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[1997] ZASCA 38
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Abrahamse v Municipality of East London and Another, Municipality of East London and Another v Abrahamse (483/95, 513/95) [1997] ZASCA 38; [1997] 2 All SA 651 (A) (12 May 1997)
THE SUPREME COURT OF APPEAL
SOUTH AFRICA
CASE NO: 483/95
In the matter between:
G A ABRAHAMSE
Appellant
and
MUNICIPALITY
OF
EAST LONDON
AND ANOTHER
1st Respondent
MUNICIPALITY OP BEACON BAY
2nd Respondent
and
Case No 513/95
In the matter between:
MUNICIPALITY
OF
EAST LONDON
Appellant
AND ANOTHER
and
G A ABRAHAMSE
Respondent
CORAM:
MAHOMED CJ, F H GROSSKOPF, HARMS, MARAIS JJA et
STREICHER AJA
HEARD:
17 MARCH 1997
DELIVERED: 12 MAY 1997
JUDGMENT
HARMS JA/
2
HARMS JA:
Whilst I agree with Marais JA that the appeal of the
Municipality
of
East London
stands to be dismissed, I disagree with his judgment concerning the appeal of the plaintiff against the Municipality of Beacon Bay.
It, too, should be dismissed. My point of departure is the interpretation of s 2 of the Act, particularly ss (2)(c). Interpretation
concerns the meaning of the words used by the Legislature and it is
therefore useful to approach the task by referring to the
words used, and to leave extraneous considerations for
later. No constitutional principles were invoked or are
involved.
The scheme of s 2 is simple
1
. It prohibits the
institution of legal proceedings against a local
authority "unless" a condition has been met. The
1
In my analysis I confine myself to those aspects of s 2 that
are relevant to the present case.
3
condition requires of the plaintiff to give written
notice to the local authority "within 90 days as from the
day on which the debt became due". The "due" date has a settled meaning
—
it is the date on which the cause of action fully accrues
2.
The due date can be postponed by agreement (ss (2)(d)). Additionally, there are two deeming provisions concerning the due date. The
first relates to the instance where the debtor intentionally prevents the creditor from coming to know of the existence of the debt.
The second is to be found in ss (2)(c), the provision in contention:-
"(2) For the purposes of subsection (1) -(a)
(b)
...
(c)
a debt shall not be regarded as due before the first day on which the
creditor has knowledge of the identity of
2
Deloitte Haskins & Sells Consultants (Pty) Ltd v Bowthorpe
Hellerman Deutsch (Pty) Ltd
[1990] ZASCA 136
;
1991 (1) SA 525
(A) 532H-I. Further
references are collected in Snraga v Chalk
1994 (3) SA 145
(N) 153.
4
the debtor and the facts from which the
debt arose, or the first day on which the
creditor can acquire such knowledge by
the exercise of reasonable care, whichever is the earlier day;
(d) ... "
The effect of this provision is that the 90-day
period begins to run, not from the due date, but from the
first day on which the creditor
-
has knowledge of the identity of the debtor and
the facts from which the debt arose, or
—
can acquire such knowledge by the exercise of
reasonable care,
("whichever is the earlier").
The meaning of the first postulate is clear and
it involves a question of fact
—
that of actual
knowledge. The second postulate is couched in the alternative and it also concerns a question of fact,
albeit one more difficult to prove: on what day could
5
the creditor have acquired the knowledge by the exercise
of reasonable care? This postulate is not dependent upon the first not being present. Of concern is the "earlier"
of the two. The second must, as a matter of logic, coincide with or precede the first.
Is the ability of a creditor to acquire
knowledge by reasonable care subject to any conditions?
There are none in the Act. Marais JA, as I understand
his judgment, implies that there are. My problem is that
the conditions (maybe exceptions) have not been clearly
formulated; it has not been said what words or phrases
must be read into (or out of) the provision or what
"unusual" meaning has been attached to what word or
phrase. Nevertheless, it seems to me that he has two
situations in mind in which the creditor is entitled to
some leeway. The one is where he has no reason to doubt
the identity of the debtor and the other where he, by the
exercise of reasonable care, identifies the wrong debtor.
6
For the sake of argument I am prepared to accept that there might be policy reasons why a creditor in these
circumstances ought to be protected. But that is not the
question; the question is whether the Legislature intended to grant him protection. The fact that the Legislature, consciously or
unconsciously, did not give such protection in ss (2) (c) does not amount to an anomaly or absurdity.
The Act deals with competing interests: those
of plaintiffs and those of local authorities. It limits
the right of the plaintiff to institute action by
requiring notice within a very limited time period after
the relevant event. A plaintiff who requires more time
may make an application for relief in terms of s 4. The
court has then to weigh up the competing interests since
it must be satisfied that the debtor is not prejudiced by
the delay, and that by reason of special circumstances
the creditor could not reasonably have been expected to
7
serve the notice in time. It is therefore reasonable to assume that the intention of the Legislature was that
where special circumstances for a late notice exist, the
matter should be dealt with under s 4. Whether the extraordinary instances postulated by Marais JA fall
under s 4, I need not consider. My point is that, having
created a special mechanism in s 4 to deal with special cases, the otherwise clear language of ss (2)(c) cannot be modified by way
of judicial interpretation to also deal with some or all of them.
On the basis then that ss (2)(c) means what it
says, I turn to the facts of the case.
The date on which the plaintiff became aware of
the damage to his property is not referred to in the stated case. It is significant that it was omitted from par 26. As a matter of
necessary inference, however, it has to follow from par 19 that his knowledge ante-dated
the letter of 28 November 1991 because it was agreed that
8
that letter contained a statement of the plaintiff's
intention to hold the
Municipality
of
East London
liable.
Such intention is perforce dependent on knowledge.
The facts concerning the plaintiff's ability to
have established the identity of the debtor are simple. I did not understand the plaintiff's counsel to dispute
that it was very easy to determine which municipality was
in control of the burst pipe. A single call to the local
authority would have sufficed. So, too, a glance at the water account (see GAA4), a discussion with the tenant who reported the mishap
or the agent who managed the
property (par 11 and 33) and attended to the problem (par
18 and 22).
Counsel submitted that the fact that the plaintiff was at all material times resident in
Bophuthatswana
is not irrelevant. I agree, but there is no suggestion that, because of that circumstance, he could not quite easily have established
the identity of
9
the debtor. Counsel also submitted that it had not been
established that the insurer who wrote the letter, GAA6,
to the
Municipality
of
East London
was negligent in doing
so. I have some doubt about the validity of the
submission, but it is in any event misconceived. The
issue is not whether the insurer was negligent but
whether, acting on the plaintiff's behalf, it could by
the exercise of reasonable care, have established the
identity of the debtor.
3
On the stated case the insurer
did nothing at all. No reason is given as to why the
letter was addressed to the wrong municipality and there
is no allegation relating to the insurer's (or even the
plaintiff s) knowledge or belief. The salient facts
being within the special knowledge of the plaintiff, the
absence of any information in these regards can only
enure to the benefit of the debtor.
