Brief Summary

Prescription — Claim for repayment of overcharged electricity — Plaintiff sought a declaratory order that its claim for overcharging from 2007 to 2017 had not prescribed — Defendant contended that the claim had prescribed as the plaintiff was aware of the overbilling by August 2020 — Court held that the plaintiff’s particulars of claim disclosed sufficient material facts to support its claim and that the issue of prescription was not determinative at this stage, allowing the matter to proceed.

Comprehensive Summary

Summary of Judgment

Introduction

This judgment concerns exception proceedings brought in the Western Cape Division of the High Court, Cape Town. The defendant (as excipient) excepted to the plaintiffs’ amended particulars of claim on the basis that they allegedly failed to disclose a cause of action, principally because the pleaded claim was said to be prescribed.

The parties were Big Concerts International (Pty) Ltd (first respondent/plaintiff) and Justin van Wyk (second respondent/plaintiff at the time the action was instituted), against the Trustees of the Winkler Family Trust (excipient/defendant). The judgment notes that the action was initially instituted by two plaintiffs, but that this position changed later, and that some grounds of exception became irrelevant due to amendments.

Summons was issued on 4 May 2023. An amended particulars of claim was filed on or about 3 July 2023, and the defendant delivered an exception on 14 June 2023. The defendant later delivered an amended exception on 24 October 2023. The matter was heard on 14 November 2023 and judgment was delivered electronically on 29 November 2023.

The general subject matter underlying the dispute was a tenant’s allegation of overcharging for electricity under a series of lease agreements, and the associated dispute about prescription. The plaintiff sought declaratory relief that its claim relating to alleged overcharging for the period 2007 to 2017 had not prescribed, and ancillary relief linked to the leases’ dispute-resolution mechanism involving the landlord’s auditors.

Material Facts

The court treated as material the pleaded contractual relationship and the pleaded timeline relevant to prescription. On the pleadings, the first plaintiff concluded various lease agreements with the defendant trust in terms of which it leased premises described as the 6th Floor, Earlgo Building, for a period spanning 2007 until 2020.

The pleaded express terms included that the tenant would pay for electricity and gas consumed on the premises, and that if any dispute arose in that regard, the decision of the landlord’s auditors (acting as experts and not arbitrators) would be final and binding on the parties.

It was pleaded that during 2007 to 2020 the defendant’s agent furnished the plaintiff with monthly invoices including a charge for electricity allegedly consumed at or on the premises, and that the plaintiff paid these invoices bona fide and reasonably believing it was only being charged for its own electricity consumption.

The plaintiff pleaded that during August 2020 it became aware that it had also been charged for electricity consumed by Vodacom’s telecommunication towers and for electricity used for lighting the building’s emergency stairwell. It pleaded that the payments relating to those items for the period 2007 to 2020 were not owing and were nevertheless appropriated by the trust.

It was pleaded that the trust repaid R 287 500.00 in respect of the alleged overpayment for the period 1 January 2018 to 31 December 2020, but refused to repay amounts allegedly overpaid for the period 2007 to 31 December 2017.

On prescription, the plaintiff pleaded that the trust alleged the claim had prescribed because the plaintiff allegedly knew or ought reasonably to have known of the overbilling earlier, and the plaintiff pleaded in response that it only became aware of the overbilling during August 2020 and that the overbilling would not have been ascertained by a reasonable person prior to that date.

In the exception proceedings, it was treated as common cause that certain grounds of exception had been overtaken by the subsequent amendment of the particulars of claim, including the ground relating to the second plaintiff and the ground relating to non-joinder of the auditors.

Legal Issues

The central legal questions were confined to exception-stage pleading issues. The court was required to determine whether the particulars of claim, read as a whole and on any reasonable interpretation, were excipiable for lacking averments necessary to sustain the relief sought in prayer (a), namely an order declaring that the plaintiff’s claim for overcharging of electricity for the period 2007 to 2017 had not prescribed.

Stated differently, the court had to decide whether the plaintiff had pleaded a sufficient basis for the declaratory order relating to prescription, and whether the particulars of claim were self-contradictory or otherwise disclosed a claim that was clearly prescribed ex facie the pleadings.

The dispute was primarily one of application of law to pleaded facts, within the strict constraints of exception procedure. The court was not called upon to decide the merits of prescription in fact, but only whether the pleadings were legally defective such that no cause of action could arise on any reasonable reading.

Court’s Reasoning

The court first set out the applicable pleading standard under Uniform Rule 18(4), emphasising that pleadings must contain a clear and concise statement of material facts, with sufficient particularity to enable the opposing party to reply. It relied on the general function of pleadings as giving fair notice and defining the issues, and it endorsed the distinction drawn in authority between pleading facts and pleading mere conclusions.

In explaining what makes a pleading excipiable, the court referred to Uniform Rule 23 and reiterated that not every imperfection is excipiable. It adopted the approach that an exception is appropriate where pleadings are so vague that the claim cannot be determined, or where pleadings are bad in law and fail to support a legally recognised cause of action. The court emphasised that the excipient bears the burden of showing that the pleading is excipiable on every reasonable interpretation.

On prescription, the court summarised the trite principles under the Prescription Act 68 of 1969, including that prescription generally runs from when the debt is due (section 12(1)), and that a debt is not deemed due until the creditor has knowledge of the identity of the debtor and the facts from which the debt arises, subject to the reasonable-care proviso (section 12(3)). The court also noted the principle that the party raising prescription bears the onus to establish the date prescription began running and the creditor’s requisite knowledge, and it quoted authority explaining that a debt becomes due when the creditor has a complete cause of action.

