibilities set out in Annexure “B” of the
Storm Water Agreement. Annexure “B” is said to be the “Guideline Scope of
Services ” published in terms of the Engineering Professions Act 46 of 2000 , in
Government Gazette Number 34875 of 20 December 2011.
[13] In accordance with the terms of the Storm Water Agreement, t he defendant
agreed to pay the plaintiff such professional fees as stated and apportioned in the
Schedule to the Storm Water Agreement for the services to be rendered . The plaintiff
alleged further that the parties acknowledged and agreed that the fees and
disbursements to which the plaintiff w as entitled, w as to be based on the following
parameters: the scope of the project, scope of services, the project programme , the
costs of works, costs of the project, appointment of the consultants and appointment
of contractor. Furthermore, in the event of any material variation of the
aforementioned parameters , the fees and disbursements would be adjusted.
[14] In terms of the schedule to the Storm Water Agreement , read with Annexure
“C” thereof, the plaintiff was to be paid a total amount of R 2 154 739 plus VAT in
respect of services, payable in ten monthly instalments of R 195 886, and with a final
11th instalment payable upon final completion in the amount of R 195 886. It was a
further term of the agreement that the plaintiff w as entitled to render invoices
monthly, taking cogni sance of the apportionment of the fees in the schedule. Such
invoices were to be deemed due and payable by the defendant on receipt thereof .
Should the defendant not pay any invoice rendered by the plaintiff within 30 days
from receipt thereof, the defendant was to be liable for interest for late payment ,
calculated at a rate of 2% above the rate of interest applicable from time to time to
prime borrowers at the plaintiff's bank from due date of payment.
[15] The plaintiff allege d that it duly rendered the services as set out in the Storm
Water Agreement and invoiced the defendant accordingly . Specifically , and without
limitation , the plaintiff allege d that it rendered the standard services of a consulting
engineer listed in paragraph s 3.1 to 3.2.5 , 3.3.7 and 3.3.8 of Annexure “B” to the
Storm Water Agreement .
[16] Of the amount the plaintiff allege d it was owed by the defendant , the plaintiff
alleged that the defendant paid only an amount of R 301 408.60, exclusive of VAT.
In the circumstances, the plainti ff allege d that the defendant was indebted to it in the
amount of R 1 853 303.94 ( exclusive of VAT) , together with interest at the rate of 2%
above the prime lending rate of the plaintiff’s bankers , a tempora morae .
Claim 2 – Roads Agreement
[17] The plaintiff allege d that on 30 September 2013 , it, duly represented by
Francois Ellis as its sole member , and the defendant , duly represented by Russel
Egan in his capacity as duly auth orised director , entered into a written services
agreement (“the Road s Agreement”) . In terms of the Roads Agreement , the plaintiff
was to render the services defined as duties and responsibilities set out in Annexure
“B” of the Roads Agreement. Annexure “B” is said to be the Guideline Scope of
Services p ublished in terms of the Engineering Professions Act 46 of 2000, in
Government Gazette Number 34 875 of 20 December 2011.
[18] In terms of the Roads Agreement, the defendant agreed to pay the plaintiff
such professional fees as stated and apportioned in the schedule to the Roads
Agreement , for the services to be rendered. The parties agreed and acknowledged
that the fee s and disbursements to which the plaintiff w as entitled , was to be based
on the following parame ters: scope of project; scope of services; the project
programme ; the costs of works; cost of the project; appointment of other consultants;
and appointment of contractor. Furthermore, in the event of any material variation of
the aforementioned parameters, the fees and disbursements would be adjusted.
[19] In terms of the schedule to the Roads Agreement , read with Annexure “C” of
the agreement, the plaintiff w as to be paid a total amount of R 385 022 plus VAT in
respect of services, payable in ten monthly instalments of R 35 002, and with a final
11th instalment payable upon final completion in the amount of R 35 002. It was a
further term of the agreement that the plaintiff would be entitled to rende r invoices
monthly, taking cogni sance of the apportionment of the fees in the schedule. Such
invoices were to be deemed due and payable by the defendant on receipt thereof.
Should the defendant not pay any invoice rendered by the plaintiff within 30 days
from receipt thereof, the defendant w as to be liable for interest for late payment ,
calculated at a rate of 2% above the rate of interest applicable from time to time to
prime borrowers at the plaintiff's bank from due date of payment.
[20] The plaintiff allege d that it duly rendered the services as set out in the Roads
Agreement and invoiced the defendant accordingly. Specifically , and without
limitation , the plaintiff alleged it rendered the standard services of a consulting
engineer listed in paragraphs 3.1 to 3.2.5 and 3.3.7 to 3.3.8 of Annexure “B” to the
Roads Agreement.
[21] Of the amount the plaintiff allege d it was owed by the defendant, the plaintiff
allege d that t he defendant paid only an amount of R 159 548.40 , exclusive of VAT.
In the circumstances, the plaintiff allege d that the defendant was indebted to it in the
amount of R 225 473.60 (exclusive of VAT) , together with interest at the rate of 2%
above the prime lending rate of the plaintiff’s bankers , a tempora morae .
Claim 3 – Extension of Term of Appointment
[22] The plaintiff alleged that the defendant appointed Penta con to assist it with
the completion of the construction and related works contemplated in Annexures
“POC1”2 and “POC2”3. The defendant requested the plaintiff to supervise Penta con
in the completion of the construction and related works. And, o n or about 11
September 2013 , the parties , duly represented, orally agreed that the supervisory
portion of the plaintiff’s services would be remunerated in the amount of R 59 196
per month .
[23] The parties agreed and acknowledged that the fees and disbursements to
which the plaintiff w as entitled, w as to be based on the following parameters: scope
of project; scope of services; the project programme; the costs of works; cost of the
project; appointment of other consultants; and appointment of contractor.
Furthermore, in the event of any material variation of the aforementioned
parameters, the fees and disbursements would be adjusted.
[24] The project programme in respect of the works determined that the works
would be completed within a period of ten months from the date of appointment of
Penta con. Conseq uently, payment of the fees and disbursements due to the plaintiff
pursuant to the services rendered by it to the defendant (including specifically , but
2 The Storm Water Agreement.
3 The Roads Agreement.
not limited to , any supervisory services in respect of the works) were payable over a
period of ten mon ths.
[25] However, the project programme was not adhered to by Penta con, resulting in
the project programme being extended by an additional ten months. The plaintiff
allege d that it duly performed the required supervisory services , but the defendant
failed, neglected or refused to pay it the amount due for the services. Consequently,
the defendant is indebted to the plaintiff in the amount of R 591 960.
Claim 4 – Additional Services
[26] As a result of the non -performance of Penta con, the plaintiff alleges that on
the instruction of the defendant , it rendered certain other additional services to the
defendant , which are set out and quantified in the particulars of claim.
[27] The plaintiff is alleged to have designed an “overlay” solution to address
rejected workmanship of Penta con. By so doing, the plaintiff executed instructions
received from the defendant between:
27.1 29 October 2014 and 5 March 2015;
27.2 04 April 2015 and 12 August 2015;
27.3 23 November 2015 and 08 Decembe r 2015; and
27.4 11 January 2016 and 28 February 2016.
The above instructions were provided under the Storm Water Agreement.
[28] According to the plaintiff , the total remuneration due to it in respect of the
additional services amounts to R 642 575.21 (VAT inclusive) . Despite demand,
alternatively , demand herewith, the defendant is said to have failed, neglected or
refused to pay the said amount.
Claim 5 – Additional Services for Roads
[29] The plaintiff’s allegation is that between 18 October 2014 and February 2015 ,
he executed instructions from the defendant by designing an additional sewer
connection to accommodate incorrect design information received from the local
authority . The said instructions were provided under the Roads Agreement.
[30] In respect of the said services rendered , an amount of R 56 825.51 became
due and payable. Despite demand, alternatively , demand herewith, the defendant is
said to have failed, neglected or refused to pay the said amount.
Defendant’s amended special plea
[31] The defendant , in its plea , raised a special plea of prescription and a defence
on the merits. As indicated , only the special plea is dealt with in this judgment. The
defendant , in its special plea , raised the following defence in respect of:
Claim 1
[32] The allegation is that the plain reading of the plaintiff’s claim indicates that:
32.1 The latest date at which the plaintiff commenced rendering services in
terms of the Storm Water Agreement was 30 September 2013. The
latest date at which payment of the amount of R 1 657 451. 40 (one
million six hundred and fifty seven thousand, four hundred and fifty one
rand, forty cents) — an amount calculated as the difference between
the ten monthly instalments of R 195 886. (one hundred and ninety five
thousand, eight hundred and eighty six rand) and R 301 408. 60 (three
hundred and one thousand, four hundred and eight rand, sixty cents)
being the amount already paid by the defendant to the plaintiff — was
due and payable to the plaintiff by the defendant was 31 July 2014. The
project never reached final completion, and the 11th instalment of
R 195 886 (one hundred and ninety five thousand, eight hundred and
eighty six rand) never bec ame either due or payable.
32.2 The plaintiff's claim relates to contractual payment for services
rendered, due and payable by no later than 31 July 2014 , alternatively ,
on or before 8 April 2015. Prescription on the above claim would have
commenced running, at the latest, on 1 August 2014, a lternatively , on 8
April 2015. Summons in respect of the above claim, under case
number 23229/2018 , was delivered on 9 April 2018.
32.3 The defendant accordingly pleads that the plaintiff ’s Claim 1 against the
defendant, before this Honourable Court under case number
23229/2018, had already prescribed at date of institution of
proceedings by the plaintiff against the defendant. WHEREFORE , the
defendant prays that the plaintiff ’s claim against the defendant be
dismissed with costs.
Claim 2
[33] It is alleged that the plain reading of the plaintiff's claim indicate s that:
33.1 The latest date at which the plaintiff commenced rendering services in
terms of the Roads Agreement was 30 September 2013. The latest
date at which payment of the amount of R 225 473. 60 (two hundred
and twenty five thousand, four hundred and seventy three rand, sixty
cents) was due an d payable to the plaintiff by the defendant was 31
July 2014.
33.2 The plaintiff's claim relates to contractu al payment for services
rendered, due and payable by no later than 31 July 2014 , alternatively
on or before 8 April 2015. Prescription on the above claim would have
commenced running, at the latest, on 1 August 2014, alternatively , on 8
April 2015. The abo ve date is a date more than three years after the
period of prescription expired.
33.3 The defendant accordingly pleads that the plaintiff's Claim 2 against the
defendant, before this Honourable Court under case number
23229/2018, had already prescribed at date of institution of
proceedings by the plaintiff against the defendant . WHEREFORE , the
defendant prays that the plaintiff's Claim 2 against the defendant be
dismissed with costs.
Claim 3
[34] The allegation is that the plain reading of the plaintiff's claim indicate s that:
34.1 The latest date at which Penta con should have completed the project in
accordance with the original project programme was 31 July 2014.
