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[2018] ZASCA 3
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Frieslaar NO and Others v Ackerman and Another (1242/2016) [2018] ZASCA 3 (2 February 2018)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
no: 1242/2016
In
the matter between:
GLENWIN
FRIESLAAR
NO
FIRST APPELLANT
ANGELINE
FRIESLAAR
NO
SECOND APPELLANT
G
& I PLUMBERS
CC
THIRD APPELLANT
and
PETRUS
ANDRE ACKERMAN
FIRST RESPONDENT
ADLU
PROJECTS
CC
SECOND RESPONDENT
Neutral
citation:
Frieslaar
NO v Ackerman
(1242/2016)
[2017] ZASCA
03
(02 February 2018)
Coram:
Ponnan, Seriti, Petse and Mocumie JJA
and Mokgohloa AJA
Heard:
21 November 2017
Delivered:
02 February 2017
Summary
:
Prescription:
extinctive prescription:
Prescription Act 68 of 1969
,
ss 10
,
11
and
12
: obligation to pay transfer costs and to transfer property sold
constituting a debt which is susceptible to prescription: date of
commencement of the running of prescription: running of prescription
commences once the creditor has acquired right to claim the
debt.
ORDER
On
appeal from
:
North
West Division of the High Court, Mahikeng (Gutta J, Hendricks and
Gura JJ concurring sitting as court of appeal).
The
appeal is dismissed with costs.
JUDGMENT
Petse
JA (Seriti and Mocumie JJA and Mokgohloa AJA concurring):
[1]
This appeal, once again, raises the perennial issue of when a debt
falls due for purposes of prescription as contemplated in
s 12(1) of
the Prescription Act 68 of 1969 (the
Prescription Act). The
proceedings emanated in an action instituted by the first and second
appellants in their capacities as trustees of the Frieslaar
Family
Trust (the Trust) jointly with the third appellant, G & I
Plumbers CC against the first respondent, Mr Petrus Andre
Ackerman
and alternatively against the second respondent, Adlu Projects CC, in
which the appellants sought the following relief:
‘
1.
An order in terms whereof it is declared that the purported
cancellation by the first [respondent] alternatively second
[respondent]
of the agreements in relation to the Kaldi Place
properties and the Barrish Place properties were not validly
effected;
2.
The further agreements in relation to the Kaldi Place properties and
the Barrish Place properties are valid and binding between
the
parties thereto;
3.
The first and/or second [respondents] are ordered to take all such
steps required in order to give transfer of ownership in relation
to
the Kaldi Place properties and the Barrish Place properties to the
first and second [appellants], alternatively that the sheriff
of [the
court below] is authorised to take all such steps in order to effect
transfer of ownership to the first and second [appellants];
4.
In the alternative to prayer 3 above, the first/second [respondent]
are ordered to make payment to the first and second [appellants]
in
the sum of R2, 160, 000;
.
. .’
[2]
As is apparent from the relief sought in terms of prayer 4 above, the
appellants also claimed, in the alternative, payment of
damages in
the sum of R2 160 000 with interest of 15.5% per annum. The
damages claim represented moneys allegedly owed
by Adlu Projects CC
to G & I Plumbers CC in respect of material supplied and services
rendered by the latter to the former.
In either event, the
appellants, in addition, claimed costs of suit. Several grounds were
relied upon in support of the claim.
The appellants’ summons
was served on the respondents on 7 March 2013. In what follows I
shall, for the sake of convenience,
refer to Ackerman and Adlu
Projects CC collectively as the respondents.
[3]
The action related to four pieces of immovable property sold by the
respondents to the Trust pursuant to agreements of sale
couched in
identical terms, concluded on 25 February 2010. The respective
agreements of sale, inter alia, contained the following
terms:
‘
15.2
Possession of the properties would be given to the Trust and the
Trust would be obliged to take possession thereof on 1 March
2010
from which date the Trust would be liable for all municipal rates and
taxes and body corporate levies, and /or fees payable
on the
properties, and from which date the properties would be the sole
risk, profit or loss of the Trust; and
15.3
The parties agreed that the agreement constituted the entire
agreement between the parties and that there would be no other
conditions, stipulations, warranties or representations whatsoever
made, other that such as which was included in the agreement
and
signed by the parties.’