Having narrowed the scope of the exception, the court held that the only remaining ground of exception was directed at prayer (a) and prescription. It rejected other grounds as either overtaken by amendments or as not properly founding an exception as pleaded in this matter, including the enrichment-related ground and the “ambit of relief” ground. In this regard, the court considered that the claim was framed as one for a declaratory order and ancillary relief, and it regarded such relief as competent in principle, referencing authority recognising declaratory relief.

Turning to the pleaded basis for the declarator, the court reasoned that because the plaintiff sought an order declaring that its claim had not prescribed, it had to plead a basis for that contention. The court found that the particulars of claim did provide that basis by alleging that the plaintiff only became aware of the overbilling in August 2020, and that it would not have been ascertainable by a reasonable person before then. The court treated these allegations as the pleaded foundation for invoking section 12(3) of the Prescription Act and resisting an assertion that the claim had become due earlier by imputed knowledge.

The court further reasoned that, on the plaintiff’s pleaded version, summons was issued within three years of August 2020. Accordingly, to the extent that the court ultimately trying the matter might find that the Prescription Act applied, the pleaded facts did not render the declaratory relief ex facie time-barred at the exception stage.

The court made clear that questions such as whether the Prescription Act in fact applied, whether the claim had in fact prescribed, and who bore the onus in the final determination were not issues for decision at this interlocutory stage. On that basis, the court concluded that the particulars of claim disclosed a cause of action sufficient to sustain prayer (a), and that the exception could not succeed.

Outcome and Relief

The court dismissed the grounds of exception relating to prayer (a), holding that the particulars of claim disclosed a cause of action for the declaratory relief concerning prescription on the pleaded facts.

As to costs, the court separated the costs consequences between different aspects of the exception. It held that the grounds of exception relating to prayer (b) had been overtaken by the amendment of the particulars of claim on 24 October 2023, and it ordered that the plaintiff (Big Concerts International (Pty) Ltd) pay the defendant’s costs relating to the exception to prayer (b) up to 24 October 2023.

For the remaining issue (the exception relating to prayer (a)), the court ordered the defendant/excipient to pay the costs of that part of the exception, applying the ordinary principle that costs follow the cause in respect of the unsuccessful exception.

Cases Cited

Investec Bank Ltd v Erf 436 Elandspoort (Pty) Ltd and Others 2021 (1) SA 28 (SCA).

Buchner and Another v Johannesburg Consolidated Investment Co Ltd 1995 (1) SA 215 (T).

Tembani and Others v President of The Republic of South Africa and Another 2023 (1) SA 432 (SCA).

Zurich Insurance Co South Africa Ltd v Gauteng Provincial Government 2023 (1) SA 447 (SCA).

Gericke v Sack 1978 (1) SA 821 (A).

Links v Department of Health, Northern Province 2016 (4) SA 414 (CC) (2016 (5) BCLR 656; [2016] ZACC 10).

Truter and Another v Deysel [2006] ZASCA 16; 2006 (4) SA 168 (SCA).

Shoprite Checkers (Pty) Ltd v Mafate 2023 (4) SA 537 (SCA).

Legislation Cited

Prescription Act 68 of 1969.

Rules of Court Cited

Uniform Rule 18(4).

Uniform Rule 23.

Held

The court held that, on the pleaded facts, the particulars of claim disclosed a cause of action supporting the plaintiff’s request for a declaratory order that its claim had not prescribed. The pleaded allegation that the plaintiff became aware of the overbilling in August 2020, together with the fact that summons was issued within three years of that date, meant that the claim was not shown to be prescribed ex facie the particulars of claim for purposes of exception.

The court held that issues concerning whether the Prescription Act ultimately applied, whether prescription had in fact run, and related questions of onus were not determinable at exception stage on the narrowed ground before it.

The court dismissed the exception relating to prayer (a), ordered the excipient to pay the costs of that aspect, and ordered the plaintiff to pay the defendant’s costs relating to the exception to prayer (b) up to the date when the particulars were amended, namely 24 October 2023.

LEGAL PRINCIPLES

A pleading must set out a clear and concise statement of material facts with sufficient particularity to enable the opposing party to plead, as required by Uniform Rule 18(4). A pleading that merely states conclusions without the material factual foundation may be defective, because courts decide cases by applying law to established facts rather than endorsing a litigant’s conclusions.

An exception under Uniform Rule 23 is not a mechanism to resolve factual disputes or determine the ultimate merits. It is properly directed at pleadings that are so vague that the nature of the claim cannot be determined, or that are bad in law because they do not support a discernible and legally recognised cause of action. The excipient bears the burden of showing that the pleading is excipiable on every reasonable interpretation.

For prescription, section 12(1) of the Prescription Act 68 of 1969 provides that prescription generally begins when the debt is due. Under section 12(3), a debt is not deemed due until the creditor has knowledge of the identity of the debtor and of the facts giving rise to the debt, subject to the proviso that the creditor is deemed to have such knowledge if it could have been acquired by exercising reasonable care. The pleaded date of knowledge may therefore be material to whether prescription is apparent on the face of the pleadings.

At the exception stage, where a plaintiff pleads a factual basis for contending that prescription did not begin running earlier (including alleged late knowledge and an allegation that earlier discovery was not reasonably possible), and the summons is pleaded to have been issued within three years of that alleged knowledge, a court may find that the claim is not demonstrably prescribed ex facie the pleadings, leaving the ultimate determination of prescription to trial or later proceedings.

Big Concerts International (Pty) Ltd and Another v Trustees of the Wrinkler Family Trust (7036/2023) [2023] ZAWCHC 310 (29 November 2023)