Alternatively , to the above, in the event that the plaintiff's claim is for
ten (10) monthly payments during an extended project programme
commencing J uly 2014, the latest date at which the Penta con should
have completed the project in accordance with the extended project
programme was 31 May 2015. The plaintiff claims a monthly payment
of R 59 196 for each of the eight months from August 2014 to March
2015, totalling R 473 568.
34.2 On the plaintiff's version, eight payments of R 59 196 - full value of
R 473 568 being for the eight month period between August 2014 to
March 2015 of the exte nded programme period - were due and payable
to the plaintiff by no later than 31 March 2015. Prescription on the
above portion of the claim would have commenced running on or
before 8 April 2015. Summons in respect of the above claim, under
case number 23 229/2018 was delivered on 9 April 2018.
34.3 The defendant accordingly pleads that R 473 568 (four hundred and
seventy three thousand, five hundred and sixty eight rand) of the
plaintiff's Claim 3 against the defendant, before this Honourable Court
under case number 23229/2018 - being the eight month period
between August 2014 to March 2015 of the extended programme
period — had already prescribed at date of institution of proceedings by
the plaintiff against the defendant. WHEREFORE , the defendant prays
that the portion of the plaintiff's Claim 3 relating to the eight month
period between Augu st 2014 to March 2015 of the extended
programme period, against the defendant, be dismissed with costs.
Claim 4
[35] The allegation is that p rescription on any service rendered by the plaintiff prior
to 31 March 2015, would have commenced running, at the latest, on 01 April 2015,
and become prescribed three years later on 31 March 2018. Summons in respect of
the above claim, under case number 2 3229/2018 , was delivered on 9 April 2018.
The above date is a date more than three years after the period of prescription
calculated from 31 March 2015.
[36] The defendant accordingly pleads that the portion of the plaintiff's Claim 4
against the defendan t, before this Honourable Court under case number 23229/2018
- relating to the services rendered prior to 31 March 2015 - had already prescribed at
date of institution of proceedings by the plaintiff against the defendant.
WHEREFORE , the defendant prays th at the portion of the plaintiff's Claim 4 relating
to services rendered prior to 31 March 2015, against the defendant, be dismissed
with costs.
Claim 5
[37] It is alleged that p rescription on any service rendered by the plaintiff prior to
31 March 2015, would have commenced running, at the latest, on 1 April 2015, and
become prescribed three years later on 31 March 2018. Summons in respect of the
above claim, under case number 23 229/2018 , was delivered on 9 April 2018. The
above date is a date more than three years after the period of prescription calculated
from 31 March 2015.
[38] The defendant accordingly pleads that the plaintiffs Claim 5 against the
defendant, before this Honourable Court under case number 23229/2018, had
already prescribed at date of institution of proceedings by the plaintiff against the
defendant. WHEREFORE , the defendant prays that the plaintiff's Claim 5 against the
defendant be dismissed with costs.
Replication by the plaintiff
[39] In replication to the defendant’s special plea of prescription , the plaintiff
denies that any of its claims has prescribed as alleged by the defendant in its sp ecial
plea.
[40] In amplification of the aforesaid denials , and without detracting from the
general nature thereof, the plaintiff pleads that if it is found that prescription
commenced to run on the date pleaded by the defendant, or any other date longer
than three years prior to the date of service of the summons herein, the running of
prescription was interrupted in terms of the provision s of Section 14 of the
Prescription Act during or about June 2015, alternatively , 13 May 2016 , as pleaded
hereunder .
[41] During or about June 2015 , and at or near Pretoria, the plaintiff, represented
by Francois Ellis as its sole member, and the defendan t, represented by Russel
Egan in his capacity as duly authorized director, entered into a further oral
agreement, the express, alternatively implied, further alternatively tacit terms and
conditions of which were as follows:
41.1 The defendant admitted and acknowledged its indebtedness towards
the plaintiff and that it was unable to pay the amounts listed in claims 1
to 5 of the particulars of claim to the plaintiff , and would not be able to
pay such amounts, irrespective of when they b ecame due, until, at the
earliest:
41.2 the defendant had secured the release of funds held in trust as
guarantee for the defendant's performance of its contractual or legal
obligations towards the City of Tshwane , alternatively ;
41.3 the defendant was able to access funds held in trust pursuant to a sale
of business/sale of assets agreement entered into between the
defendant and third parties.
[42] The plaintiff agreed to suspend all demands and forego the institution of any
legal proceedi ngs in respect of the amounts listed in claims 1 to 5 of its particulars of
claim, irrespective of when payment thereof became due, until the date of the
occurrence of either of the events in the paragraph s above.
42.1 During or about March 2017, the defendant, acting through its director
Russel Egan, repudiated the aforesaid oral agreement by
communicating and indicating through its conduct to the plaintiff,
represented by Francois Ellis, that:
42.2 the defendant denies its indebtedness towards the plaintiff, in the
amounts as claimed herein or any other amount or amounts;
42.3 the defendant denies the existence of the oral agreement.
[43] The plaintiff accepted the defendant ’s repudiation and cancelled the oral
agreement, alternatively , cancelled same with service of the summons herein and
claims payment of the amounts reflected in claims 1 to 5 of the particulars of claim.
[44] On or about 13 May 2016 , and at or near Pretoria, the defendant , duly
represented by Russel Egan, alternatively represented by its attorneys of record,
Adams and Adams, further alternatively represented by Pat Ellis SC, further admitted
the defendant's liability towards the plain tiff that:
44.1 the defendant, in arbitration proceedings between it and Penta con,
claimed damages from Penta con constituted by amounts due and
owing by the defendant to the plaintiff;
44.2 the defendant, as part of its statement of defence in the
aforementioned arbitration, filed Annexure "R1” hereto, as Annexure
"SOD7".
[45] In the premises , the defendant acknowledged its liability to pay the plaintiff
during or about June 2015 and, again, on 13 May 2016.
[46] In the premises, and insofar as any of the amounts claimed in Claims 1 to 5
fell due on the dates alleged by the defendant, alternatively , as other date longer
than three years prior to date of service of summons herein, the running of
prescription was interrupted in terms of the provisions of Section 14 of the
Prescription Act, during or about June 2015, alternatively , 13 May 2016.
WHEREFOR E, the plaintiff persists with its claims.
Defendant’s argument
[47] In his oral argument on the issue of when the debts became due, counsel for
the defendant strengthened his argument by reliance on the judgment of the
Constitutional Court in Trinity As set Management (Pty) Limited v Grindstone
Investments 132 (Pty) Limited , (“Trinity ”).4 Counsel referred to the majority judgment
penned by Justice Cameron, where , at paragraph 96, referencing Deloitte Haskins ,5
that court said that “ prescription shall commence to run as soo n as the debt is due ”,
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. . . . It follows that, prescription
cannot begin to run against the creditor before his cause of action is ful ly
accrued , i.e. before he is able to pursue this claim . . . .’ (footnote omitted)
[48] Counsel’s argument in that regard was that that should be the starting point.
The question being whether the plaintiff can pursue his claim, and when is h e liable
to do so. Counsel, also referred to what was said by Justice Cameron,6 referencing
Truter,7 that a debt is due –
‘when a 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 claim .’ (footnote omitted)
4 2018 (1) SA 94 (CC) at para 96.
5 Deloitte Haskins & Sells Consultants (Pty) Ltd v Bowthorpe Hellerman Deutsch (Pty) Ltd 1991 (1) SA
525 (A) at 532F – J.
6 Above n 4 at para 9 7.
7 Truter and Another v Deysel 2006 (4) SA 168 (SCA) at para 16 .
[49] Therefore, according to counsel, the fundamental question when looking at
the plaintiff’s claim, is, what were the facts that the plaintiff was required to prove in
order to make the claim , and when were the set of facts in place.
[50] Counsel asserted that even though Trinity dealt with loans payable on
demand, the concept used there is the same, because what the court said in Trinity
is that, ordinarily, a loan that is made where it is silent as to payment terms, is not
payable on demand , but payable immediately . The question that was raised being
whether demand forms part of the cause of action. In other words, whether the
demand starts the clock running, or whether the clock starts running when the
plaintiff is able to make demand. According to counsel, there i s a difference between
the question whether the loan is immediately payable and therefore, the clock is
running, and the plaintiff then makes demand as and when he sees fit, and whether
the clock start s running when the plaintiff makes demand and then pres cription starts
to run.
[51] In this regard, counsel referred to paragraph 102 of Trinity , where Justice
Cameron states the following:
“[102] The practical effect is this . When suing for payment the creditor does n’t
need to allege a demand : demand is not part of the plaintiff’s cause of action.”
(footnote omitted)
[52] In his submission, counsel argued that his colleague is going to argue that an
invoice in the current case needed to be issued, and that, in that event, the court will
have to decide whether an invoice forms part of the cause of action. In other words,
is it a necessary part of the cause of action for an invoice to have been issued, or
was this plaintiff entitled to sue at the same time that he issued the invoice. The
answer, co unsel submitted, is clear and the principle is established in paragraphs
104 to 105 in Trinity , where Justice Cameron remarked thus:
“[104] Here, of course, the loan was not ‘payable on demand ’ but rather
payable 30 days after demand. Does the additional 30-day period afforded to
the debtor to repay change anything? Does it take the agreement outside the
law applying to loans ‘payable on demand ’? No. The 30 -day period makes no
difference. The point of the jurisprudence is that the creditor has the unilateral
power to demand performance form the debtor at any time from advance - not
that, following demand, the debtor must pay immediately (‘on demand’) or 30
days later. In both instances, the creditor has the sole power to demand
performance at any time.
[105] It is this fact - that the creditor has the exclusive power to demand that
performance be made when the creditor so chooses - that has given rise to
the general rule applying to loans ‘payable on demand ’, namely the
prescription begins to run when the debt arise s, unless there is a clear
indication to the contrary.” (footnote omitted)
[53] The submissi on by counsel is that the principle here is that when the question,
when was the debt due , is asked, it is not what procedure needed to be followed.
According to counsel, the question is, did it lie in the sole power of the creditor, in
this case the plain tiff, to demand performance? And was there anything else that
needed to happen before the plaintiff could demand performance?
[54] The issuing of the invoice, according to counsel, is the procedure that was to
be followed in this case. The submission bein g that in terms of the agreement, the
ability to issue the invoice was something that fell solely within the power of the
plaintiff. And, where the ability to issue the invoice lies solely within the power of the
plaintiff, the plaintiff canno t rely on his own failure to issue the invoice to delay
prescription. That is the principle - the creditor cannot unilaterally delay prescription
when he has the power to claim. That is the very purpose of prescription, counsel
argued.
[55] A further argument raised by counsel was that the plaintiff’s reliance on clause
13.1 and 13.2 of the agreement, is misplaced. According to counsel, clause 13.1 ,
which entitles the plaintiff, as consultant, to render invoices, places the power to do
so in the hands of the consultant. The defendant’s counsel submitted that the
plaintiff’s suggestion that the use of the word “entitled” should not be read as
“obligated” because it is only where the consultant is obligated to issue the invoice,
that this principle would apply, is misguided. Counsel submitted, in that regard, that
cannot be correct becau se the Constitutional Court has told us that the question lies
in who has the power to issue it, and the power , in this case , lies in the plaintiff and
the entitlement indicates that that power is given to the plaintiff in this agreement.