[4]
Clause 7.1 of the agreements also contained the following term and
obligation imposed on the respondents as the sellers and
enforceable
by the Trust as the purchaser:
‘
The
Seller shall be liable for all transfer costs, transfer duty, stamp
duty, . . . and transfer of the property into the name of
the
Purchaser by the conveyancers of the Seller, and the conveyancing
shall only commence after such costs have been paid by the
Seller.’
It
is necessary to record that the purchase price was, in terms of the
agreements of sale concerned, to be set off against the sum
of R2 160
000 allegedly owed to G & I Plumbers CC by the respondents.
[5]
The Trust alleged that on 4 July 2012 and in breach of the
agreements, the respondents purported to cancel the agreements, which
cancellation the Trust did not accept. The respondents resisted the
claims. They raised a special plea of prescription asserting
that the
claim of the appellants had arisen on 25 February 2010 (when the
agreements were concluded) and that the appellants’
summons was
served on them on 7 March 2013, more than three years after the date
on which the claims arose. The respondents also
relied on additional
defences which are not material for present purposes.
[7]
At the trial, the parties agreed, pursuant to rule 33(4) of the
Uniform Rules of Court, that the special plea of prescription
be
adjudicated prior to and separately from the remaining issues. The
court of first instance (Chwaro AJ), after hearing the parties,
dismissed the special plea of prescription with costs. It
subsequently granted the respondents leave to appeal to the full
court.
[8]
On appeal to the full court, however, the order of the court of first
instance was reversed, and the special plea of prescription
was
upheld with costs. This appeal is against that order, special leave
to appeal having been granted by this court.
[9]
In the court of first instance, the learned judge accepted that it
was trite that prescription commences to run as soon as the
debt
becomes due, meaning that from the date it becomes immediately
claimable by the creditor and immediately payable by the debtor.
He
also accepted, with reference to
Desai
NO v Desai NNO & others
[1995]
ZASCA 113
;
1996 (1) SA 141
(SCA) at 146 I-147A, that the respondents’
obligation to transfer the properties to the Trust was a debt as
contemplated
in
s 10
of the
Prescription Act. He
nonetheless
concluded that as the appellants’ action was precipitated by
the respondents’ purported cancellation of
the sale agreements
on 4 July 2012 – when the three year period from 25 February
2010 had not yet elapsed – the running
of prescription was
thereby interrupted.
[10]
In the course of considering whether the respondents’
obligation had become due, the court below said the following (para
16):
‘
For
prescription to commence running there has to be a debt immediately
claimable by the creditor or stated in another way, there
has to be a
debt in respect of which the debtor is under an obligation to perform
immediately.’ (Citations omitted.)
[11]
It then continued in para 20:
‘
The
payment of transfer costs, transfer and stamp duty, deed of sale and
transfer of the property are reciprocal obligations which
. . . do
not delay the running of prescription. As there was no fixed time
provided in the agreement when transfer was to be effected,
the
respondents could have within 3 years from the date the agreement was
concluded brought an action to claim specific performance
for
transfer of the property and they could have simultaneously claimed
payment of the transfer and duty costs. The respondents
acquired a
complete cause of action on the date the written agreement was
concluded in that they had all the facts necessary to
succeed with
their claim and the appellants were obliged to perform immediately.’
[12]
Consequently, it concluded that the ‘debt arose and became due
upon conclusion of the written agreements of sale on 25
February 2010
and accordingly prescribed on 24 February 2013’.
[13]
In this court the appellants contended that the obligation undertaken
by the respondents to pay the transfer and related costs
did not
constitute a debt owing to the appellants. In the alternative, the
appellants asserted that having regard to clause 7.1
of the
agreements there was no obligation on the respondents to perform
immediately and that they had an election to perform within
a
reasonable time. In the further alternative, the appellants contended
that prescription would have only commenced to run when
the transfer
and incidental costs were paid by the respondents. In sum, the
appellants submitted that their claim had not prescribed
when summons
enforcing the agreements was served on the respondents on 7 March
2013.
[14]
On their part, the respondents argued that the appellants had full
knowledge of the facts from which their claim arose on 25
February
2010. Thus, they contended, prescription commenced to run from that
date when they could and should have instituted action
for the
transfer of the properties and incidental relief.