3
For the same reason I find it unhelpful and unnecessary to
consider GAA6 and 7.
10
Both appeals are dismissed with costs.
L T C HARMS JUDGE OF APPEAL
MAHOMED CJ
)
F H GROSSKOPF JA ) Concur
STREICHER AJA )
OF
SOUTH AFRICA
Case No 483/95
In the matter between:
G A ABRAHAMSE
Appellant
and
MUNICIPALITY
OF
EAST LONDON
& ANOTHER
1st Respondent
and
MUNICIPALITY
OF
BEACON
BAY
2nd Respondent
and
Case No 513/95
In the matter between:
MUNICIPALITY
OF
EAST LONDON
& ANOTHER
Appellant
and
G A ABRAHAMSE
Respondent
Coram
: MAHOMED CJ, F H GROSSKOPF, HARMS,
MARAIS JJA et STREICHER AJA
Date Heard
: 17 March 1997
Delivered
: 12 May 1997
JUDGMENT
2
MARAISJA
Broadly stated, the issue raised in these two appeals is
whether or not the plaintiff in the Court a quo had complied with sec
2 (1) (a) of the Limitation of Legal Proceedings (Provincial and Local
Authorities) Act 94 of 1970 ("the Act") prior to instituting a claim for
damages against two municipalities who were the defendants. I shall
refer to the parties as they were referred to in the Court a quo.
On 2 November 1991 a municipal water main burst and
flooded plaintiffs property at
42 Pentlands Place
,
Beacon
Bay
,
East
London
. On 28 October 1993 plaintiff issued summons in the East
London Circuit Local Division against both the
Municipality
of
East London
(first defendant) and the Municipality of Beacon Bay (second
defendant). Damages in the sum of R 93 187,21 were claimed from
first defendant, alternatively second defendant. The action was
3
founded upon the allegedly negligent conduct of either first or second
defendant. Plaintiff alleged in the particulars of claim that he had
complied with the terms of sec 2 of the Act in respect of both
defendants.
Sec 2 provides:
"(1) Subject to the provisions of this Act, no legal proceedings in
respect of any debt shall be instituted against an administration, local
authority or officer (hereinafter referred to as the debtor) -
(a)
unless the creditor has within 90 days as from the day on
which the debt became due, served a written notice of
such proceedings, in which are set out the facts from
which the debt arose and such particulars of such debt as
are within the knowledge of the creditor, on the debtor by
delivering it to him or by sending it to him by registered
post;
(b)
before the expiration of a period of ninety days as from
the day on which the notice contemplated in paragraph
(a) was served on the debtor, unless the debtor has in
writing denied liability for the debt before the expiration
of such period;
(c)
after a lapse of a period of twenty-four months as from
(a)
4
the day on which the debt became due.
(2) For the purposes of subsection (1) -
(a)
legal proceedings shall be deemed to be instituted by
service on the debtor of any process (including a notice
of any application to court and any other document by
which legal proceedings are commenced) in which the
creditor claims payment of the debt;
(b)
a debt shall, if the debtor intentionally prevents the
creditor from coming to know of the existence thereof,
not be regarded as due before the day on which the
creditor comes to know of the existence thereof;
(c)
a debt shall not be regarded as due before the first day on
which the creditor has knowledge of the identity of the
debtor and the facts from which the debt arose, or the
first day on which the creditor can acquire such
knowledge by the exercise of reasonable care, whichever
is the earlier day;
(d)
a period prescribed in paragraph (a) or (c) of that
subsection shall, in the case of a debt of which the due
date is postponed by agreement between the creditor and
the debtor, be calculated afresh as from the day on which
the debt again becomes due."
In addition to pleading over, first defendant raised a
5
special plea the gravamen of which was that plaintiffs claims against
it were unenforceable by reason of plaintiffs failure to comply with
sec 2 (1) (a) of the Act, or to seek a waiver by first defendant of its
right to rely upon such failure by way of defence, or to seek in terms
of sec 4 of the Act the Court's leave to serve the relevant notice after
the lapse of the prescribed period of 90 days. Second defendant
contented itself with a bare denial of plaintiffs allegation that he had
complied with the terms of sec 2.
The parties joined in stating a special case for the
consideration of the Court a quo in terms of Rule 33. It had been
admitted by plaintiff at a pre-trial conference that he had sought
neither a waiver by first defendant of its right to raise the defence
afforded by sec 2 (1) (a), nor the leave of the Court to serve the
relevant notice later than the prescribed period. Because the facts and
6
contentions set forth in the special case and the questions posed for
consideration in it are more than ordinarily material and significant in
the consideration of plaintiffs appeal against the upholding by the
Court a quo of second defendant's defence, I quote them in full.
"SPECIAL CASE IN TERMS OF RULE 33 (11 OF THE RULES OF
COURT
A.
PREAMBLE
1.
Plaintiff is GERALD ALBERT ABRAHAMSE, an adult male
and the owner of the property situated at
42 Pentlands Place
,
Beacon
Bay
,
East London
. The said property is hereinafter
referred to as 'the property'.
2.
First Defendant is THE MUNICIPALITY OF EAST LONDON,
which was at the date of the institution of action herein a
Municipality established in terms of the Municipal Ordinance 20
of 1974 (Cape), of the City Administrative Centre, 29 Oxford
Street, East London.
3.
Second Defendant is THE MUNICIPALITY OF BEACON
BAY, which was at the date of the institution of action herein a Municipality established in terms of the Municipal Ordinance
20 of 1974 (Cape), of the Civic Centre, Beacon Bay.
4.
Plaintiff sued Defendant for damages in the sum of R93 187,21
alleged by him to have been sustained on the 2nd November
1.
7
1991 as a result of the negligence of First Defendant,
alternatively of Second Defendant, in the control of certain
water pipe ("the pipe"), which as a result of the said negligence,
burst and flooded the property.
5.
Plaintiff has averred that he had complied with the provisions
of Section 2 of Act 94 of 1970 ("the Act").
6.
First
Defendant has pleaded raising a Special Plea and pleading
over to the merits. The Special Plea avers non-compliance with
the Act in that Plaintiff is alleged to have failed "to deliver or
send by registered post the notice contemplated by Section 2 (1)
(a) of the Act within a period of ninety days as from the day
uponwhich the alleged claim arose
"'
7.
Second
Defendant has denied Plaintiffs averment of compliance
with the Act.
8.
The parties have agreed to request this Honourable Court, in
terms of Rule 33 (4) of the Rules of Court, to order that the
issue of whether Plaintiff has complied with the Act be decided
before any evidence is led or separately from any other
question.
9.
The parties have further agreed upon the following written
statement of facts in the form of a special case for the
adjudication of this Honourable Court.
B.
STATEMENTS OF FACTS
10.
Plaintiff has been resident in Bophuthatswana from 1986 to
date.
11.