Consequently, it is counsel’s argument that clause 13 .1 is of no assistance to the
plaintiff’s case. It certainly does not assist the plaintiff to say that he could withhold
invoices and thereby delay prescription.
[56] Counsel argued further that the reliance by the plai ntiff on clause 13.2 , which
stipulates that the client shall be liable for interest for late payment, does not help the
plaintiff at all. The fact that interest is payable 30 days later does not assist the
plaintiff at all, since the debt is due when the invoice is issued, and the right to issue
the invoice lies solely with the plaintiff .
[57] The question, as counsel stated, was answered in paragraph 111 in Trinity ,
when Justice Cameron remarked as follows:
“[111] The first judgment relies on the loan agreement ’s interest clause to say
that the demand required delayed prescription. The suggestion is that ,
because the parties clearly intended interest to be charged from when the
loan was paid over, but that interest was ‘due and payable ’ only when the loan
capital was ‘due and payable ’, prescription was delayed. To me, that does n’t
wash. ‘Charged ’ in clause 2.4 does n’t entail that the word ‘due’ in 2.3 should
be afforded a heightened significance. It is conceivable that , as with loan
capital , interest would be ‘due’ for purposes of Prescription Act on advance,
but would only be repayable along with the loan capital. Indeed , interest
usually only starts running from when a is ‘due’. On the first judgment’s
approach, interest would only start running from when demand was made, as
this would be the point at which the debt becomes ‘due’. That is commercially
unsound . And hence impro bable.” (footnotes omitted)
[58] Counsel’s proposition is that the court in Trinity was dealing with a different
clause and a different contract, but what it says is that the interest clause cannot be
used to change the meaning of the debt and when the debt was due. To reinforce
this proposition, counsel referred to paragraph 122 of Trinity, where the court
remarked that –
“[122] What prescribes i s Trinity’s right to claim payment . And that right is
unaffected by when payment must actually be made. This means that Trinity
had the right to claim payment immediately, even tho ugh Grindstone had 30
days to pay.”
[59] Relying on that passage, counsel pointed out that what prescribed was
Trinity’s right to claim payment. Counsel submitted that there can be no dispute that
even on his own case, the plaintiff had a rig ht to claim payment at the end of every
month, and that is the right that has prescribed.
[60] The proposition by the defendant’s counsel is that there can be no dispute
that on the plaintiff's claim , the debt which it claims, arose monthly f rom September
2013 to July 2014. In each month, the plaintiff was entitled to issue an invoice, which
meant it had the power to do so, and so prescription in respect of each of those
monthly debts began to run immediately the plaintiff had that right. And, as all of
those monthly debts were due, they were due before 31 July 2014: they were due
before the prescription date of 8 April 2015 , and consequently , are extinguished by
prescription . And, that is what prevails in relation to Claim 1, so it was argued.
[61] As regards Claim 2, counsel argued that it follows exactly the same format as
Claim 1. The contention was that this is so because the terms of the Roads
Agreement are the same as those of the Storm Water Agreement. All of these debts
were also due on or before 31 July 2014 , and are extinguished by prescription, so
the argument went.
[62] A further proposition by counsel was that Claim 3 follows the same principles,
as well. The co ntention being that the claim was alleged to have arisen out of an oral
agreement, but it covers similarly a period from 2013 to 2014 and that has
prescribed for the same reason.
[63] Claims 4 and 5, as is suggested by counsel, deal with claims for additi onal
services. The claims rely on the terms of the same agreements, and in doing so,
they rely on the same payment terms that regulate the payment under the main
agreements. This is the entitlement by the consultants to render invoices monthly,
taking cogn isance of the apportionment of fees. As such, to the extent that there
were additional services rendered, the right to charge for those services arose
monthly. This is so, as counsel submitted, because the clause that the plaintiff would
have to rely on, i f it relies on those agreements, is Clause 13 , which entitles it to
render invoices monthly. No other clause could be found that would allow plaintiff to
do so.
[64] With regard to Claim 4, the debt that is relevant for prescription is the cl aim in
paragraph 23.1 of the particulars of claim only, where the plaintiff alleges it designed
an overlay solution to address rejected workmanship of Penta con, and in so doing,
executed instructions received from the defendant between 28 October 2014 and 3
May 2015. Mr Ellis confirmed during his testimony that the designed calculations, his
strength calculations , and the drawings , had been prepar ed at this time.
[65] Counsel contended that the argument by the plaintiff’s counsel that the
referral of Mr Ellis to the two emails which came in April 2015, that because they
came on 22 April 2015, they postdate the prescription date, is without merit. This is
so, counsel said, because there was no evidence that the plaintiff carried out this
work before 3 May 2015 , as pleaded.
[66] For this claim, counsel pointed out that the quantum that is claimed by the
plaintiff in paragraph 24 of the particulars o f claim is for 64 hours by an engineer and
16 hours by a technician, but the plaintiff has not set out when those hours were
spent. Consequently, in the heads of argument , counsel formulated a relief asking
for an order that the defendant’s special plea of prescription against the claim made
in paragraph 23.1 related to the design for an overlay solution to address the
rejected workmanship, be upheld. Counsel contended further that if it is found that
there is a potential for certain hours to have been expe nded after 31 March 2015,
then that can be excluded from the order.
[67] The submission by counsel is that Claim 5 relies on the terms of the Roads
Agreement. According to counsel, there was no evidence led on this claim at all , and
on its terms alone, th e plaintiff claims that all of this work was done before the
prescription date. Paragraph 28.1 of the particulars of claim says the plaintiff
executed instructions received from the defendant between 18 October 2014 and
February 2015. The contention, as su ch, is that all work done up to February 2015 is
before April 2015, and therefore , is extinguished by prescription.
[68] In conclusion, counsel argued that the plaintiff had the right, on his pleaded
case, to issue the invoices at the end of every month , and consequently , its failure to
have done so does not help its case. Counsel argued that counsel for the plaintiff , in
argument in court, did not and could not dispute that the plaintiff was entitled to issue
the invoice each month, as contended by the defendant.
Plaintiff’s argument
[69] Counsel for the plaintiff argued that the only indication as to the debt being
due is to be found in Clause 13.1 of the agreements . He, however, submitted that
that clause must be read together with Clause 13.2 , which talks about the interest
payable. According to counsel , when th e payment is due ties in with when the
interest starts running. He , in that regard, referred to Schedule “A” of the
agreements , which state s that “ the professional fees shall be apportioned as follows:
equal instalments on a monthly basis over the duration of the project and a payment
upon final completion as per Annexure “B” . Equal portions, according to counsel,
should not be based on the indication of project and payment upon completion as
per Annexure “B”. Annexure “C” , which sets out the cashflow , must also be
considered, taking into account the basis of how the Schedule was prepared and
how the cashflow was calculated with reference to the programme provided by the
appointment of Penta con and how the terms of payment were determined.
[70] Counsel’s pr oposition was that when consideration is to be given to when
payment fell due and compared to where there are demands, the creditor has in his
hands purely the power to decide when he was going to pull the trigger , and the
general principle that applies to debts is that debts are payable on demand. In
support of this proposition, counsel referred to paragraph 106 of Trinity , where it is
said that:
“[106] So the question is whether this loan agreement gives us enou gh signs
to justify dumping the general principle that in loans ‘payable on demand ’
prescription begins to run as soon as the money is paid. And our starting
premise is that the parties’ contract fixes when a contractual debt becomes
due.” (footnote omitte d)
[71] Counsel conceded that the principle enunciated therein applies to loans
payable on demand. He, however, submitted that the principle remains the same as
far as the contractual position is concerned, where the creditor unilaterally decide s
when to pull the trigger, and what the effect is of what the parties agree upon, and
how it is dealt with.
[72] Furthermore , Counsel contended that the problem in Trinity was that the
agreement in itself was ambiguous as to when payment became due, which is
distinct from the current agreement which has a telling sign of when payment is due.
According to counsel, when an agreement provides when a debt is due, that needs
to be followed, and the parties may , for various reasons , agree on certain terms and
those terms will then apply.
[73] The submission by c ounsel was that in the present instance, the undisputed
evidence is that there was no invoice rendered in time. The firs t invoice rendered by
the plaintiff was rendered on 20 October 2013, the invoice was dated 30 September
2013. There were two further invoices rendered on 22 November 2013. Then there
was a request from Mr Egan in an email of 29 November 2013, requesting Mr Ellis to
split those invoices into the portion that the Council would be liable for. Importantly,
counsel argued, payment was made of two invoices.
[74] According to counsel, the invoicing was clearly an important aspect in the
payment and how the partie s implemented the agreement. Not only that, but the
format of the invoices was also of utmost importance to Mr Egan. He insisted on the
invoices being split. No payments were made unilaterally by the defendant prior to
invoices being submitted. That, couns el argued, is the question that was not
answered and that he did not have the benefit of cross -examining Mr Egan on.
[75] When arguing, counsel raised the question why the defendant effected
payment at the end of October and not at any other time, because the defendant
says the money became due immediately. Why insist on the invoices being split for
the purposes of the defendant. A further important aspect in Mr Ellis’ evidence, as
counsel sought to argue, is that the invoices would have been accompanied b y
payment certificates, and, as such, there was a whole process that was applied.
[76] In reinforcement of his argument, counsel referred to the matter of Capitec
Bank Holdings Limited & Another v Coral Lago on Investments 194 (Pty) Limited &
Others (“Coral Lagoon investments”),8 from paragraphs 51 and 54, where the
following is stated:
“[51] Most contracts , and particularly commerci al contracts , are constructed
with the design in mind , and their architects choose word s and concepts to
give effect to that design. For this reason, interpretation begins with the text
and its structure. They have gravitational pull that is important. The
proposition is that context is everything is not a license to contend for
meanings unm oored in the text and its structure. Rather, context and purpose
may be used to elucidate the text.”
[77] That court, further, referred to the matter of University of Johannesburg9 as to
how parties implement the agreement. The court there concludes in paragraph 54:
“[54] In conformity with University of Johannesburg , I do think the evid ence
must be judged relevant and considered. How the parties to the subscription
agreement conducted themselves after the conclusion of the agreement may
have some relevance for the purpose of deciding upon the meaning of clause
8.3.”
8 2022 (1) SA 100 (SCA).
9 University of Johannesburg v Auckland Park Theological Seminary and Another 2021 (6) SA 1 (CC).
[78] The submission was, therefore, that the same applies in respect of Clauses
13.1 and 13.2, specifically 13.1 of the current agreements. This, as counsel argued,
is the manner in which the parties conducted themselves. No payments were made
automatically by the defendant o n a month to month basis and there w ere very
specific requirements as to how the invoice had to be done.
[79] In conclusion, counsel argue d, furthermore, that in addition to the fact that the
initial programme was determined based on Penta con’s projections, and the fact that
it was anticipated that the City of Tshwane would contribute a portion of the fees to
be paid by the defendant to the pla intiff, which necessitated a request to split the
invoices, clearly the parties intended that payment would be due on invoicing
occurring.