[15]
The relevant statutory provisions in this case are
ss 10(1)
,
11
and
12
(1) of the
Prescription Act. Section
10 of the
Prescription Act is
headed ‘Extinction of debts by prescription’ and the
relevant parts of
s 10(1)
read:
‘
.
. . a debt shall be extinguished by prescription after the lapse of
the period which in terms of the relevant law applies in respect
of
prescription of such debt.’
Section
11
, in turn, is entitled ‘Periods of prescription of debts’
which, to the extent relevant for the present purposes, provides:
‘
The
period of prescription of debts shall be the following:
(a)
. . .
(b)
. . .
(c)
. . .
(d)
save where an Act of Parliament provides otherwise, three years in
respect of any other debt.’
Section
12 is headed ‘When prescription begins to run’ and the
relevant parts of s 12(1) provide:
‘
.
. .prescription shall commence to run as soon as the debt is due.’
[16]
It is apposite at this stage to make some preliminary observations.
One of the philosophical justifications for prescription
is that
‘society is intolerant of stale claims’. Thus, a creditor
is required to be vigilant in enforcing his or her
rights. If he or
she fails to enforce them timeously, he or she may not enforce them
at all. (See in this regard:
Cape Town
Municipality v Allie NO
1981 (2) SA 1
(C) at 5G-H;
Murray & Roberts
Construction (Cape) (Pty) Ltd v Upington Municipality
1984
(1) SA 571
(A) at 578F-H.) In
Duet and
Magnum Financial Services CC (In liquidation) v Koster
[2010] ZASCA 34
;
2010 (4) SA 499
(SCA), para 9, Nugent JA said that
prescription ‘is about rights that have come into existence but
have ceased to exist by
the passage of time’.
[17]
In
Road Accident Fund & another v Mdeyide
[2010] ZACC 18
;
2011 (2) SA 26
(CC) Van der Westhuizen J explained it thus (para 2):
‘
In
the interests of social certainty and the quality of adjudication, it
is important, though, that legal disputes be finalised
timeously. The
realities of time and human fallibility require that disputes be
brought before a court as soon as reasonably possible.
Claims thus
lapse, or prescribe, after a certain period of time. If a claim is
not instituted within a fixed time, a litigant may
be barred from
having a dispute decided by a court. This has been recognised in our
legal system – and, others – for
centuries.’
[18]
Previously, in
Mohlomi v Minister of Defence
[1996] ZACC 20
;
1997 (1) SA 124
(CC), Didcott J, writing for a unanimous court,
explained the rationale for extinctive prescription in these terms
(para 11):
‘
Rules
that limit the time during which litigation may be launched are
common in our legal system as well as many others. Inordinate
delays
in litigation damage the interests of justice. They protract the
disputes over the rights and obligations sought to be enforced,
prolonging the uncertainty of all concerned about their affairs. Nor
in the end is it always possible to adjudicate satisfactorily
on
cases that have gone stale. By then witnesses may no longer be
available to testify. The memories of ones whose testimony can
still
be obtained may have faded and become unreliable. Documentary
evidence may have disappeared. Such rules prevent procrastination
and
those harmful consequences of it. They thus serve a purpose to which
no exception in principle can cogently be taken.’
[19]
The word ‘debt’ is not defined in the
Prescription Act.
But
it is now trite that the word ‘debt’ in
s 12(1)
of
the
Prescription Act is
a wide concept which does not equate to a
‘cause of action’. Rather, it includes the broader
concept of a ‘right
of action’. In
Drennan Maud &
Partners v Town Board of the Township Pennington
[1998] ZASCA 29
;
1998 (3) SA 200
(SCA) Harms JA put it thus (212F-J):
‘
[I]n
short, the word “debt” does not refer to the “cause
of action”, but more generally to the claim.
.
. .
In
deciding whether a ‘debt’ has become prescribed, one has
to identify the “debt”, or, put differently,
what the
“claim” was in the broad sense of the meaning of that
word.’
[20]
In
Barnett & others v Minister of
Land Affairs & others
[2007] ZASCA
95
;
2007 (6) SA 313
(SCA), para 19, the term ‘debt’ was
given a broad meaning to refer to an obligation to do something, such
as payment
or delivery of goods or to abstain from doing something.
[21]
However, the Constitutional Court has expressed reservations in
its recent decisions, notably,
Makate
v Vodacom (Pty) Ltd
[2016] ZACC 13
;
2016 (4) SA 121
(CC) para 87-93, in relation to the precise ambit of
the word ‘debt’ implying that it should be interpreted
narrowly.