From 1986 to date the property has been administered by
10.
8
Periwinkle Estates of East London, ("Periwinkle"), upon a
mandate from Plaintiff to perform the following services:
11.1
to procure a tenant for the property, prepare a lease in
respect thereof, and secure the tenant's signature of same;
11.2
to receive rental payments by the tenant and to pay same
into Plaintiffs bond account with the South African
Permanent Building Society, and later its successors;
11.3
to attend upon complaints by the tenant, and to arrange, from time to time as the need arose for the effecting of
minor repairs to, or maintenance of, the property.
12.
When, damage in the sum of approximately R 300.00 was
caused to the property by a burst water pipe in November 1990
("the 1990 claim"), the tenant of the property reported same to
Periwinkle which reported it in turn to Plaintiffs insurers,
Mutual and Federal Insurance Company Limited ("Mutual") which made a claim upon First Defendant under reference E53863-002
which was not met by any denial by First
Defendant of responsibility for the relevant water reticulation
system.
13.
Mutual did not persist with the 1990 claim prior to the 28th
November 1991, due to the relatively trivial extent of same.
14.
Responsibility for the water reticulation system in Beacon Bay
was handed over by First Defendant to Second Defendant,
pursuant to agreement between the said parties, Second
Defendant accepting such responsibility from the 1st of July
12.
9
1991.
15.
During June, July, September and October 1991, a newsletter
was published by Second Defendant, copies of which were
delivered by hand to all residential and commercial premises
situate within Second Defendant's boundary. Copies of the said
newsletters bearing the dates June 1991, July 1991, September
1991 and October 1991, are annexed hereto marked "GAA1",
GAA2", GAA3" and "GAA4" respectively.
16.
Second Defendant caused a notice entitled "Proposed take-over
of water reticulation service" to be published in the Daily
Dispatch newsletter of the 11th of May 1991. Copy of the said
notice is annexed hereto marked "GAA5".
17.
Plaintiff was at no time apprised personally by First or Second
Defendant of such a transfer of responsibility or liability.
18.
The incident pleaded in paragraph 5 of Plaintiffs Particulars of
Claim ("the incident") caused the tenant of the property to report
same by telephone to a servant of Second Defendant at or about
03h45 on the 2 November 1991, and to report same to
Periwinkle, which in turn reported same to Mutual.
19.
Mutual gave written notice of the incident and of Plaintiffs
intention to hold First Defendant liable for same by letter dated
the 28 November 1991 sent by ordinary post, ("the first claim"),
a copy of which is annexed hereto marked "GAA6".
20.
The first claim was received by First Defendant on 2 December
1991.
21.
First Defendant's Insurers responded to the first claim by letter
dated 27 December 1991 advising that it was First Defendant's
19.
10
view that it was not negligent, as the cause of the pipe bursting
was that the pipe was defective. Copy of the said response is
annexed hereto marked "GAA7".
22.
Periwinkle thereafter, and upon the instruction of Mutual,
embarked upon securing quotations for the repair of the damage
caused by the incident ("the damage").
23.
That the damage had been established to be more extensive than at first concluded was reported by Periwinkle to Mutual which,
on or about the 14th of May 1992, accordingly appointed
Campbell and Williams, loss adjusters, to ascertain the precise
extent of the damage which Arm in turn employed consulting
engineers.
24.
The involvement of Campbell and Williams led to the discovery
that Second Defendant had, since the 1st of July 1991 become
responsible for the water main, the bursting of which had caused
the incident, and accordingly written notice of the damage and
the Plaintiffs intention to hold Second Defendant liable for
same was given to Second Defendant by Campbell and
Williams on behalf of Plaintiff, by letter sent by ordinary post
and dated the 3rd of June 1992 ("the second claim"). A copy
of the second claim is annexed hereto marked "GAA8".
25.
Second Defendant received the said claim on the 4th of June
1992.
26.
Plaintiff became personally aware on the 15th of April 1992 that
Second Defendant had assumed responsibility for the pipe.
27.
The pipe burst on the 7th of November 1990 and also on the
14th of July 1991 in the vicinity of Houses 40 and 42, Pentlands
25.
11
Place.
28.
The burst in the pipe in front of House 40 Pentlands Place on
the 14th of July 1991 was attended to by the Engineering
Department of Second Defendant from 04h30 to 15h30 on the
14th of July 1991.
29.
The incident was attended to by the Engineering Department of
Second Defendant and the work was completed by 12h45 on the
2nd of November 1991.
30.
A further burst or leakage in the pipe occurred on the 4th of
November 1991 between Houses 40 and 42 Pentlands Place at
llh00 which burst was repaired by the Engineering Department
of Second Defendant by 16h30 on the same day.
31.
The Engineering Department of Second Defendant re-laid a new
section of the pipe between numbers 24 and 46 Pentlands Place
during February 1992.
32.
All vehicles used in the work executed by the Engineering
Department of Second Defendant, and set out in paragraphs 28 and 31 inclusive above, had the badge and markings of Second
Defendant displayed thereon.
33.
One Muller of Periwinkle, who performed the mandate referred
to in paragraph 11 (above), did not know, during the period 2nd
November 1991 to 15th April 1992 whether it was First
Defendant, or Second Defendant, that was responsible for the pipe, but during the said period the said Muller assumed, by
virtue of the pipe being located within the boundaries of Second
Defendant, that Second Defendant was responsible for same.
34.
On the 27th of November 1991 and on the 30th of January 1992
33.
12
Campbell and Williams addressed letters to the Town Clerk of
the Second Defendant giving notice to Second Defendant on
behalf of parties other than the Plaintiff of damage sustained allegedly by burst pipe for which Second Defendant was liable.
Copies of the said letters are annexed hereto marked "GAA9"
and "GAA10" respectively.
34A. It is common cause that no other notice other than the letter of
28 November 1991 from Mutual and Federal Insurance Company was given to First Defendant.
C
THE PARTIES' CONTENTIONS
35.
Plaintiffs contentions
:
35.1 Plaintiff contends in regard to the service of Annexure
"GAA6" upon First Defendant that:
35.1.1
it was timeous in that it was effected by the
end of November alternatively the beginning
of December 1991;
35.1.2
the Annexure "GAA6" contained a sufficient
statement of the facts from which Plaintiffs
debt arose, and such particulars thereof as
were within the knowledge of Plaintiff;
35.1.3
it was "served" by "delivery" within the
meaning of Section 2 (1) (a) of the Act.
13
35.2 Plaintiff contends in regard to the service of Annexure
"GAA8" upon Second Defendant that:
35.2.1
such service was timeous in that it was
affected within ninety days of the first day
upon which Plaintiff had knowledge of
Second Defendant being the debtor, and the
facts from which such debt arose,
alternatively within ninety days of the first
day upon which Plaintiff was able to acquire
such knowledge of Second Defendant being
the debtor by the exercise of reasonable care,
and the facts from which such debt arose, ,
which date was, in either event, the 3rd of
June 1992;
35.2.2
the Annexure "GAA8" contained a sufficient
statement of the facts from which Plaintiffs
debt arose, and such, and such particulars
thereof as were within the knowledge of Plaintiff;
35.2.3
the annexure was "served" by "delivery"
within the meaning of Section 2 (1) (a) of
the Act.