Legal framework
[80] The law regulating prescription is the Prescription Act.10 Section 11 thereof
provides for the periods of prescription of debts , the periods range from three to thirty
years, and depend on the type of debt . The debts under review in this matter are
governed by section 11(d) of the Act, which stipulates the period of prescription as
three years.
[81] Section 12(1) of the Act provides that:
"(1) Subject to the provisions of subsection (2), (3) , and (4), prescription
shall commence to run as soon as the debt is due."
[82] The following is said in Trinity about whe n a debt becomes due:
“[96] Section 12(1) of the Prescription Act provides that prescription ‘shall
commence to run as soon as the debt is due ’. The Prescription Act
doesn ’t define ‘due’, but long -standing SCA decisions have given it
10 Above n 1.
content. In Deloitte Haskins the court said that ‘prescription shall
commence to run as soon as the de bt is du e’ 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. .
. . It follows that prescription cannot begin to run against a
creditor before his cause of action is fully accr ued, i.e. before he
is able to pursue his claim. . . .’
[97] Truter said a debt is ‘due’—
‘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 s ucceed 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. ’
[98] In Miracle Mile the SCA reaffirmed the existing doctrin e applied in
Deloitte Haskins and Truter . Under the statute, it said —
‘a debt must be immediately enforceable before a claim in
respect of it can arise. In the normal course of events, a debt is
due when it is claimable by the creditor, and as the corollary
thereof, is payable by the debtor. ’” (footnotes omitted).
[83] Furthermore, Trinity , dealing wi th the concept of loans payable on demand ,
reaffirmed the general rule that the debt is due immediately upon conclusion of a
contract , unless the context states otherwise. I n that regard , that court remarked as
follows :
“[101] When a contract doesn’t say when precisely a debtor must perform or
repay, the general rule is that the debt is ‘due immediately upon
conclusion of the contract ’. But what about a creditor whom the contract
gives power unilaterally to determine when the debtor must perform –
by making demand? Loubser points out that ‘opinions are divided ’ on
whether prescription begins to run as soon as the creditor has the right
to demand that performance be made, or when actual demand is
made. Saner suggests that a contractual term that performance is due
‘on demand ’ simply reinforces the implici t term that performance is due
as soon as the deal is made.
[102] Oneanate is instructive. The first -instance court had to determine when
prescription began to run on a bank’s claim for repayment of four
separate amounts debited to a current account. When were the
separate debts in the overdrawn account ‘due and repayable ’? The
court invoked the long -standing common law rule that a loan without
stipulation as to a time for repayment is ‘repayable on demand ’. But
what does ‘repayable on demand ’ mean? The court said that
‘[a]lthough by no means linguistically clear ’, the phrase means that ‘no
specific demand for repayment is necessary and the debt is repayable
as soon as it is incurred ’. The practical effect is this. When suing for
repayment the creditor doe sn’t need to allege a demand: demand is not
part of the plaintiff’s cause of action. After considering English,
Canadian, Australian and New Zealand law, the court held that, unless
the parties agree otherwise, a loan ‘repayable on demand ’ is repayable
from the moment the advance is made and that no specific demand for
repayment need be made for the loan to be immediately due and
repayable.” (footnotes omitted)
[84] And, further on, that court stated the following:
“[104] Here, of course, the loan was not ‘payable on demand ’ but rather
repayable 30 days after demand. Does the additional 30 -day period
afforded to the debtor to repay change anything? Does it take this
agreement outside the law applying to loans ‘payable on demand ’? No.
The 30 -day period makes no difference. The point of the jurisprudence
is that the creditor has the unilateral power to demand performance
from the debtor at any time from advance – not that, following demand,
the debtor must pay immediately ( ‘on dema nd’) or 30 days later. In both
instances, the creditor has the sole power to demand performance at
any time.
[105] It is this fact – that the creditor has the exclusive power to demand that
performance be made when the creditor so chooses – that has given
rise to the general rule applying to loans ‘payable on demand ’, namely
that prescription begins to run when the debt arises, unless there is a
clear indication to the contrary.
[106] So the question is whether this loan agreement gives us enough signs
to justify dumping the general principle that in loans ‘payable on
demand ’ prescription begins to run as soon as the money is paid. And
our starting premise is that the parties’ contract fixes when a
contractual debt becomes due.”(footnotes omitted)
Analysis
[85] This case revolves around two agreements, namely, the Storm Water
Agreement and the Roads Agreement. The agreements are drafted in exactly the
same terms , save for the fact that they relate to different work, and the professional
fees payable by the defendant to the plaintiff are different . The agreements form the
basis of the five claims.
[86] Claim 1 pertains to the Storm Water Agreement , and in claim 4 , reference is
made to the Storm Water Agreement. The terms of that agreement are incorporated
as a basis for claim 4. Thus, the plaintiff’s claims 1 and 4 are founded on the Storm
Water Agreement. Claim 2 relates to the Roads Agreement and reference is made to
the Roads Agreement in claim 5. The terms of that agreement are incorporated as a
basis for claim 5. Thus, the plaintiff’s claims 2 and 5 are founded on the Roads
Agreement. And, claim 3 refers to both agreements – the Storm Water Agreement
and the Roads Agreement.
[87] All the claims are based on contractual debts. Claims 1 and 2 are premised
on a written agreement , whilst claims 3, 4 and 5 are based on oral agreements. It is
alleged in the particulars of claim that t he written agreements were signed by the
parties on 3 0 September 2013 ; and the oral agreements were , in terms of the
instructions given by the defendant to the plaintiff , as follows: claim 3 on 11
September 2013; claim 4 on 29 October 2014 and claim 5 on 18 October 2014.
[88] The question that arises is when the debts were due.
[89] The defendant’s contention was that the debts in respect of these agreements
became due i mmediately on the date the agreements were concluded , and that,
according to the defendant, was when prescription started to run.
[90] To the contrary, the plaintiff’s contention was that the debts were not
immediately due because their “dueness ”, was fixed in terms of the agreements.
Relying specifically on clause 13.1 of the agreements, the plaintiff submit ted that that
clause fixed the time when the debts would become due. The debts, according to the
plaintiff, became due upon the rendering of a n invoice by the plaintiff to the
defendant.
[91] Both parties referred the court to the judgment in Trinity . The court , in that
judgment , dealt with a loan that was “repayable on demand”. The question that arose
was whether the debt was “due” only when t he lender made demand or it was
repayable immediately after it had been extended because the right to make demand
lay solely within the discretion of the lender.
[92] At paragraph 101 of that judgement , it is stated that :
“[101] When a contract doesn't say when precisely a debtor must perform or
repay, the general rule is that the debt is 'due immediately upon
conclusion of the contract'.” (footnote omitted)
[93] And, at paragraph 105, that court states that :
“[105] It is this fact — that the creditor has the exclusive power to demand that
performance be made when the creditor so chooses —that has given
rise to the general rule applying to loans 'payable on demand', namely
that prescription begins to run when the debt arises, unless there is a
clear indication to the contrary." (footnote omitted)
[94] Even though Trinity dealt with a loan “payable on demand”, the principles
enunciated therein do apply in this instance. The general rule, therefore, is that when
an agre ement does not say when precisely a debtor must repay, the debt is due
immediately upon conclusion of the agreement, unless there is an indication to the
contrary.
[95] The only indication in the agreement s, in this instance , as to the debt being
due, is to be found in Clause 13.1 , which, as has already been stated, provides that :
“13.1 The consultant [the plaintiff] shall be entitled to render invoices monthly,
taking cognisance of the apportionment of fees in the schedule. Such
invoices shall be due and payable by the client [the defendant] on
receipt thereof.”
[96] The clause entitled the plaintiff to render invoices on a monthly basis , and the
schedule of payments provided by Pentacon is for a period of ten months , with the
final invoice upon completion of the work. The final payment is not considered for
purposes of this judgment because the agreements were never completed.
[97] On that basis , it seems that the agreements fixe d the time when the debt
became due, by the issuance of an invoice by the plaintiff , in or der to demand
payment from the defendant.
[98] The defendant’s counsel argued that in terms of the agreements, payment
was due and payable immediately , without the need to issue an invoice. The
contention was that the invoice is not a necessary part of the cause of action but a
mechanism that was to be followed to demand payment. The plaintiff’s counsel , on
the other hand, submitted that the issuance of an invoice was a precondition for the
payment of the debt that was due each month , and thus formed a necessary part of
the cause of action .
[99] It is trite that the parties’ contract fixe s when a contractual debt becomes
due.11 The court in Trinity , dealing with loans ‘payable on demand ’ remarked as
follows:
“[106] So the question is whether this loan agreement gives us enough signs
to justify dumping the general principle that in loans ‘payable on
demand ’ prescription begins to run as soon as the money is paid. And
our starting premise is that the parties’ contract fixes when a
contractual debt becomes due.” (footnote omitted)
[100] The same question can be asked , in this instance. The question is whether
the agreements give enough signs to justify dumping the general principle that
prescription started to run as soon as the agreements were concluded . However, as
Trinity states, the starting premise is that the parties’ contract fixes when a
contra ctual debt becomes due.
[101] In my view, a holistic reading of the written agreements and an understanding
of the oral agreements , in this instance, illustrates that the agreements fixed when
the debts became due. This was done in terms of Clause 13.1 , which requires the
rendering of an invoice before the debt became due. Clause 13.1 is the only clause
in the agreements that the plaintiff could rely on for its proposit ion that the debt in the
claims became due upon the rendering of an invoice. On a simple reading of the
clause,12 the parties had fixed the due date of the debt as, when the plaintiff had
rendered an invoice which became payable on receipt by the defendant. Such an
invoice had to be rendered on a monthly basis. The rendering of an invoice was, as
a result , a necessary part of the cause of action. It is not in dispute that that part (the
rendering of invoices) has been pleaded. That clause shows that the parties
11 See para 106 in Trinity above n 4.
12 See Coral Lagoon investments at para 50 , where the following is stated:
"[50] Endumeni simply gives expression to the view that the words and concepts used in a contract
and their relationship to the external world are not self -defining. The case and its progeny
emphasise that the meaning of a contested term of a contract (or provision in a statute) is
properly understood not simply by selecting standard definitions of particular words, often taken
from dictionaries, but by understanding the words and sentences that comprise the contested
term as they fit into the larger structure of the agre ement, its context and purpose. Meaning is
ultimately the most compelling and coherent account the interpreter can provide, making use of
these sources of interpretation. It is not a partial selection of interpretational materials directed
at a predetermin ed result. ”
intended to delay when the claim becomes due, and consequently, the
commencement of prescription .
[102] Dependent on the finding made here above, the defendant’s counsel had
argued that should it be found that pa yment was due upon the issuance of the
invoice, that in that event, the defendant would argue that in terms of the
agreements, the ability to issue invoices lay solely within the power of the plaintiff,
and that the plaintiff could not rely on its own fail ure to issue invoices to delay the
running of prescription.