Fortunately though, on the facts of this case, it is not
necessary to enter into that debate which must be left for another
day
when pertinently raised and this court has enjoyed the benefit of
full argument on this score for, in the context of the facts of
this
case, even in adopting a narrow meaning of the word ‘debt’,
the obligations undertaken by the respondents in terms
of clause 7.1
constitute a debt. (See also:
Off-Beat
Holiday Club & another v Sanbonani Holiday Spar Shareblock
Limited & others
[2017] ZACC 15
,
paras 46-53.)
[22]
Similarly, the phrase ‘debt is due’ is not defined in the
Prescription Act. But
it is now well settled that the term must be
given its ordinary meaning, that is, that a debt owing and already
payable or immediately
claimable or immediately exigible at the
election of the creditor. (See:
Electricity
Supply Commission v Stewarts & Lloyds SA (Pty) Ltd
1979
(4) SA 905
(W) at 908E;
Deloitte Haskins
& Sells Consultants (Pty) Ltd v Bowthorpe Hellerman Deutsch (Pty)
Ltd
[1990] ZASCA 136
;
1991 (1) SA 525
(A) at 532H.) Put differently, there must be a debt in respect of
which the debtor is under an obligation to perform immediately.
[23]
In
List v Jungers
1979 (3) SA 106
(A) at 121C-D this court stated that there is a
difference between when a debt comes into existence on the one hand
and when it
becomes recoverable on the other hand, although these
dates may coincide.
[24]
As to when ‘a debt is due’ this court, in
Truter &
another v Deysel
[2006] ZASCA 16
;
2006 (4) SA 168
(SCA) said the
following (para 15):
‘
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 succeed with his or
her claim against the debtor is in place or, in other
words, when
everything has happened which would entitle the creditor to institute
action and to pursue his or her claim.’
[Citations omitted.]
(See
further in this regard:
I L Back
above at 990D-E;
Evins v Shields
Insurance Co Ltd
1980 (2) SA 814
(A) at
838D-H; and
Standard Bank of South
Africa Ltd v Miracle Mile Investments 67 (Pty) Ltd & another
[2016] ZASCA 91
;
2017 (1) SA 185
(SCA)
para 24.)
[25]
More than a decade ago in
Minister of Finance & others v Gore
NO
[2006] ZASCA 98
;
2007 (1) SA 111
(SCA) the following was
stated (at 119J-120A):
‘
This
court has, in a series of decisions, emphasised that time begins to
run against the creditor when it has the minimum facts
that are
necessary to institute action. The running of prescription is not
postponed until a creditor becomes aware of the full
extent of its
legal rights, nor until the creditor has evidence that would enable
it to prove a case “comfortably”.’
And
as Farlam JA succinctly put it in
Unilever Bestfoods Robertsons
(Pty) Ltd v Soomai
& another
[2006] ZASCA 144
;
2007
(2) SA 347
(SCA) at 359F-H:
‘
What
prescribes in terms of the
Prescription Act
. . . is a “debt”,
that is to say, not a “cause of action”, but a “claim”.’
[26]
Against the foregoing backdrop, I revert to a consideration of what
lies at the heart of this appeal, namely whether the debt
–
meaning the obligation of the respondents to pay transfer and related
costs and thereafter pass transfer of the properties
in question to
the Trust, constitutes a debt and, if so, when such debt fell due. In
this regard, the respondent asserted that
the obligations undertaken
by them in terms of the various agreements each constituted a debt as
contemplated in
s 10(1)
of the
Prescription Act. The
court of first
instance found that these obligations were debts and thus susceptible
to prescription. But it nevertheless held
that prescription only
commenced to run from the date of repudiation of the agreements by
the respondents on 4 July 2012. Consequently,
it concluded that the
debts had not prescribed. As to repudiation, it suffices merely to
record that at the hearing of the appeal,
counsel for the appellants
expressly disavowed any reliance on the respondents’ purported
repudiation of the agreements,
which the appellant had in any event
not accepted. Thus, nothing more need be said in relation to this
aspect. With respect to
the appellants’ alternative claim for
damages, we were informed by counsel at the hearing of the appeal
that it too would
not be persisted in.