36.
First Defendant's contentions
:
36.1 First Defendant contends in regard to Annexure "GAA6"
14
that the said annexure does not constitute a notice such as
is envisaged in Section 2 (1) of the Act in that:
36.1.1
the said letter does not give notice to the
First Defendant of legal proceedings contemplated;
36.1.2
the said letter does not contain facts from
which it could be inferred that it was
intended as notice of the threat of these
proceedings;
36.1.3
the said letter contains no particulars of the
debt or the extent thereof.
36.2
First Defendant contends in regard to the "service" of
Annexure "GAA6" upon First Defendant that:
36.2.1
the said letter was not served on the
Defendant by delivery to it;
36.2.2
the said letter was not sent to the Defendant
by registered post;
36.2.3
the letter was therefore not served as
required by Section 2 (1) of the Act.
36.3
First Defendant contends accordingly that Plaintiff had
failed to deliver or to send by registered post the notice
contemplated by Section 2 (1) (a) of the Act within a
period of ninety days as from the date upon which the
15
alleged claim arose.
37.
Second Defendant's contentions
:
37.1
Second Defendant contends that First Defendant's
contentions in regard to Annexure "GAA6" are similar to its contentions in regard to "GAA8" and prays that same
be incorporated herein.
37.2
Second Defendant contends that the cause of action "the
debt" occurred on 2 November 1991 and that Plaintiff
was required to notify Second Defendant in writing within
90 days thereof of his intention to institute legal
proceedings against Second Defendant. The letter of 3
June 1992 was received 7 months after the cause of
action arose and therefore long after the time allowed in
terms of Section 2 (1) (a) of Act 94 of 1970.
37.3
Second Defendant contends that Plaintiff and/or his
agent/s could have reasonably ascertained on 2 November
1991 that Second Defendant was a debtor in that it
assumed control and responsibility for the water
reticulation in Beacon Bay on 1 July 1991:
37.3.1 Second Defendant caused notices to be sent
to all owners and occupiers in Beacon Bay informing them that it had now taken over
the responsibility for water reticulation and
also set out the procedure to be followed
when a water pipe burst and/or leaked, and
16
also caused an advertisement to appear in the
Daily Dispatch informing the public of the
proposed take-over of the reticulation
system.
Vide paras
Statement of Facts
. 15 & 16
Annexures "GAA1" - "GAA5".
37.3.2 Second Defendant's employees attended to a
burst pipe in front of Plaintiffs house on 14
July 1991.
Vide
Statement of Facts No 27
Plaintiffs tenant advised Second Defendant
of the burst pipe or leakage at 03h45 on the
2nd November 1991, Vide
Statement of Fact No 18
Second Defendant's employees attended to
the repair of the said burst pipe and/or leak
on the 2 November 1991 Vide
Statement of Fact No 28
At all material times the vehicles used by the
Second Defendant in effecting the repairs
bore the coat of arms and name of Second
Defendant.
37.3.3 If Plaintiff or his agent had enquired from
the tenant they would have been informed that the burst pipe and leakage had been
reported to Second Defendant and that
Second Defendant had attended to the repair
17
thereof. Their failure in this regard is
unreasonable in the premises.
37.4
Second Defendant contends that Plaintiff and/or his agent
could have seen the activity of Second Defendant in
relaying a new stretch of water piping from house 14 to
house 45 in Pentlands Place during February 1992.
Vide
Statement of Facts No 30
37.5
In any event, Second Defendant contends that Plaintiff or
his agent/s could reasonably have ascertained the identity
of Second Defendant merely by placing a telephonic call
to Second Defendant's office or by making enquiries from
a local Beacon Bay plumber.
37.6
Second Defendant contends that Plaintiff cannot shelter
behind the unreasonable efforts of his agent/s to establish
the identity of Second Defendant, Vigilantibus non
dormientibus jura subveniunt.
37.7
Second Defendant contends that the fact of Plaintiff living
in Bophuthatswana, does not entitle him to be placed in
a better position than a house owner living in Beacon
Bay.
37.8
Second Defendant contends that Plaintiff could have
discovered by reasonable care and effort the identity of
Second Defendant on or before 27 December 1991, the
date Campbell and Williams sent a letter on behalf of
UBS Insurers to Second Defendant claiming damages.
Vide
31A of Statement of Facts. "GAA9"
37.4
18
Second Defendant also contends that Plaintiff could have,
by reasonable care and effort discovered Second
Defendant's identity on or before 30 January 1992, the
date Campbell and Williams wrote to Second Defendant
on behalf of UBS Insurers claiming damage as set out in
"GAA10".
Vide
31B Statement of Fact
37.9 Second Defendant contends that at all material times
hereto Mutual and Federal at East London branch were
acting as agents for Plaintiff.
38. This Honourable Court is requested to find, on the basis of the
above contentions, whether Plaintiff complied with Section 2 (1) (a)
of Act 94 of 1970 in respect of both Defendants, alternatively in
respect of First Defendant only, alternatively in respect of Second
Defendant only, alternatively Plaintiff failed to comply with the said statutory requirement in respect of both Defendants, (sic)"
I refrain from quoting verbatim annexures "GAA1",
"GAA2", "GAA3", "GAA4" and "GAA5". It suffices to say that
anyone who saw them would have realised that as from 1 July 1991
the Beacon Bay Municipality would take over or had taken over from
the East London Municipality the water reticulation system within
19
Beacon Bay.
"GAA6", the letter from Mutual and Federal Insurance Company
Limited, read:
"28/11/91
The City Engineer
East London Municipality
EAST LONDON
OUR REF: MRS J SCOTT AA
Dear Sir
OUR INSURED G A ABRAHAMSE
OUR CLAIMS E536863-002& E582776-002
CIRCUMSTANCES WATER DAMAGE TO PROPERTY AT 42
PENTLANDS PLACE, BEACON BAY
We are the comprehensive insurers of Number 42 Pentlands Place,
owned by G Abrahamse.
On the 07 November 1990 and 02 November 1991 respectively a
municipal water mains pipe burst in front of the Insured's property,
flooding the grounds and causing damage to the Insured's swimming
pool on both occasions, as well as the driveway and the wall surrounding the pool.
We are therefore holding the East London Municipality liable for all
damages caused by the above and our quotations and Final Repair
Invoice will be forwarded to you in due course for reimbursement. As this is becoming a frequent event we would suggest that you look
into the matter in order to prevent this occurrence from happening
20
again.
Enclosed please find a copy of quote and Final Invoice in respect of
damage which occurred on the 07 November 1990. We look forward
to receiving reimbursement of R316.50 in due course.