[103] Counsel submitted that the plaintiff exercised that power on the same day that
it signed the agreements, by issuing an invoice. He sought reliance for his argument
on an invoice issued by t he plaintiff to the defendant which was dated 30 September
2013. The contention being that the plaintiff knew that as soon as it had an
agreement , it could issue an invoice, and it did. Counsel asserted that if the plaintiff
had the exercise of the power o n day one, it had that exercise of power each month
after that, it just did not exercise it.
[104] Conversely, the plaintiff’s counsel referred to the judgment in Standard Bank
of South Africa Ltd v Miracle Mi le Investments 67 (Pty) Ltd and Another ,13 and
argued that according to that judgment, a creditor has the right to elect when to
accelerate payment. Counsel contended that it meant that a creditor has in his hands
purely the unilateral power to decide when he is going t o pull the trigger to demand
payment . The contention was that since the agreements called for the rendering of
an invoice, which was payable on receipt by the defendant, the various debts arose
at the time of issuance of an invoice. Accordingly, as no invo ices were issued from
December 2013 until summons was issued, the claims in respect of all those months
had not become due, and, as such, were not extinguished by prescription.
[105] The principle is that a creditor cannot unilaterally delay prescription when it
has the power to claim. Trinity is instructive in this regard. That court held as follows:
13 [2016] 3 All SA 487 (SCA).
“[105] It is this fact – that the creditor has the exclusive power to demand that
performance be made when the creditor so chooses – that has given
rise to the general rule applying to loans ‘payable on demand ’, namely
that prescription begins to run when the debt arises, unless there is a
clear indication to the contrary.” (footnote omitted)
[106] In my understanding of this passage, the creditor has the exclusive power to
demand that performance be made when the creditor chooses , in circumstances
where the due date is not fixed, hence the sentence that ‘unless there is a clear
indication to the contrary ’.
[107] I have to hold, as such, that, the entitlement in the agreements, gave the
plaintiff the ability to issue invoices. That ability, as was argued by the defendant, lay
solely within the power of the plaintiff. The plaintiff had th e power , and that power
was to be exercised every month , as was called upon by the agreements. And, if it
failed to exercise th at power, it could not rely on such failure to delay the running of
prescription.
[108] Counsel for the plaintiff’s argument that it lay in the hands of the plaintiff to
decide when to issue an invoice, is , to me , absurd. The absurdity is brought about by
the fact that if the plaintiff ’s suggestion is right, it would mean that a creditor in the
position of the plaintiff can just sit back for years before issuing an invoice and be
able to maintain that the debt had n ot become prescribed ,14 as the plaintiff seeks to
do in this instance.
[109] It was, furthermore , argued on behalf of the plaintiff that Schedule “C” does
not cater for the additional work that was done post the signing of the agreements.
The contention was that Schedule “C” only provided for the amounts to be paid in
terms of the written agreements, that is, the fees provided for in Annexure “A”.
Sche dule “C”, as was argued, did not contain the fees that were payable in respect
of claim s 3, 4 and 5. The concession, however, was that the payments were to be
made in monthly instalments following the terms of the agreement.
14 Benson and Another v Walters and Others 1984 (1) SA 73 (A).
[110] This argument by the plaintiff’s counsel does not wash. This is so because of
the following:
110.1 in paragraph 18 of the particulars of claim , which relates to Claim 3 , it is
alleged that :
“. . . payment of the fees and disbursements due to the plaintiff
pursuant to the services rendered by it to the defendant . . . were
payable over a period of ten months, as recorded in the respective
Annexures “C” to the Storm Water Agreement and the Roads
Agreement.”
110.2 paragraph 22 of the particulars of claim , pertaining to Claim 4 , states
that:
“The plaintiff repeats the content of paragraphs 4 to 6.4, above, and
pray that same be read in here as if specifically pleaded as such by the
plaintiff.”
And, in p aragraph 5.10 of the particulars of claim , Annexure “C” is
referred to.
110.3 paragraph 27 relating to Claim 5 states that :
“The plaintiff re peats paragraphs 9 to 11.4 above, and prays that same
be read in here as if specifically pleaded as such.”
And, in paragraph 10.11 of the particulars of claim , reference is made
to Annexure “C”.
On the face of the plaintiff’s pleaded case , it is apparent that Annexure “C” plays a
part in determining the fees that were due to the plaintiff in respect of claims 3, 4 and
5.
[111] The question that follows is whether the claims have prescribed .
[112] The sum total of the defendant’s argument is that prescription, on the
plaintiff's claim s, the debt s which it claims are premised on the agreements , arose
monthly from September 2013 to July 2014. In each month, the plaintiff was entitled
to issue an invoice, which meant it had the power to do so, and so prescription in
respect of each of those monthly debts began to run immediately the plaintiff had
that right. And, as all of those monthly debts were due, they were due before 31 July
2014 , they were due before the prescription date of 8 April 2015 , and consequently ,
were extinguished by prescription.
[113] It was argued on behalf of the plaintiff th at the debts could not have been due
by 30 September 2013, as suggested by the defendant . The contention was that the
commencement of the project was delayed, because Pentacon only commenced
work on 19 May 2014. Moreover, so counsel for the plaintiff submi tted, the services
that the plaintiff had to render , endured for the duration of the project which ended in
September 2015, when the agreements were cancelled due to the non -performance
of Pentacon. Therefore, it could not be said that prescription started to run on 30
September 2013 when the re was no work done by then, so it was argued.
[114] It is common cause that three invoices were issued, being for September,
October and November. Out of the three invoices, only two were paid , which means
that the invoice for November was not paid. It is also not in dispute that that invoice
was received b y the defendant.
[115] Thus , relying on the interpretation afforded to clause 13.1 of the agreement, it
is obvious that prescription in respect of the debt accrued in the month of November,
started running when the invoice was issued on 30 November 2013 (as testified by
Mr Ellis), and three years later on 29 November 2016, the debt prescribed. The
summons was delivered on 9 April 2018 , about one year and f our months after the
debt had already prescribed.
[116] It is not in dispute that the invoices for the debt that accrued for the seven
remaining months were never issued. The plaintiff’s defence in this regard is that
prescription never commenced running in respect of the debt in those months
because invoices w ere never issued.
[117] As I have already found , the ability to issue the invoice was something that fell
solely within the power of the plaintiff. And, where the ability to issue the invoice lies
solely within the power of the plaintiff, the plaintiff ca nnot rely on its own failure to
issue the invoice to delay prescription.
[118] The allegations by Mr Ellis, in his testimony, that the plaintiff stopped issuing
invoices because the defendant had indicated that it does not have the funds to
settle the deb t that was due and requested the plaintiff to await the availability of
funds, is unmeritorious .
[119] Sight should not be lost of the fact that Mr Ellis testified that at the time of the
conclusion of the agreements, that is, the Storm Water Agreement an d the Roads
Agreement, he had already completed work up to stage 4. At stage 4, most of the
services that the plaintiff had to render for the defendant were completed because
Mr Ellis ’ testimony was that Pentacon was to start at stage 5. Mr Ellis testified ,
further, that the plaintiff had been rendering its service s on risk and that at that t ime,
the plaintiff was desperate for cash. Rendering services at risk, to me , means, that
the plaintiff was not paid for the service s he had rendered since 2010. Therefore, the
plaintiff had completed the work and was entitled to payment. What it needed to do
was to issue an invoice for that work.
[120] According to Mr Ellis’ testimony, the invoice was not rendered because of the
cashflow challenges of the defendant. Mr Egan requested Mr Ellis to claim the
amount due in terms of the cashflow schedule that was provided by Pentacon. That
is, to claim payment of the amount that was already due and payable in ten monthly
instalments.
[121] As per Mr Ellis’ evidence , the plaintiff did issue three invoices, two of which
were paid by the defendant. The third one was not paid because the defendant had
cashflow challenges and asked the plaintiff to wait until funds were available .
[122] The plaintiff , also, relied on Clause 13.2 of the agreements to prove that the
claims had not prescribed . The clause provides that should the defendant not pay
any invoice rendered by the plaintiff within 30 days from receipt thereof, the
defendant would be liable for interest for late payment calculated at a rate of 2%
above the rate of interest applicable from time to time to prime borrowers at the
plaintiff's bank from due date of payment.
[123] The plaintiff’s reliance on Clause 13.2 was dealt a fatal blow in Trinity , where
it was held that the fact that interest is payable 30 days later does not delay the
running of prescription.15 This is so, as th at court stated, because interest would only
start running from when demand is made, and, in this case, when an invoice is
rendered. The right to issue the invoice, as it has been said, lies solely with the
plaintiff and that power cannot be used to delay prescription.
[124] As Justice Cameron remarked in Trinity ,16 what prescribes is the right to claim
payment and that right is unaffected by when payment must actually be made. This,
according to th at court, means that the creditor had the right to claim payment
immediately even though the deb tor had 30 days to pay. The principle applies
similarly in this case. What prescribed was the plaintiff’s right to claim payment when
it became due, and that right was unaffected by when payment of the interest must
actually be made. It means that the plai ntiff had the right to claim payment
immediately it became due , even though the defendant had 30 days to pay the
interest.
[125] I deal hereunder with the plaintiff’s claims in turn :
Claim s 1 and 2
[126] The parties concluded the agreements on 30 September 2013. It was a term
of the said agreement s that the plaintiff was to render services for the defendant in
accordance with Annexure “B” of the agreement s. The defendant undertook, in terms
of the agreement, to pay the plaintiff services rendered in terms of the agreement in
ten monthly instalments .
15 Trinity above n 4 at p ara 111.
16 Trinity above n 4 at p ara 122.
[127] The fundamental question, as correctly put by the defendant’ s counsel, when
looking at the plaintiff’s claims, is what were the facts that the plaintiff was required to
prove in order to make a claim , and when were the set of facts in place.
[128] In order to make a case for the two claims, the plaintiff had to show that the
work it had to perform in terms of the agreements, had been completed for a
particular month that it was claiming for. And, in terms of the agreements , the plaintiff
was to rend er the standard services of a consulting engineer listed in paragraphs 3.1
to 3.2.5, 3.3.7 and 3.3.8 of Annexure “B”. The plaintiff alleged in the particulars of
claim and confirmed in its oral evidence, that it rendered the said services. This is
not in d ispute. In addition to those services, clause 13.1 of the agreements entitled
the plaintiff to issue invoices.
[129] In amplification of what was pleaded in the particulars of claim, in his oral
evidence, Mr Ellis testified that most of the services that it had to render for the
defendant were completed before the agreements were signed, and that in terms of
the normal excel rules of invoicing , the plaintiff was entitled to claim about 70% of its
fees in the first invoice , and that the construction phase w as only 25% . This, the
plaintiff did not do because the defendant requested it to spread out the debt over
ten months as per the schedule of cashflow provided by Pentacon . When the
agreements were con cluded, it was required that invoices be issued on a monthly
basis as a precondition for payment.
[130] On the basis of this evidence, counsel for the plaintiff argued that the
timeframes submitted by the defendant , that the claim s would have been due by 31
July 2014, are problematic as per the evidence of Mr Ellis, the plaintiff continued
rendering services to the defendant beyond 31 July 2014. The evidence on record,
according to counsel, state d that the agreements were cancelled in September 2015,
which was a date that would fall within the period of prescription.