[27]
As will be demonstrated below, the obligation of the respondents to
pay transfer costs and other related costs in terms of
the sale
agreements, constitutes a debt as contemplated in
s 10(1)
of the
Prescription Act. There
is no dispute that, as a general principle,
prescription commences to run as soon as the debt is due as
contemplated in
s 12(1).
[28]
The argument advanced on behalf of the appellants was three-pronged.
First, it was contended that the obligation to pay transfer
costs
undertaken by the respondents does not constitute a debt as
contemplated in
s 10(1)
of the
Prescription Act. Second
, it was
contended that to the extent that such an obligation is held to
constitute a debt, the wording of clause 7.1 of the sale
agreements
does not contemplate immediate performance by the respondents. And,
consequently, the running of prescription did not
commence upon the
conclusion of the agreements in question that only once the costs of
transfer have been paid by the seller to
its conveyancer. Third, that
taking cognisance of the fact that the dates on which a debt arises
and when it becomes claimable
do not always coincide; the debt in
this instance would therefore have become due from the date on which
the transfer costs were
paid. And as the respondents had still not
paid such costs by the time the appellants’ summons was served
on them, the running
of prescription had not yet commenced when the
appellants’ action was instituted.
[29]
Before I deal with these contentions, it is necessary to make one
further observation. In large measure, the fate of this appeal
hinges
on the interpretation of the
Prescription Act and
clause 7.1, in
accordance with the well-established canons of interpretation of
documents. The interpretation process entails that
the document in
issue must be interpreted in the light of the language used. The
context in which the relevant provisions appear,
their apparent
purpose and the material known to those responsible for their
production are also relevant considerations. (See
in this regard
Natal Joint Municipal Pension Fund v
Endumeni Municipality
[2012] ZASCA 13
;
2012 (4) SA 593
(SCA) para 18.)
[30]
Accordingly, as endorsed in a long line of cases, the logical point
of departure is the language of the relevant provisions
themselves
read in the context of the overall scheme of the Act, having regard
to the purpose of the provision and against the
background to the
production of the document. (See in this regard:
South
African Airways (Pty) Ltd v Aviation Union of South Africa &
others
[2011] ZASCA 1
;
2011 (3) SA 148
(SCA) paras 25-30;
Bothma-Batho
Transport (Edms) Bpk v S Bothma & Seun Transport (Edms) Bpk
[2013] ZASCA 176
;
2014 (2) SA 494
(SCA)
paras 10-12;
Novartis SA v Maphil
Trading
[2015] ZASCA 111
;
2016 (1) SA
518
(SA) paras 24-31.)
[31]
An obligation to do something undertaken in terms of a contract, when
the contract is silent as to the time of performance,
is a debt which
becomes immediately claimable or exigible at the instance of the
creditor. Thus prescription commences to run from
the date on which
the contract was concluded. In
Munnikhuis v Melamed NO
1998
(3) SA 873
(W) the court said the following (at 887E-F):
‘
.
. . A right to claim performance under a contract ordinarily becomes
due according to its terms or, if nothing is said, within
a
reasonable time, which in appropriate circumstances, can be
immediately . . .’
[32]
In
Standard Bank of South Africa Ltd v Oneanate Investments (Pty)
Ltd
1995 (4) 510 (C) the following was stated at 546I-547B:
‘
The
next question which must be addressed is when separate debts in an
overdrawn current account are due and payable. An overdraft
is a
series of loans. A loan without agreement as to time for repayment is
at common law repayable on demand. Although by no means
linguistically clear, the phrase “payable on demand” is
used in this context in our law to mean that no specific demand
for
repayment is necessary and the debt is repayable as soon as it is
incurred. When suing for repayment there is no need to allege
a
demand and such a demand is not part of the plaintiff’s cause
of action.’ [Citations omitted.]
[33]
The passage in
Standard Bank Ltd
quoted in the preceding paragraph was cited with approval by the
Constitutional Court in
Trinity Asset
Management (Pty) Ltd v Grindstone Investments 132 (Pty) Ltd
[2017]
ZACC 32
para 42. The Constitutional Court stated in para 105, that
prescription in respect of loans payable on demand begins to run when
the debt arises unless there is clear indication to the contrary.