If, however, you are insured for losses of this nature we suggest that
this letter be handed to your Insurance Company in order that they
may deal with the matter on your behalf.
Yours faithfully
(SIGNED)
for BRANCH MANAGER"
The relevant parts of "GAA7", the letter from the Standard General
Insurance Company Limited, read:
" 'Without Prejudice'
To: MUTUAL & FEDERAL Date: 27/12/91
Address P O Box 608 EL Your Ref Mrs J Scott
Our Ref: Miss Wood
Your Insured: G A Abrahamse
Our Insured: ELM
Your claim: E536863-002
Our claim No Tba-Ref 166/991 Your Policy No
Our memo of: 28/11/91
Refers/is acknowledged
REMARKS
According to our Insured and the circumstances we do not feel that
our Insured was negligent as the cause of the pipe bursting, was due
to the pipe being defective and not due to negligence on the part of
our Insured. Our file remains closed.
21
(SIGNED)
Signature"
"GAA8", the letter from Campbell & Williams, read:
"3 June 1992
The Town Clerk
Beacon Bay Municipality
P O Box 2001
BEACON BAY
5205
Dear Sir
FRACTURING OF WATER MAIN : 42 PENTLANDS PLACE :
House G ABRAHAMSE
We act for the Insurers of the above party. On the 7th November
1990 and again on the 2nd November 1991, the municipal water main
in Pentlands Place burst in front of the above property, flooding the
grounds and causing damage to the swimming pool and surrounding
walls as well as to the driveway.
Extensive damages have been caused and we invite your Inspector to
view the damage prior to it being repaired.
Such repairs are being supervised by Consulting Engineers and are
expected to be fairly costly. The costs thereof are not yet established.
Kindly take notice of our Principal's intention to hold the Municipality
liable for the damages on the basis that it is considered they have been
negligent in not replacing the defective water main within a reasonable
period of time following numerous fractures in the Beacon Bay area
22
and in particular in the area of the above property in November of
1990.
Yours faithfully
CAMPBELL & WILLIAMS (PTY) LIMITED
(SIGNED)
MA LOPPNOW"
"GAA9" and GAA10" were letters written respectively on
27 December 1991 and 30 January 1992 by Campbell & Williams to
the Town Clerk of second defendant on behalf of the insurers of two
other properties in Beacon Bay. Reimbursement was sought for
damages caused by burst water mains on 17 November 1990 and 22
November 1991 respectively.
The Court a quo (Van Rensburg J) decided that plaintiff
had complied with sec 2 vis-
-vis first defendant but had not done so
vis-
-vis second defendant. With the leave of the Court a quo plaintiff
appeals against the finding that he had not complied with sec 2 in so
23
far as second defendant is concerned, and first defendant appeals
against the finding that plaintiff had so complied as far as first
defendant is concerned.
The appeal of first defendant (The Municipality of East London)
Counsel for first defendant confined his submissions to a
single and narrow point. He contended that the letter ("GAA6") sent
to first defendant did not notify it sufficiently or at all of an intention
to institute legal proceedings should liability be disputed. While
conceding that an explicit statement to that effect was not essential and
that it would suffice if that was implicit in the letter (Maponya v
Minister of Police and Another
1983 (2) SA 616
(A) 620D; Sibeko
and Another v Minister of Police and Others
1985 (1) SA 151
(W)
166H-I; Minister van Wet en Order en 'n Ander v Hendricks
[1987] ZASCA 55
;
1987 (3) SA 657
(A) 663D-664G), he argued that no such implication
24
existed in "GAA6". He contrasted the contents of that letter with the
contents of letters in other cases in which such an implication had
been found to exist and sought to show that "GAA6" suffered by
comparison and that an intention to institute legal proceedings could
not be inferred. As E M Grosskopf JA observed in the case of
Hendricks, supra at 663G, this is a question of fact and previous
decisions are of limited value in answering it. It is true that it is not
a lawyer's letter, that it does not bear a litigious heading such as "G
A Abrahamse v Municipality of East London", and that in so far as the
first claim made in it is concerned, the letter was not sent within the
period of 90 days for which sec 2 makes provision. On the other
hand, the letter is rather more than a routine covering letter enclosing
an invoice reflecting a debt due by first defendant for goods supplied
to it. It refers to "claims" arising out of damage to property caused by
25
flooding as a consequence of a municipal water mains pipe bursting
on two separate occasions and asserts that"We are therefore holding
the East London Municipality liable for all damages caused by the
above and our quotations and Final Repair Invoice will be forwarded
to you in due course for reimbursement". I think that that terminology
is redolent of potential litigation if liability is denied and I have no
doubt that it would have been so understood by first defendant. First
defendant's insurer and first defendant clearly understood the letter to
impute negligence to first defendant for in the reply ("GAA7") there
is a denial of any negligence on first defendant's part. In my opinion,
it was implicit in the letter ("GAA6") that legal proceedings would
result if liability was disputed and consequently the purpose which sec 2 is there to achieve was met. The letter served to put first
defendant
on inquiry and afforded an early opportunity to it to investigate the
26
matter and to avoid litigation if so advised. The learned judge in the
Court a quo was therefore correct in upholding plaintiffs contention
in that regard. First defendant's appeal is dismissed with costs.
The appeal of plaintiff
It is necessary to preface consideration of the facts of this
case with some observations about the interpretation of sec 2 of the
Act. The purpose of legislation like this is plain and has been set
forth in so many cases that their citation yet again seems unnecessary. In this instance it is to protect a local authority against
precipitate
citation of it in a lawsuit by a litigant seeking to obtain payment of a
debt allegedly due by the local authority. It is aimed at providing a
local authority with an opportunity of investigating the matter sooner
rather than later when investigations might prove more difficult, of
considering its position, and, if so advised, of paying or compromising
27
the debt before becoming embroiled in costly litigation. What has
received somewhat less attention is the relationship between the first
part of sec 2 (2) (c) which reads "before the first day on which the
creditor has knowledge of the identity of the debtor and the facts from which the debt arose" and the second part which reads
"or the first day
on which the creditor can acquire such knowledge by the exercise of reasonable care, whichever is the earlier day". What the
subsection
postulates is, on the one hand, a creditor who knows these things and,
on the other, one who does not. Time begins to run against a creditor
who knows from the date upon which he knew. However, it is
obvious that if his belief is erroneous and not in accord with the facts,
time cannot begin to run against him from the date upon which he
erroneously believed he knew. For time to commence running against
a claimant in terms of the first part of the subsection, he must know
28
the true identity of the debtor and the true facts. Knowledge of
anything less will not trigger the running of time against him.