[131] This evidence does not assist the plaintiff’s case, instead , it confirms that the
debt was due at the time the agreements were signed. The least that can be said in
this regard is that 30% of the work had to be done over the duration of the
agreements. In terms of the agreements, the standard services of a consulting
engineer listed in paragraphs 3.2.5, 3.3.7 and 3.3.8 of Annexure “B ” could not have
been completed before the agreements were signed.
[132] In terms of paragraph 3.2.5 , the plaintiff was to be involved in stage 5 of the
project , which required it to manage , administer and monitor the construction works,
contracts and processes , including preparation and coordination of procedures and
documentation to facilitate the practical completion of the construction works.
Paragraph 3.3.7 required the plaintiff to ass ist the defendant in mediation, arbitration
and litigation proceedings and similar services. In terms of p aragraph 3.3.8 , the
plaintiff is appointed as a principal agent on the construction of the project . Such
services could only be done during the duration of the agreements. Under those
circumstances , it could be said that the claims in respect of the said services had not
prescribed at the time the summons was delivered because the agreements endured
until in September 2015.
[133] The challenge with this evidence is that it was not pleaded , and the defendant
was not afforded an opportunity to plead thereto in its special plea. The evidence is,
as a result, irrelevant and inadmissible for the purposes of determining whether the
claim had prescribed or not.
[134] On the defendant’s pleaded case, these claims have prescribed. A claim for
each of the payments in these claims would be extinguished by prescription after
three years. The last of those payments w as, as the defendant argued, due and
payable on 31 July 2014. Prescription on the claim s for that payment commenced
running on 1 August 2014. A period of three years for that claim would have expired
on 30 July 2017.
[135] Summons was delivered on 9 April 2018 , which was nine months after the
period of prescription had expired. Thus, at date of institution of the proceedings , the
claim s had prescribed. And, if the claim s for the tenth payment (which was the last
one),17 had pre scribed, it means that all of the claims for the payments prior to it had
also been hit by prescription.
[136] The debt that arose on 30 November 2013, is classic . An invoice had been
issued and received by the defendant. The debt was , for all intends and purposes ,
due, and prescription started to run immediately. For that debt , the three year period
of prescription expired on 2 9 November 2016. Summons was delivered o n 9 April
2018, which was a year and f our months after the claim was extinguished by
prescription.
[137] In respect of the debt for the remaining seven months, there were no invoices
issued. But as it has been said, the power to issue the invoice s laid with the plaintiff ,
and the plaintiff having failed to issue the invoices, such de bt arose monthly from
December 2013 until July 2014 , and prescription for those debts commenced
running .
Claim 3
[138] In this claim , the parties are alleged to have , on 11 September 2013, entered
into an oral agreement for supervisory services to be rendered by the plaintiff. In
terms of this agreement , the plaintiff was employed to supervise the work of
Penta con.
[139] It was expected that the project programme of Penta con would be completed
within ten months from the date of appointment of Penta con. The project programme
did not start as was expected and had to be extended by an additional ten months.
[140] To prove th e supervisory nature of the agreement, Mr Ellis gave evidence that
in the service agreement that was signed between the Tshwane Council and the
defendant , it was agreed that Mr Egan appoint the plaintiff as the consulting engineer
during the construction o f the external works. The contractor in this instance was
Penta con. The service agreement was signed by the council on 13 September 2013,
17 The 11th payment , which ought to have been the last one as per the agreement , had not become
due and payable because the agreement was not completed.
and by the defendant on 30 September 2013. Mr Ellis , in his testimony, also, stated
that the plaintiff was appointed as a principal agent to manage the contract between
the defendant and Penta con.
[141] Mr Ellis testified that, although the agreements were signed in September
2013, Penta con did not go on s ite immediately because , what Mr Ellis referred as the
‘Wayleaf ’ agreements , were outstanding. Therefore, Penta con could only take
possession of the site on 13 January 2014 . And, due to the Telkom fibre that was to
be removed on the site, Pentacon could on ly start working on the site on 18 May
2014. Mr Ellis testified that in terms of the programme that it was said would take ten
months and start in September 2013, the actual start date thereof, was 18 May 2014.
There is also evidence to the effect that the contract between the defendant and
Penta con was stopped somewhere in 2015.
[142] Furthermore, in the request for further particulars, the defendant enquired
from the plaintiff what was the month that the plaintiff is alleged to have delivered
services pursuant to the agreement pleaded in Claim 3. The answer given by the
plaintiff in it s reply to the request for further particulars, is October 2014.
[143] It is on that basis that it was argued on behalf of the plaintiff that , because the
plaintiff continued to render services beyond the date suggested by the defendant of
31 July 2014 , or the date stated in the reply to the request for further particulars , or
until the agreement was cancelled in September 2015, the debt in respect of this
claim had not become due because the plaintiff had not acquired a complete cause
of action.
[144] On the plaintiff’s pleaded case , the ten month period was to be from 11
September 2013 to 13 July 2014. The date would therefore expire three years later
on 12 July 2017. On Mr Ellis’ testimony, the ten months extension was to be from 18
May 2014 to 18 March 2015. The claim would , as a result , expire three years later on
17 March 2018. Summons was delivered on 8 April 2018, and at that time, on both
scenarios , the claim had already prescribed.
[145] The extension from 18 May 2014 to 18 March 2015, as well as the extension
of the services until the cancellation of the agreements in September 2015 , is not
pleaded. Evidence tendered by the plaintiff in that regard, is therefore , irrelevant and
cannot be considered for the purpose s of determining the prescription of this claim.
There is, also, no evidence on record to prove the date provided in the reply to the
request for further particulars.
Claim 4
[146] There were a number of instructions allegedly received by the plaintiff to
render additional services for the defendant. The plaintiff claimed payment for each
of those instructions, however, the defendant raised a plea of prescription against
only one. Th e debt that is, therefore, relevant for prescription in this claim is that
referred to in paragraph 23.1 of the particulars of claim. This is where the plaintiff
allege d it designed an overlay solution to address the rejected workmanship of
Penta con, and i n so doing, executed instructions received from the defendant
between 28 October 2014 and 5 March 2015.
[147] The plaintiff’s coun sel is of the opinion that even though the instructions for
the construction of the overlay were received between 28 October 2014 and 5 March
2015, the work that had to be done was completed after that time. The result was
that, as counsel argued, the plaintiff could not claim for those services before such
completion.
[148] In this regard, counsel sought support in the unchallenged evidence of Mr
Ellis, in which he referred to a string of emails between Mr Jan G McCabe , a
representative of the Tshwane Council, Mr Egan and himself. The emails show that
in order to finalise the said instructions or the services that were rendered, the
approval of the Tshwane Council was required. The emails also indicated that the
negotiations for such approval went far beyond 5 March 2015 , the last of which was
on 23 April 2015.
[149] Relying on the principle that the plaintiff had the power to issue an invoice, the
view of the defendant’s coun sel is that the claim had prescribed because the three
year period of prescription fell on 4 March 2018.
[150] It is trite that a debt is due when the c reditor acquires a complete cause of
action for the recovery of the debt, that is, when an entire set of facts which the
creditor must prove in order to succeed with his/her claim against the debtor is in
place. The situation in this claim was that the ent ire set of facts were not in place
until the approval of Tshwane Council was obtained. There is an email that indicates
that even by 23 April 2015 , the approval of the Tshwane Council was still under
negotiation.
[151] The challenge for the plaintiff with this evidence is that it was not pleaded, and
as such , the defendant was not afforded an opportunity to respond thereto in the
special plea. The evidence is, as a result, irrelevant and in admissible and cannot be
considered in determining whether the claim had prescribed or not.
[152] And, on the defendant’s pleaded case , the claim has prescribed. The plaintiff
claims a globular amount of R 112 000, calculated at 64hrs at the rate of R 1 600 per
hour for the engineer , plus 16hrs at the rate of R 600 per hour for the technician.
This, without specifically stating how the am ount was accumulated over the period in
question. However, prescription on that claim commenced running on 6 March 2015.
A period of three years for that claim expired on 5 March 2018. Summons was
delivered on 9 April 2018, which was about one month after the period of prescription
had expired. Thus, at date of institution of the proceedings , the claim had prescribed.
Claim 5
[153] The claim pertains to additional road services done by the plaintiff at the
instruction of the defendant, between 18 October 2014 and February 2015 by
designing an additional sewer connection to accommodate incorrect design
information received from the lo cal authority.
[154] The plaintiff claims a globular amount of R 56 825.51 without specifically
stating how that amount was accumulated over that period. In any way, prescription
on the claim commenced running on 6 March 2015. A period of three years for that
claim expired on 5 March 2018. Summons was delivered on 9 April 2018, which was
about one month after the period of prescription had expired. Thus, at date of
institution of the proceedings , the claim had prescribed.
Was the running of prescription i nterrupted?
[155] As earlier stated, section 12(1) of the Prescription Act provides that, subject to
certain exceptions, prescription starts running as soon as a debt is due. Section 12 is
supplemented by section 13 which identifies circumstances which may delay the
running of prescription .
[156] Section 14 of the Prescription Act, which is relevant for the purposes of this
judgment, provides as follows:
“14. Interruption of prescription by acknowledgement of liability. -
(1) The running of prescription shall be interrupted by an expres s or
tacit acknowledgment of liability by the debtor.
(2) If the running of prescription is interrupted as contemplated in
subsection (1), prescription shall commence to run afresh from
the day on which the interruption takes place or, if at the time of
the interruption or at any time thereafter the parties postpone the
due date of the debt, from the date upon which the debt again
becomes due.”
[157] In Investec Bank Limited v Erf 436 Elandspoort (Pty) Ltd and Others (“Erf
436”) ,18 whereat the Supreme Court of Appeal dealt with the question of whether a
series of payments in terms of agre ement between creditor and debtor were
acknowledgements of liability that interrupted prescription , the court stated the
reason for the rule relating to prescription and interruption thereof, as follows:
18 (410/2019) [2020] ZASCA 104 (16 September 2020).
“[27] The reason for rules relating to prescriptio n was discussed by Marais
AJ in Cape Town Municipality v Allie NO . He said:
‘Over the years the Courts and the writers on the law have sought to
provide a rationale for the doctrine of prescription or the limitation of
actions. It is unnecessary to burden this judgment with a discussion of
the plausibility of the explanations which have been suggested.
Whatever the true rationale may be, it cannot be d enied that society is
intolerant of stale claims. The consequence is that a creditor is required
to be vigilant in enforcing his rights. If he fails to enforce them
timeously, he may not enforce them at all. But that does not mean that
the law positively e ncourages precipitate and needless law suits. It is
quite plain that both at common law, and in terms of the Prescription
Acts of 1943 and 1969, a creditor may safely forebear to institute action
against his debtor if the debtor has acknowledged liability for the
debt. Lubbers and Canisius v Lazarus 1907 TS 901 ; De Beer v Gedye
and Gedye 1916 WLD 133. And it seems right that it should be so.