[34]
Professor M M Loubser in his book titled
Extinctive Prescription
(1996) at 53, inter alia, points out that where a contract is silent
as to the time of performance, the debt is generally due immediately
upon conclusion of the contract. Similarly, J Saner SC in
Prescription in South African Law
, Issue 23 (2016) says the
following (at 3.65):
‘
It
is arguable that a contract allowing a creditor to determine, of his
own accord, when performance is to be made is in effect
silent as to
the time of performance. Performance is therefore due immediately on
conclusion of the contract, when prescription
begins to run. Taking
the argument further, the stipulation that performance is due on
demand merely reinforces the implicit term
of the contract that
performance is due from the conclusion of the contract.’
[35]
According to clause 7.1 of the relevant agreements, the seller, ie
Adlu Projects CC, is, amongst other things, liable for the
payment of
transfer and related costs to conveyancers appointed by it. And that
only upon payment of such costs, would transfer
of ownership of the
properties in question be effected by its conveyancers. Clause 7.1
nowhere stipulates the time as to when such
payment should be made.
All it does is to impose an obligation on the respondents as the
seller to pay these costs.
When prompted by
a question posed to him by a member of the Bench, counsel for the
appellants sought to argue that the language
of clause 7.1 manifests
an intention on the part of the contracting parties to the effect
that the transfer of the properties into
the name of the Trust would
only occur after the seller had paid the transfer costs. Put
differently, the transfer of the properties
was subject to a
suspensive condition, namely the payment of transfer costs. Thus for
as long as the transfer costs remained unpaid
the running of
prescription in relation to the transfer of the properties did not
commence to run. However, counsel had difficulty
in articulating this
proposition. Ultimately he was constrained to disavow any reliance on
the notion that the transfer of the
relevant properties was subject
to a suspensive condition. Accordingly, nothing more need be said on
this score.
[36]
Accordingly, the question arises as to whether this obligation
constitutes a debt as contemplated in
s 10(1)
of the
Prescription
Act. To
escape the consequences of extinctive prescription, counsel
for the appellants argued that this obligation does not constitute a
debt. He further contended that even if it were to be regarded as a
debt, it was a debt owed not to the Trust but to the conveyancers
who
were to transfer the properties to the Trust. This argument cannot be
sustained. First, in
Makate
the Constitutional Court, in the
course of reviewing decisions of our courts as to what constitutes a
debt, adopted the dictionary
meaning ascribed to the word ‘debt’
in the
Shorter Oxford English Dictionary
5ed (1993) and
concluded in paras 85-86 that a debt is:
‘
1
something owed or due: something (as money, goods or services) which
one person is under an obligation to pay or render to another.
2
A liability or obligation to pay or render something; the condition
of being obligated.’
Second,
it cannot be an answer to say that the obligation to pay transfer
costs is owed to the conveyancers simply because payment
must, in
terms of clause 7.1, be effected to them as the appellants sought to
argue. The obvious answer is that all of the obligations
undertaken
by the respondents in terms of the agreements in question were owed
to the Trust as the contracting party and only the
Trust was entitled
to enforce those obligations.
[37]
It therefore follows that the Trust had every right, had it elected
to do so, to demand that the respondents do what was required
of them
in terms of clause 7.1 immediately upon the conclusion of the
agreements of sale. When he was confronted with a question
from a
member of the bench as to what precluded the Trust from demanding
payment immediately upon conclusion of the agreements,
the only
answer – which is far from convincing – that counsel for
the appellants could proffer was that the Trust would
have been met
with a defence that the respondents could do nothing until the
transfer costs were determined by conveyancers. This
is hardly
surprising for it was certainly open to the Trust to do so once its
rights flowing from the agreements came into existence
on 25 February
2010. Indeed that is the very step that the appellants took, albeit
outside the three year prescriptive period,
when they ultimately
instituted legal proceedings against the respondents in March 2013.
[38]
As to the alternative contention advanced by the appellants, counsel,
relying solely on the wording of clause 7.1 of the agreements,
argued
that as between the parties there was no expectation that the
respondents would render performance, ie pay the transfer
costs
immediately. Rather, the parties contemplated that payment of these
costs would be effected within a reasonable time. As
to what
constituted a reasonable period, counsel submitted, without any
factual basis, that it was a period of three months.
[39]
I fail to see how this argument can avail the appellants for
essentially two reasons. First, a period of more than three years
elapsed before the appellants enforced their contractual rights.