What seems equally beyond doubt is that the second part
of the subsection is there to avoid what would have been the
unacceptable consequences of the first part, if the second part were not
there. But for the inclusion of the second part, the date upon which
time would commence to run against a claimant would depend solely
upon when the identity of the debtor and the facts actually became
known to him. As long as he did not know these things and however
remiss he might have been in failing to make enquiries into them, it
would not matter; time would not run against him. That would have
rewarded continuing inexcusable inaction on the part of the creditor
and have frustrated one of the main purposes of the legislation,
namely, to afford a local authority an early opportunity of investigation
29
before the lapse of time had made investigations more difficult. Hence
the second part of the subsection. It is noteworthy that it does not
limit the potential open-endedness of the first part by laying down an
outer limit consisting of an arbitrary period of time. What it does is
to provide a notional day upon which time will commence to run
against a claimant who does not know the identity of the debtor or the
facts from which the debt arose. That notional day is not to be
determined by reference to the expiry of any particular period of time
since the debt actually became due; it is to be determined by the
result of another notional inquiry, namely, on what day could the
claimant have acquired knowledge of the identity of the debtor and the
facts from which the debt arose by the exercise of reasonable care?
In passing I mention that this obviously cannot mean that the day in
question must be a day on which knowledge of both the identity of
30
the debtor and the facts giving rise to the debt could have been
acquired simultaneously. It may be, for example, that the facts giving
rise to the debt are known upon the happening of a particular event
which causes damage, but that the identity of the debtor is not, and
could not have been, known then. Manifestly, what the legislature had
in mind is a day by which both these things could have been known
by the exercise of reasonable care. The fact that there is an earlier day
by which one of these things could have been known or was in fact
known, is immaterial.
The criteria provided by the legislature for the
ascertainment of the notional day take account, as one would expect,
of the infinitely variable circumstances which could exist and the widely differing nature of the difficulties which might confront
a
claimant intent upon acquiring knowledge of the identity of his debtor
31
or of the facts giving rise to the debt. In one case that day might be
no more than a week after the occurrence giving rise to the debt; in
another it might be two years later. In the latter case, it is no doubt
so that the local authority may be deprived of the benefit of early
investigation which the Act is designed to provide but that is an
inevitable consequence of the balance which the legislature has
decided must be struck between the interests of the claimant and the
interests of a local authority. It was plainly not prepared to strip of
what might have been a rightful claim a claimant who neither knew,
nor by the exercise of reasonable care could have known, of the facts
giving rise to the claim or the identity of the debtor. As was said of
a similar provision in the Prescription Act 68 of 1989, it is "obviously
based on an equitable principle".
Protea International (Pty) Ltd v
Peat Marwick Mitchell & Co
[1990] ZASCA 16
;
1990 (2) SA 566
(A) 569E .
32
While the second part of the subsection postulates a
notional date, it by no means follows that the ascertainment of that
date is an inquiry in abstracto divorced from what was actually done
or what actually happened in that regard in a particular case. Cf
Brand v Williams
1988 (3) SA 908
(C) 915H-916B;
Administrator. Cape v Olpin
1996 (1) SA 569
(C) 578A-581H. If the claimant did
in fact exercise reasonable care account must surely be taken of what actually happened as a consequence of exercising reasonable
care. If,
despite the exercise of reasonable care by a claimant, he has on a
particular day not acquired correct information as to the identity of the
debtor but erroneous information which misleads him to believe that the identity of the debtor is now known to him, and that causes
him
to refrain from any further inquiry, I fail to see how it can be said that
that or any other day is the day on which he could have acquired the
33
correct information by the exercise of reasonable care simply because
he could have got the correct information if he had taken other
additional steps which would also have amounted to taking reasonable
care. It would be a contradiction in terms: if he exercised reasonable
care in acquiring the information, and cannot be said to be guilty of want of care in accepting it, but it happens to be erroneous,
by what
process of reasoning can one arrive at the conclusion that that or any
other day is the day upon which he could have acquired the correct
information by exercising reasonable care? I see none.
It might be suggested that the second part of the sub-
section envisages an objective review of what conceivable avenues of
enquiry existed, and a consideration of whether a resort to one or other
or all of them would have resulted in the true identity of the debtor
becoming known, and whether a creditor exercising reasonable care
34
would or should have resorted to one, more, or all of them. That is
no doubt the appropriate approach where the claimant is aware that he
needs to ascertain the identity of the debtor because it is unknown to
him. It does not follow that it is an appropriate approach when the
creditor is, for good reason, oblivious of the fact that he needs to
ascertain the identity of the debtor because, for equally good reason, he believes that he knows the identity of the debtor. In such
a case I
think an analysis of the situation shows first, that the creditor did not in truth know the identity of the debtor but that his belief
that he did,
is in no way culpable, and secondly, that there was therefore no reason
why he should have applied his mind to what further steps he should
take to identify his debtor. The point is that if reasonable care has
already been exercised in identifying the debtor, but for reasons
peculiar to the case and for which the creditor is not to blame, the
35
identification is erroneous, one cannot escape the fact that reasonable care was exercised but, unbeknown to the creditor, it did
not result in the creditor acquiring knowledge of the true identity of the debtor. In
such circumstances it seems to me to be idle to pose hypothetical
questions going to what other possible ways of establishing the
debtor's identity might have been resorted to and to assess whether
they would have resulted in a correct identification.
A creditor who has exercised reasonable care in identifying his debtor and believes on good grounds that he has
correctly identified him, has done all that the statute requires of him.
The fact that in the particular circumstances of the case it has yielded
the wrong information is unfortunate for it may mean that the true
debtor will not receive timeous notice of the claimant's intention to
sue, but I see no escape from the consequence that flows inexorably
36
from such a situation, namely, that it is not possible to postulate, far
less actually determine, another day upon which the exercise of
reasonable care would have resulted in a correct identification of the
debtor. In short, for as long as the erroneous identification arrived at
by the exercise of reasonable care continues to be believed with good
reason by the creditor to be a correct identification, it will be impossible to show that by exercising reasonable care he would have
been able to identify the true debtor any earlier than the day upon
which he learns or should have learnt that the identification was erroneous.
Any other interpretation of the provision would produce
results so absurd that they could never have been intended by the
legislature. In saying this I am aware of the fact that the existence of
anomalies is not sufficient justification for departing from the clear
37
meaning of a statute. But there is a well recognised and conceptually
clear distinction between mere anomalies and palpable absurdity. It
has correctly been observed that statutory provisions such as this
penalise "negligent, rather than innocent, inaction". See
Administrator. Cape v Olpin
1996 (1) SA 569
(C) 578A-B. To
interpret this provision in such a way as to penalise "innocent inaction"
which did not result from any failure to exercise reasonable care,
would produce a result quite contrary to that so plainly intended by the
legislature. In my opinion, the language in which the subsection is
couched falls far short of "clearly" meaning that the penalty is to be
paid even in such circumstances.
One has merely to pose the following example to
demonstrate the absurdity inherent in such an interpretation. A
resident of Beacon Bay who suffers similar damage is aware that there
38
has been public debate about the possibility of the East London
Municipality handing over responsibility for water reticulation to the
Beacon Bay Municipality and he is unsure whether that has happened.