Why should the law compel a creditor to sue a debtor who does not
dispute, but acknowledges, his liab ility?’
[28] The policy underlying prescription in general, as well as the exception
that is created by s 14 , were explained in Murray & Roberts
Construction (Cape) (P ty) Ltd v Upington Municipality :
‘Although many philosophical explanations have been suggested for
the principles of extinctive prescription . . . its main practical purpose is
to promote certainty in the ordinary affairs of people. Where a creditor
lays claim to a debt which has been due for a long period, doubts may
exist as to whether a valid debt ever arose, or, if it did, whether it has
been discharged . . . The alleged debtor may have come to assume
that no claim would be made, witnesses may have die d, memories
would have faded, documents or receipts may have been lost, etc.
These sources of uncertainty are reduced by imposing a time limit on
the existence of a debt, and the relevant time limits reflect, to some
extent, the degree of uncertainty to wh ich a particular type of debt is
ordinarily subject (s 11 of the Act).
The same considerations which provide a justification for extinctive
prescription also suggest th at the time limits should not be immutable.
Where the creditor takes judicial steps to recover the debt, and thereby
to remove all uncertainty about its existence, prescription should
obviously not continue running while the law takes its course (s 15 ) of
the Act). Moreover, s 14 of the Act provides that the running of
prescription is interrupted by an express or tacit acknowledgement of
liability by the debtor. The reason is clear – if the debtor acknowledges
liability there is no uncertainty about the debt. No purpose would
accordingly be served by requiring the creditor to interrupt prescription
by instituting legal proceedings for the recovery of the debt. ” (footnotes
omitted)
Defendant’s argument
[158] In argument against the plaintiff’ s suggestion that the running of prescription
against the plaintiff’s claims was interrupted, the defendant’s counsel placed reliance
on the judgment of the Supreme Court of Appeal in Road Accident Fund v Mothupi
(“Mothupi”),19 which sets out the various elements a court should look for in
determining whether prescription has been interrupted. As a point of departure,
counsel referred to paragraph 37 of that judgment that reads as follows:
“[37] For a variety of reasons the question posed must in my opinion be
answered in the negative. In the first place an acknowledgment of
liability for the purpose of s 14 of the Prescription Act is a matter of
fact, not a matter of law. Thus it was stated in Agnew v Union and
South West Africa Insurance Co Ltd [“Agnew”] 1977 (1) SA 617 (A) at
623A -B:
“Of daar in ’n bepaalde geval ’n erkenning van aanspreeklikheid
was, is ’n feitlike vraag wat betrekking het op die bedoeling van
die persoon wat as skuldenaar aangespreek is. In dié verband
19 2000 (4) SA 38 (SCA).
het BROOME, R.P., die volgende gesê in Petzer v. Radford
(Pty.) Ltd., 1953 (4) S.A. 314 (N) op bl. 317 en 318:
‘To interrupt prescription an acknowledgment by the debtor
must amount to an admission that the debt is in existence and
that he is liable therefor.’ ”
[159] Based on this passage, counsel argued that Mr El lis in his evidence
complained that Mr Egan had said there would be a potential liability if the plaintiff
finished the project, based on payment to be made by Pentacon, or the issue of the
guarantees by City Council. That evidence, according to counsel, f ell short of what
the Supreme Court of Appeal in Mothupi , says is required.
[160] In support of this argument, counsel emphasised the remarks of that court
when it said:
“In Benson’s case, the majority of the court put it on the footing that the Act
required an acknowledgement of liability “aanspreeklikheid” and not merely an
acknowledgement of indebtedness.” 20
[161] Counsel juxtaposed what the court said in Mothupi with what is pleaded in the
plaintiff’ s replication. And, what is pleaded in paragraph 39.1.1 of the replication is
that
“The defendant admitted and acknowledged that (sic!) its indebtedness
towards the plaintiff . . .”
[162] Counsel argued, therefore, that on the plaintiff’s own case, it wa s alleged that
the defendant admitted and acknowledged its indebtedness, which is against what
the Supreme Court of Appeal said when it stated that an admission of indebtedness
is not enough. According to counsel, an acknowledgment of indebtedness is diffe rent
from an acknowledgment of liability, and only an acknowledgment of liability
interrupts prescription.
20 Para 38.
[163] In addition, counsel referred, also, to the following quote in Mothupi :
“And in the minority judgment, in that case, it is further stated at 90G:
‘For an acknowledgment of debt to be effective as an interruption of
prescription it is not necessary that it should be quantified in figures. It
is sufficient if it is capable of ascertainment by calculation or extrinsic
evidence without the furthe r agreement of the parties.’
In this case, there is not even common ground on a minimum amount which is
acknowledged by the Fund. The admission, in short, must cover at least every
element of the debt and exclude defence, as to its existence. An admissio n
relating solely to the negligence of the insured driver does not comply with
that requirement.”21
[164] According to counsel, the above remark meant that the admission must cover
every element of the debt and exclude the defence, as to its exi stence. The
contention was that the plaintiff’s evidence did not prove that the admission by the
defendant covered every element of the debt and excluded the defence, as to its
existence.
[165] In support of this proposition, counsel referred to the evid ence of Mr Ellis
where he acknowledged that Mr Egan had always relied on Item D.22 According to
counsel, when Item D is always an obstacle seen by Mr Egan to his obligation to
pay, it can never be assumed or inferred that Mr Egan made an acknowledgement of
liability which excludes the defence, as to its existence.
[166] Finally, counsel referred to paragraph 39 in Mothupi , where the court
mentioned a point raised in Cape Town Municipality v Allie NO (“Allie”) ,23 where the
following is said:
21 Para 38.
22 Item D relates to a suspensive condition that was a term of the agreement between the plaintiff and
the defendant.
23 1981 (2) SA 1 .
“[39] And finally there is the point raised in Cape Town Municipality v Allie
NO 1981 (2) SA 1 (C) 7F -G:
“In the end, of course, one must be able to say when the
acknowledgment of liability was made, or otherwise it would not
be possible to say from what day prescription commenced to run
afresh.”
This links up with what was earlier stated in Benson’s case, supra , at 86E:
“No doubt an alleged, but ambiguous, ‘acknowledgment’ may
fall to be interpreted in the light of preceding conduct of the
debtor, but, since interruption takes place at a specific point in
time, I have some difficulty in understa nding how various factors
can cumulatively amount to a single act of interruption.”
On the facts of this case, where the alleged concession as to negligence does
not consist of a single act but of an impression due to inaction over a
prolonged period, it i s even more difficult to conceive how the requirement of s
14 can be said to have been fulfilled.”
[167] This paragraph, counsel contended, was important because the plaintiff does
not plead a specific date in June 2015, for the interruption. Counsel ref erred to the
plaintiff’s pleading in paragraph 39.1 of the replication, where the plaintiff alleges,
during or about June 2015, without alleging a particular date when the interruption
occurred. The defendant’s submitted, in this regard, that prescription cannot
commence to run during or about June 2015. Counsel argued, similarly, that an oral
agreement cannot be concluded during or about June 2015, simply because, an oral
agreement is where two people talk to each other, and exchange specific words on a
particular day.
[168] In addition, so counsel argued, the testimony of Mr Ellis does not inform the
court whether the oral agreement was concluded before the letter of 12 June 2015,24
or after that letter. The evidence referred to general office discussions. Counsel
submitted, further, that it was clear that there was no agreement before the letter of
24 The letter of 12 June 2015 was written by Mr Ellis to Mr Egan, wherein he requested Mr Egan to
remove Item D from the agreement.
12 June 2015, because if t here had been an agreement before 12 June 2015, that
letter would not have been written.
[169] Furthermore, counsel pointed out that Mr Ellis’ testimony did not indicate that
there was an oral agreement concluded after 14 June 2015. The evidence referred
to a letter by Mr Egan in response to the letter from Mr Ellis of 12 June 2015 wherein
Mr Egan undertook to give Mr Ellis a call on Monday. The evidence, according to
counsel, does not indicate that that call was ever made.
[170] On the second occurrence of the interruption, pleaded in paragraph 42 of the
replication, counsel argued that for this interruption, the plaintiff relied on a statement
of defence in the arbitration proceedings that ensued after the agreement between
the defendant and Pentacon wa s cancelled. The contention is that Mr Ellis
confirmed, in his evidence, that claims 1, 2 and 3 do not appear in the statement of
defence. And, counsel argued that the statement of defence could not be relied on
for claims 1, 2 and 3.
[171] With regard to claims 4 and 5, counsel’s proposition is that the reliance by the
plaintiff on the arbitration proceedings, has no chance of success. Counsel submitted
that in respect of the overlay claim, Mr Ellis sought to count on the eighth item on the
statement of defence which refers to interest lost. According to counsel, Mr Ellis
seemed to suggest that with regard to the interest that was lost due to non -payment
by the defendant, that the defendant was relying on him as a witness to give
evidence, amounted to an admission by the defendant that the amount was due.
This, according to counsel, does not follow because all that the defendant wanted
was that Pentacon should pay.
[172] Counsel argued that the authorities are clear that if an acknowledgment of
liability is to be made by an agent, that agent must be authorised to make that
admission. The plaintiff, so it was argued, has not come close to establishing the
authority of the lawyers who signed the statement of defence to admit liability on
behalf of the defendant in a different matter.
Analysis
[173] In its replication to the defendant’ s special plea of prescription, the plaintiff
pleaded two events during which the running of prescription was interrupted, namely,
the events that occurred during or about June 2015 and, the events that happened
on 13 May 2016.
[174] I agree with the rea soning provided by the defendant as to why it cannot be
said that the running of prescription was interrupted in accordance with section 14 of
the Prescription Act. I deal with the two occurrences hereunder, in turn.
June 2015 interruption
[175] On the first alleged interruption that occurred during June 2015, the plaintiff’s
case is pleaded as follows:
“39.1 During or about June 2015 and at or near Pretoria, the Plaintiff,
represented by Francois Ellis as its sole member, and the Defendant,
represente d by Russel Egan in his capacity as duly authorized director,
entered into a further oral agreement, the express, alternatively
implied, further alternatively tacit terms and conditions of which were as
follows:
39.1.1 the Defendant admitted and acknow ledged that (sic!) its
indebtedness towards the Plaintiff and that it was unable to pay the
amounts listed in claims 1 to 5 of the particulars of claim to the Plaintiff
and would not be able to pay such amounts, irrespective of when they
became due, until, at the earliest:
39.1.1.1 the Defendant had secured the release of funds held in
trust as guarantee for the Defendant's performance of
its contractual or legal obligations towards the City of
Tshwane; alternatively
39.1.1.2 the Defendant was able to acc ess funds held in trust
pursuant to a sale of business/sale of assets
agreement entered into between the Defendant and
third parties.”
[176] In opposition to the plaintiff’s pleaded case, the defendant raised three
grounds, that it alleged prove that the running of prescription in respect of the claims
was not interrupted. These grounds are valid.