Second, it does not follow that because the Trust believed that
the
respondents supposedly had three months from the conclusion of the
agreement within which to pay the transfer costs, prescription
did
not commence to run from the date of the conclusion of the agreement.
In
Baker v Probert
1985 (3) SA 429
(A), a case where the agreement of sale was cancelled
after the purchaser had already paid the purchase price, this court
said at 438J-439C and 446C, that the purchaser was entitled to claim
repayment of the purchase price from the seller immediately
upon the
valid cancellation of the sale agreement. It further stated that
prescription commenced to run from the date of cancellation.
By
parity of reasoning, where the seller was obliged to cause transfer
to be effected in terms of the agreement, as is the position
here,
but failed to do so within a reasonable time, the Trust became
entitled to enforce the agreement immediately. Put differently,
the
Trust acquired a right of action against the respondents who were, in
turn, obliged to perform immediately upon the conclusion
of the
relevant agreements.
[40]
The appellants’ final argument was that the law draws a
distinction between the date on which a debt arises and the date
on
which it falls due. And that prescription commences to run not from
the date on which a debt arose but from the date on which
it became
due. Relying upon this distinction, the appellants further contended
that in the present case the due date would have
been when the
transfer costs were paid by the respondent. In elaboration, counsel
put some store on the concluding words ‘the
conveyancing
process shall only commence after [transfer] costs have been paid by
the seller’ in clause 7.1 of the agreements.
In my view, this
argument is untenable. It flies in the face of the settled principle
endorsed by the Constitutional Court and
this court in the decisions
referred to in paras 16-18 above. What it means is that for as long
as the transfer costs remained
unpaid – regardless of how long
that might take – transfer of the properties would be held in
abeyance. And that the
appellants could remain supine indefinitely
without running any risk of prescription intervening.
[41]
To my mind, upholding the appellants’ argument would have the
effect that the running of prescription would only commence
from the
time of the Trust’s choosing. In
The Master v I L Back
& Co Ltd & others
1983 (1) SA 986
(A) at 1004A-1005H,
this court held that a creditor cannot by its own conduct –
namely action or inaction – postpone
the commencement of
prescription. Professor Loubser in
Extinctive Prescription
above explains the rationale for this principle as follows at 63:
‘
On
account of the policy consideration that a creditor should not be
able to rely on his own failure to demand performance from
the debtor
in order to delay the running of prescription the courts will require
a clear indication that the parties intended demand
to be a condition
precedent for the debt to become due, in which case prescription will
only begin to run from the date of demand.’
[42]
In conclude, therefore, that for all the aforegoing reasons this
appeal cannot succeed. In the result the following order is
made:
The
appeal is dismissed with costs.
_________________
X
M Petse
Judge
of Appeal
Ponnan
JA (concurrence):
[43]
I have had the benefit of reading the judgment of Petse JA. Whilst I
agree with my learned colleague’s conclusion, I
believe that it
may conduce to clarity for me to state separately my reasons for
concurring with him that the appeal must fail
with costs.
[44]
Stripped of unnecessary surplusage, the facts, which fall within a
narrow compass, are: On 4 March 2013 the appellants caused
summons to
be issued seeking, in effect, an order compelling the respondents to
cause transfer of certain properties to be effected
into the names of
the first two appellants. The appellants relied on three identically
worded written agreements concluded between
the parties on 25
February 2010. The summons was served on the respondents, three days
after its issue, on 7 March 2013. The summons
was met with a special
plea in these terms:
‘
2.
The Plaintiffs action is based upon sale agreements which were
concluded on 25 February
2010. On the said date the Plaintiffs
alleged claim fell due.
2.2
The Plaintiffs Summons in this action was served on the Defendants
more than three years
after the date upon which the claims arose.
2.3
In the premises the Plaintiffs claim has prescribed in terms of the
provisions of Act 68
of 1969.’
[45]
As it was put in
Umgeni
Water & Others v Mshengu
:
[1]
‘
Section
10 of the Prescription Act, No 68 of 1969 (the Act), provides for the
extinction of a debt after the lapse of periods determined
in s 11.