He telephones the relevant department at the East London Municipality
to enquire what the position is and is told that the taking over of
responsibility has occurred but that it was on a date subsequent to the
occurrence of the damage. The information as to the date happens to
be wrong. It was a date before the occurrence of the damage. The
person giving the erroneous information is a senior official in the
department. On the strength of the information so given, the resident
gives notice in terms of sec 2 to the East London Municipality. He
receives a reply when more than 90 days have elapsed since the
occurrence of the event. He is told that the Beacon Bay Municipality had taken over responsibility by the relevant date and that the
East
39
London Municipality denies liability. He immediately gives notice in
terms of sec 2 to the Beacon Bay Municipality. Can the latter be
heard to say that although in fact he only acquired knowledge of its
identity as his debtor on the day he received the East London
Municipality's reply, he could have ascertained the true identity of his
debtor earlier by the exercise of reasonable care? I think not.
Reasonable care was precisely what he exercised yet it did not result
in his acquiring knowledge of the true identity of his debtor.
It is no answer to say that the doctrine of estoppel may
enable him to proceed with his claim against the Beacon Bay Municipality. It was not its conduct which misled him and no
estoppel can arise against it. Nor is it an answer to say that the East
London Municipality may be liable to him. It is trite that estoppel
cannot found a cause of action where none exists and in so far as an
40
action for damages for negligent statements causing economic loss
may be a possible remedy, that begs the question of whether or not he
has indeed been barred by sec 2 from proceeding against the Beacon
Bay Municipality. It is only if he is barred that a remedy against the
East London Municipality might exist.
The example I have posed is but one illustration of how
it can come to pass that a claimant, without any want of care on his
part, may acquire erroneous information which results in his not
acquiring correct information until 90 days have passed since the
occurrence of the event which gives rise to the debt. Many other
illustrations can be given and they cannot be dismissed as far-fetched
or so unlikely to happen that the legislature was content not to cater
for them.
In reaching this conclusion as to the interpretation of the
41
Act, I have not overlooked the provisions of subsection (2) (b) or sec
4 of the Act. Neither, so it seems to me, derogates from the
interpretation I have placed upon subsection (2) (c). Subsection 2 (b)
deals with another situation altogether, namely, one in which the
debtor intentionally prevents the creditor from coming to know of the
very existence of the debt. In such a case, whether the creditor would
or could by the exercise of reasonable care have learnt of the existence of the debt is irrelevant. It is not regarded as due until
"the day upon
which the creditor comes to know of the existence thereof". Sec 4 is
only of application where the creditor has "failed to comply with the
provisions of paragraph (a) of subsection (1) of section 2". There can
only be a failure to comply if there has been a failure to give the
requisite notice within 90 days of "the day upon which the debt
became due". By virtue of the provisions of subsection (2) the due
42
date may have to be regarded as having dawned more than 90 days
after the debt in fact became due. In that event, there will have been
no failure to comply with sec 2 (1) (a) if a notice is served within 90
days of the day upon which the debt is regarded as having fallen due
and therefore sec 4 can have no application.
With that prelude I turn to the facts of this case. The
parties' election to place them before the court by way of a special case has resulted in a situation which is somewhat unsatisfactory
in
that not all the information which is relevant to the questions which
were posed was provided. Thus, one does not know when plaintiff
personally learnt of the flooding which occurred on 2 November 1991,
nor whether he was privy to the report to second defendant made by the tenant of the property, or to the report made by Periwinkle
to Mutual, nor what, if anything, Mutual was told by Periwinkle about
43
which municipality was the responsible municipality. However, the
lack of information in those respects cannot enure to the disadvantage
of plaintiff. It was not disputed that the onus of proving that plaintiff
knew, or by the exercise of reasonable care could have known, earlier
than 15 April 1992 that second defendant had taken over responsibility
for the water mains, rested upon second defendant.
Administrateur.
Kaap v Burger
[1993] ZASCA 44
;
1993 (3) SA 414
(A) 422D-E. Where parties have
confined the court to a consideration of an agreed set of facts in
circumstances in which one of them is burdened with an onus of
proof, it is not open to the court to infer the existence of other facts
unfavourable to the party unburdened by the onus of proof unless of
course the inference is the only inference that can be drawn or the
most probable of the possible inferences which can be drawn.
In my view, second defendant has not shown that plaintiff
44
knew, or by exercising reasonable care could have known, earlier than
15 April 1992 that second defendant had taken over responsibility for
the water mains in Beacon Bay. The taking over by one municipality of responsibility for water reticulation which had previously been
borne by another is, in my opinion, not something which should
reasonably be anticipated or foreseen by an absentee property owner.
The earlier flooding incident in November 1990 had resulted in the
intimation of a claim to first defendant which was in fact the
responsible party at that time. While the claim was not paid, it was
not met by any denial by first defendant of responsibility for the water
reticulation system, nor could it have been, for it was indeed
responsible.
The publicity given to the takeover of responsibility, the
newsletters delivered to residential premises, and the activities of
45
second defendant's servants when water pipes burst within second
defendant's boundaries, no doubt resulted in those of the owners of property in Beacon Bay who actually resided there becoming aware
of
the takeover but it is an agreed fact that they did not result in plaintiff
personally becoming aware of it until 15 April 1992. Nor, as I see it, was there any reason for plaintiff to have entertained any
doubt as to
who was responsible for the water reticulation. He was certainly not
shown to have been personally guilty of any want of care in failing to
learn until 15 April 1992 that second defendant and not first defendant
was the true debtor.
As for Periwinkle, its mandate was limited to performing the functions listed in para 11 of the Statement of Facts. While its
representative Muller was uncertain where responsibility for water
reticulation lay at the relevant time, there is nothing to show that he
46
communicated his uncertainty to Mutual when reporting the incident
to it. If he did not, his failure to do so is not something for which
plaintiff is vicariously responsible and for which plaintiff must suffer.
His uncertainty can no more be imputed to plaintiff than any
knowledge he might have had of second defendant's newsletters, press
notice, and physical activities when water pipes burst, could have been
imputed to plaintiff.
The Court a quo was required to deal with the case on the
footing that Mutual's letter of 28 November 1991 to first defendant
was notice "of plaintiffs intention to hold first defendant liable" (para
19 of the Statement of Facts) and second defendant contended before
the Court a quo that Mutual was "at all material times
acting as
agent(s) for plaintiff". Even if it be assumed that a want of care by
Mutual in concluding that first defendant was the debtor would have
47
to be imputed to plaintiff, I do not think that any want of care existed
or was shown to have existed. It was for second defendant to show
that by exercising reasonable care Mutual could have learnt earlier
than plaintiff did that second defendant, and not first defendant, was
the debtor.