[177] Firstly, it is not in dispute that the plaintiff in paragraph 39.1.1 of the replication
alleged that the defendant admitted and acknowledged its indebted ness, instead of
acknowledging its liability. As was decided in Benson , which was cited with approval
by the court in Mothupi , ‘the Act (the Prescription Act), requires an acknowledgement
of liability (‘aanspreeklikheid’) and not merely an acknowledgement of indebtedness.’
[178] The argument by the plaintiff’s counsel that the plaintiff has, in paragraph 43
of the replication, pleaded that the defendant acknowledged its liability to pay the
plaintiff, does not assist the plaintiff’s case, at all. The occurrence upon which the
plaintiff depends for the interruption of the prescription in June 2015, is as stated in
paragraph 39 of the replication, as quoted above. The allegations therein are that the
plaintiff entered into an oral agreement with the defendant, the terms and conditions
of which are that ‘the defendant admitted and acknowledged its indebtedness
towards the plaintiff’. This is the cas e that the defendant had to meet, on this ground.
[179] Secondly, if it were to be accepted that the defendant admitted and
acknowledged its liability to the plaintiff, the evidence of Mr Ellis that Mr Egan
refused to remove Item D from the appointment a greement, proves otherwise. It was
Mr Ellis’ testimony that he had on several occasions requested an amendment to the
appointment agreement that would remove the suspensive clause in Item D, of the
contract, without success. This evidence, therefore, indic ates that Mr Egan, on
behalf of the defendant, placed reliance on Item D as a defence to the defendant’s
obligation to pay the plaintiff. Consequently, as was argued by counsel for the
defendant, it could never be assumed or inferred that Mr Egan made an
acknowledgement of liability which excludes the defence, as to its existence.
[180] Lastly, even if it were to be accepted that the admission alleged to be made
by the defendant, covers all the elements of the debt and does not exclude the
defence, as to i ts existence, the fact that no specific date in June has been pleaded,
puts to bed the plaintiff’s case. It is common cause that in paragraph 39.1 of the
replication, the allegation made by the plaintiff is that ‘during or about June 2015’,
without a speci fic date being alleged, when such interruption took place.
[181] It is a general principle of our law that when a plea of interruption of
prescription is made, a particular date of such occurrence should be alleged. As is
the case, interruption takes place at a specific point in time. It must, therefore, be
stated when the acknowledgement of liability was made in order to be able to
determine what day prescription would commence to run afresh.
[182] There are only two dates in June 2015 that are mentioned in Mr Ellis’
testimony, that is, 12 June 2015 and 14 June 2015. T he two dates are mentioned
specifically in relation to the emails that were exchanged between Mr Ellis and Mr
Egan. None of the two emails make mention of when the oral agreement between
the parties was concluded or put differently, when the running of pre scription was
interrupted.
[183] The plaintiff’s counsel conceded in argument that the exact date upon which
the oral agreement is alleged to have been entered into, is not provided by the
plaintiff. Neither in its pleading nor in its oral evidence. Coun sel explained such
failure to be because of the passage of time – the interaction between the parties
having occurred nine years ago. Counsel argued that it would have been highly
suspect if Mr Ellis could have been able to provide an exact date upon whic h the
discussions, when Mr Egan put him at ease that he would pay the plaintiff’s fees,
occurred. According to counsel, it was impossible for Mr Ellis to provide those
details, but he (Mr Ellis) gave an honest response to the question that was put to
him, and his version is not in dispute. The explanation does, however, not take the
plaintiff’s case any further.
[184] The further argument by the plaintiff’s counsel, which was based on the
judgment in Erf 436 , that the outward conduct of Mr Egan, of contin ually asking
Mr Ellis to provide services to the defendant, and undertaking to pay the plaintiff’s
fees, should be regarded as a tacit acknowledgment of liability, does not assist the
plaintiff’s case. The tendered evidence of the general conduc t by the defendant
which, when taken together, is alleged to be consistent with an acknowledgement of
liability, does not, in my view, meet the threshold for interruption under section 14(1).
[185] Similarly as in Mothupi , on the facts of this case, wher e the alleged admission
and acknowledgement does not consist of a single act, but of an impression due to
inaction over a prolonged period, it is even more difficult to conceive how the
requirement of section 14 can be said to have been fulfilled. It is, therefore, my
finding that without a specific date as to when the prescription was interrupted, the
plaintiff’s plea of interruption cannot see the light of day.
March 2016 interruption
[186] In its second occurrence, the plaintiff pleaded its case as fo llows:
“42. On or about 13 May 2016 the defendant duly represented by Russel
Egan alternatively represented by its attorneys of record, Adams and
Adams, further alternatively represented by Pat Ellis SC, further
admitted the defendant's liability towards the plaintiff that:
42.1 the Defendant, in arbitration proceedings between it and
Pentacon, claimed damages from Pentacon constituted by
amounts due and owing by the Defendant to the Plaintiff;
42.2 the Defendant, as part of its statement of defence in the
aforementioned arbitration, filed Annexure "R1a hereto, as
Annexure "SOD7".”
[187] In order to prove the acknowledgement of liability that occurred on 13 May
2016, the plaintiff relied on the statement of defence that was used to support the
counterclaim that was brought by the defendant in the arbitration proceedings that
ensued after the defendant cancelled Pentacon’s agreement. Attached to the
statement of defence was Annexure “SOD7” which w as used as the basis for the
counterclaim. In Annexure “SOD7” which was said to be Annexure “FE6”, the plaintiff
set out a detailed breakdown of the estimates of additional fees that were due to it as
a result of the cancellation of Pentacon’s agreement. A ccording to Mr Ellis’ evidence,
the statement of defence contained, amongst others, amounts that were due by the
defendant to the plaintiff that the defendant was claiming from Pentacon. The
amounts, also, included the interest lost by the plaintiff due to the non -payment of its
debt by the defendant. The evidence indicates that the defendant’s legal
representatives signed that statement of defence. The plaintiff now seeks to use that
statement of defence as prove that the defendant acknowledged its liabili ty by
allowing the fees and/or interest owed to the plaintiff in its claim against Pentacon.
[188] It is common cause that the amounts alleged to be due in respect of claims 1,
2 and 3 do not appear in the statement of defence. It is, also, not in dispute that the
amounts stated in the statement of defence are damages claimed by the defendant
from Pentacon. The damages, as such, could only include expenses for which
Pentacon was liable, or would become liable to pay in the future.
[189] It is counsel for the defendant’s argument that the statement of defence could
not be relied on for claims 1, 2 and 3. However, the contention by the plaintiff’s
counsel is that the damages includes the payment of interest in respect of the
plaintiff's unpaid fees, as cla imed in claims 1, 2, 3 and 5, and Annexure "SOD7",
attached to the statement of defence, includes the additional work performed by the
plaintiff, as pleaded in Claim 4. The contention is that firstly, the inclusion of the
interest component in the damages, is an acknowledgment by the defendant that it
was indebted to the plaintiff in the amount claimed in claims 1, 2 and 3. Secondly, as
regards claims 4 and 5, the contention is that the amounts claimed, amounted to a
clear acceptance and acknowledgement tha t the amounts are due by the defendant
to the plaintiff. This being so because the statement of defence was prepared and
submitted by Mr Ellis and accepted by the defendant and hence it was included in
the counterclaim, so it was argued.
[190] It is my view that there is nothing in Annexure “FE6” or “SO7” that shows that
the interest that is included in the damages claim mean that the defendant
acknowledged liability for the debts in claims 1, 2 and 3. It is quite clear that claims
1, 2 and 3 a re not covered in the statement of defence. Mr Ellis’ evidence confirms it,
as well. Therefore, the statement of defence cannot be relied upon for the alleged
interruption of prescription in respect of the said claims.
[191] The contention that the defend ant accepted and acknowledged liability simply
because it accepted the statement of defence that was prepared by Mr Ellis, holds
no water. It is trite that for an acknowledgement of liability to pass master,
acknowledgment by the debtor must amount to an a dmission that the debt is in
existence and that he is liable therefor.25 In this instance, although it can be said that
Mr Ellis’ evidence proved the existence of the debt, the evidence, however, fell short
of indicating that the defendan t admitted that it is liable for such debt.
[192] The plaintiff also sought to rely on the admission of liability being made by the
defendant’s legal representatives. It is a principle of our law that for an
acknowledgement of liability, to effectively in terrupt prescription, it can be made by
either the debtor or his or her agent.26 In this instance, the plaintiff sought to rely on
the legal representative as its agent. However, the law is that if an acknowledgment
of liability is to be made by an agent, that agent must be authorised to make that
admission. The plaintiff’s evidence, in this instance, failed to establish the authority of
the defendant’s legal representatives who signed the statement of defence to admit
liability on behalf of the defendant in a different matter. Mr Ellis was unable to do so,
nor could he do so because he would not have been privy to the defendant’s
instructions to its legal representatives.
[193] Consequently, I have to agree with the defendant’s argument that the
statement of defence which is used by the defendant to claim costs from Pentacon,
does not constitute an acknowledgement of liability by the defendant to the plaintiff.
Certainly, the plaintiff failed, as well, to establish that Adams & Adams and/ or Adv P
Ellis SC, who were briefed to defend the arbitration proceedings, were authorised by
Mr Egan to represent him in admitting liability for any historical claims. Thus, even on
this ground, the plaintiff has failed to prove that the alleged occurrenc e of 13 May
2016, interrupted the running of prescription
Conclusion
25 Agnew at 623A -B.
26 Erf 436 para 31.
[194] When trying to explain to the court how prescription work s, counsel for the
defendant stated the following:
“. . . you are pleading a case. Your case cannot get better than your
pleadings. Your pleading says, you had a contract, you did the work, you are
entitled to payment. The Court asked, well, when were you entitled to
payment. When was your debt due, it was the month after you did the work. Is
that more than three years before you issued the summons? Yes. Your claim
is prescribed.”
All that can be said is that there was a debt, now there is no debt. That is the effect
of prescription.
[195] This judgment is delivered terribly late. I apologise profusely for this lateness,
which was occasioned by circumstances beyond my control. I have, for the better
part of this year, been aff licted by illness.
Costs
[196] The defendant , as the successful party , is entitled to its costs of suit. It is my
view that the issue of prescription, in this instance, with multiple claims and complex
facts, justifies the granting of an order for costs on the highest scale — Scale C.
Order
[197] The following order is granted:
1. The defendant's special plea of prescription against claim 1 is upheld.
2. The defendant's special plea of prescription against claim 2 is upheld.
3. The defendant's special plea of prescription against claim 3 is upheld.
4. The defendant's special plea of prescription against t he claim made in
paragraph 23.1 of the particulars of claim relating to the design of an
overlay solution to address rejected workmanship of Pentacon, is
upheld.
5. The defendant's plea of prescription against claim 5 is upheld.
6. The plaintiff is ordered to pay the defendant's costs in accordance with
Scale C.
____ ________________________
E M KUBUSHI
JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
APPEARANCES:
For the Plaintiff : Adv Daniel Prisloo
Instructed by: Jacobs Roos Fouche Inc .
For the Defendant : D.A Turner SC & Adv T.G Ngobeni
Instructed by: Lawtons Africa
Date of the hearing: 4 – 6 September 2024
Date of judgment: 8 July 2025