The period of prescription applicable to the plaintiff’s claim
is that provided for in s 11(d) of the Act, namely
3 years. According
to s 12(1) of the Act,
prescription
shall commence to run “as soon as the debt is due”. The
words “debt is due” must be given their ordinary
meaning. In its ordinary meaning a debt is due when it is
immediately claimable by the creditor and, as its correlative, it
is
immediately payable by the debtor. Stated another way, the debt must
be one in respect of which the debtor is under an obligation
to pay
immediately.
A
debt can only be said to be claimable immediately if a creditor has
the right to institute an action for its recovery. In order
to be
able to institute an action for the recovery of a debt a creditor
must have a complete cause of action in respect of it.
The expression
“cause of action” has been held to mean: “every
fact which it would be necessary for the plaintiff
to prove . . .
in order to support his right to judgment of the Court. It does not
comprise every piece of evidence which
is necessary to prove each
fact, but every fact which is necessary to be proved”; or
slightly differently stated “the
entire set of facts which give
rise to an enforceable claim and includes every fact which is
material to be proved to entitle a
plaintiff to succeed in his claim.
It includes all that a plaintiff must set out in his declaration in
order to disclose a cause
of action. Such cause of action does not
‘arise’ or ‘accrue’ until the occurrence of
the last of such facts
and consequently the last of such facts is
sometimes loosely spoken of as the cause of action.” A
plaintiff must thus have
a complete cause of action at the stage when
summons is issued or at any rate when the summons is served.
’
[46]
For the reasons that follow, I am of the view that the appellants’
right to claim transfer was indeed extinguished by
prescription. The
right to claim registration of transfer is a debt as envisaged in s
10(1) of the Act.
[2]
The obligation of the respondents, in terms of each agreement, was to
pass transfer. The right to claim performance in terms of
an
agreement ordinarily becomes due according to its terms or, if
nothing is said, within a reasonable time.
[3]
As it was put in
Munnikhuis
v Melamed
at
888A-B:
[4]
‘
If
a debtor fails or refuses to perform some time after the debt becomes
due, the failure or refusal does not give rise to
a fresh or
different debt unless the creditor then cancels the agreement. If the
creditor does not, it remains entitled to sue
for performance. The
breach of contract does not, however, create a new cause of action
for specific performance. It may well create
a new cause of action
for cancellation, and even for damages (see the discussion in
Van
der Merwe et al (op cit
at 240--2)). The authors make a related point in a different
context in regard to a claim for performance against a party
which
has committed a breach of contract . . .:
“
A
claim for specific performance in terms of a contract, though
instituted upon breach, is based on the contents of the contract
and
not on the breach as such.” (At 238.)’
[47]
The breach in this case took the form of a failure on the part of the
respondents to transfer the properties. The appellants
have here
claimed performance of the very obligation due under each agreement.
The breach by the respondents on account of their
failure to
timeously perform their obligation to pass transfer did not create a
new debt. The original obligation remained intact.
On the conclusion
of the agreements on 25 February 2010, there was a debt in respect of
which the respondents were under a duty
to perform immediately.
[5]
The appellants could thus immediately claim transfer.
[48]
It follows that when the appellants eventually caused summons to be
served on the respondents on 7 March 2013 the debt had
already been
extinguished by prescription.
_________________
V
M Ponnan
Judge
of Appeal
APPEARANCES
For
Appellants:
S Aucamp
Instructed by:
Van Velden-Duffey
Inc, Rustenburg
Horn & Van
Rensburg, Bloemfontein
For
Respondents:
P A Swanepoel
Instructed
by:
Du Plessis van der
Westhuizen Inc, Rustenburg
Phatshoane Henney
Attorneys, Bloemfontein
[1]
Umgeni
Water & Others v Mshengu
[2009]
ZASCA 148
;
[2010] 2 All SA 505
(SCA) paras 5 and 6.
[2]
Desai No
v Desai NNO & Others
[1995]
ZASCA 113
;
1996
(1) SA 141
(A) at 146J-147A.
[3]
Hanuscke
Beleggings CC v Kungwini Local Municipality
[2012]
ZASCA 112
para 13.
[4]
Munnikhuis
v Melamed
1998
(3) SA 873
(W) at 888A-B.
[5]
Deloitte
Haskins & Sells Consultants (Pty) Ltd
v
Bowthorpe Hellerman Deutsch (Pty) Ltd
[1990]
ZASCA 136
;
1991 (1) SA 525
(A) at 532H.