The learned judge in the Court a quo dealt with the
question in this way. Starting from the premise that Mutual erred
culpably in writing to first defendant when "it must obviously have
been aware of the fact that the plaintiffs property was situate in
Beacon Bay", he rejected the contention that Mutual was fortified in
its belief that it was addressing the correct party by first defendant's
reply ("GAA7"). It will be recalled that in that reply liability was
denied for the reason that first defendant had not been negligent but
no mention whatsoever was made of second defendant having taken
48
over responsibility for the water mains. He rejected that contention because there were two claims referred to in Mutual's letter
each of
which was separately numbered E536863-002 and E582776-002. The
claims related to two separate incidents: the flooding of 7 November
1990 and the flooding of 2 November 1991. The learned judge
thought it "significant" that in the reply only one of the claim numbers
(E536863-002) was referred to when liability was denied. That claim
number related to the flooding of 7 November 1990. He regarded it
as "obvious" that the denial of negligence was confined to that claim
only "because it arose out of events which occurred while the first
defendant was still responsible for the water main in question and that
Standard General "ignored the other claim because it arose out of
events which occurred at a time when responsibility for the relevant water main rested in the second defendant". He proceeded
to say that
49
whatever the position was between plaintiff and first defendant, it was
of no concern to second defendant who was not a party to any of
those communications. He regarded Mutual's addressing of its letter
to first defendant as a "mistake they should not have made". He
continued: "They should have realised that a water main situated in the Beacon Bay area was the responsibility of the second
defendant.
If they were in any doubt about this, such doubt could have been
removed by simple enquiry".
Observing that there had been no fault on the part of
second defendant which had done all that could reasonably have been
expected of it to notify property owners that it had taken over
responsibility for water reticulation, he said that plaintiffs absence in
Bophuthatswana "at all material times" could not "place him in any
better position than had he been residing in East London". His
50
conclusion was that Mutual was "handling the matter on his behalf and
(its) acts or omissions must be imputed to him", and that second
defendant had discharged the onus of establishing that by the exercise
of reasonable care plaintiff could have established the correct identity
of his debtor within the 90 day period envisaged by the Act or at best
for him, by before 6 March 1992.
I am unable to agree. I do not consider that it should
have been obvious to Mutual that because the property was in Beacon
Bay it was to second defendant that it should write. The fact of the
matter was that despite the location of the property in the Beacon Bay
area, the first defendant had been responsible for the water mains until
1 July 1991. Moreover, Mutual had on a previous occasion written to
first defendant in connection with a similar claim and no disavowal of
responsibility on the ground of an agreed transfer of responsibility was
51
received. Just as there was no reason for plaintiff to doubt that first
defendant was still responsible for the water mains in November 1991,
so there was no reason for Mutual to do so when it wrote to first
defendant on 28 November 1991 ("GAA6").
As for the learned judge's interpretation of Standard
General's reply ("GAA7"), it was not open to him to construe it in the
manner in which he did. Apart from the fact that, for reasons which
I shall give in due course, it was not the interpretation which should
have been given to it, the parties had pre-empted any argument about
its interpretation by agreeing in para 21 read with paras 18, 19 and 20 of the Statement of Facts that "First Defendant's insurers
responded to
the first claim (defined in para 19 as meaning the flooding incident
which occurred on 2 November 1991) by letter dated 27 December
1991 advising that it was First Defendant's view that it was not
52
negligent, as the cause of the pipe bursting was that the pipe was
defective". Para 21 continued: "Copy of the said response is annexed
hereto marked "G". This quite plainly means that there was no issue
between the parties as to what was meant to be and was conveyed by
Standard General's reply and it was certainly not that only the claim
arising out of the flooding which occurred on 7 November 1990 was being specifically answered and that the claim arising out of the
flooding which occurred on 2 November 1991 was being ignored
because of the takeover of responsibility by second defendant. On the
contrary, the parties joined in regarding it as an answer to the latter
claim and, as has been emphasised, the answer was confined to a
denial of any negligence.
In any event, in my view, it is not so that the reply should
reasonably have been read as impliedly informing Mutual that the
53
other claim was not first defendant's responsibility but second
defendant's by reason of an agreed transfer of responsibility. If that
is what it was supposed to convey, why was it not said? It was a
simple enough explanation to give. And if it was not given, and the
reply really was confined deliberately only to the claim arising from
the flooding on 7 November 1990, it would surely have been
appreciated by the writer that the recipient would not know what first
defendant's response was to the claim arising from the flooding of 2
November 1991. To attribute to the writer of "GAA8" a deliberate
intention to mystify the recipient in that manner strikes me as casting
a quite unjustified reflection of deviousness upon her. It seems far more probable than not that the denial of negligence was put
forward
as the defence to both claims. I am not overly impressed with the
reference in the reply to only one claim number. This was not a
54
communication the whole of which had to be drafted by the sender. It was a printed form which required completion. It is cryptic in
formulation and the manner in which it was completed shows that no
great care was taken in completing it. Thus, in that part of it which
refers to the "memo of 28/11/91" the words "your" and "letter" which
appear as alternatives to the words "our" and "memo" respectively in
the printed form, have been deleted and the words "our" and "memo"
allowed to remain, thus creating the impression that it is a
memorandum of Standard General's which is being referred to whereas
it is quite apparent that what is being referred to is Mutual's letter of
28 November 1991. I say this because, if it were not, there would be
no reference to what particular communication it is to which Standard
General is replying other than the undated reference to claim no
E536863-002. I consider it to be quite unrealistic to suppose that this
55
reply was intended to be read as a response to only that claim and that
the other claim was intended to be met by only a studied silence. It
is, in my view, a far more natural reading of the reply to read it as a
reply to both claims and the reference to the number of only one of
them as being simply due to the writer of the reply thinking that it
would suffice for reference purposes to cite the first claim number
only because she would also be referring in reply to Mutual's letter of
28 November 1991, and that those references would suffice.
The learned judge's dismissal of what passed between
Mutual and Standard General as being of no concern to second
defendant was also misplaced. It was highly relevant to the question
of whether reasonable care had been taken to identify the debtor. His
reference to an absence of fault on the part of second respondent,
while factually correct, was of little, if any, relevance in the
56
circumstances of the case. In my view, the learned judge's acceptance
of the proposition that plaintiffs absence in Bophuthatswana "could
not place him in any better position than if he had been residing in
East London" was not justified. There is no duty cast upon a property
owner to reside in his property and if he lives elsewhere and it is
damaged, the question is not when a person living in or near where his property is situated could have learnt of the facts giving
rise to the debt and the identity of the debtor by exercising reasonable care, but
when a person in the position of the plaintiff could have done so.
As for the imputation to plaintiff of the acts and omissions
of Mutual, I have already explained why, even if such imputation is
assumed to be permissible, Mutual did not fail to exercise reasonable
care.
In my opinion, second defendant failed to prove that by
57
exercising reasonable care plaintiff could have learnt of the true
identity of his debtor any earlier than he did. I would uphold
plaintiffs appeal with costs and substitute for order 2 of the Court a
quo the following order:
"2 That in so far as the Plaintiffs claim against the Second Defendant is concerned, the issue raised in the Stated
Case is decided in favour of the Plaintiff with costs."
R M
MARIAS
JUDGE OF APPEAL