IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION, MAKHANDA)
CASE NO. CA 98/2025
In the matter between:
METCALF & Co APPELLANT
and
CRADOCK PORTFOLIO INVESTMENTS CC RESPONDENT
ORDER
On appeal from: The Eastern Cape Division of the High Court, Makhanda
(Lowe J sitting as the court of first instance):
The appeal is dismissed with costs on scale B.
JUDGMENT ON APPEAL
Rugunanan J (Malusi J and Ngoqo AJ concurring):
[1] Prompted by an order dismissing a special plea of prescription with costs,
the appellant, with the leave of the trial judge, appeals against the dismissal
order.
[2] On 23 April 2012 summons was served on the appellant (as defendant),
in which it was suited in an action for damages in the amount of R2 142 708.26
claimed by the respondent (as plaintiff), due to the appellant’s negligent breach,
of mandate through Mr Moolman, an attorney, partner and director, to act as
conveyancer in relation to several erven in a property development (the
Riverside development) initiated by the respondent in Cradock (now Nxuba).
[3] The respondent’s grievance through its Mr Joubert, a fifty percent
partner/shareholer, is that there were protracted delays in the series of batch
transfers of the development erven identified for registration in the Deeds
Office, Cape Town with consequent loss due to failure by Mr Moolman to
utilise a more expeditious transfer process, the so -called counter-cover process,
of which he was unaware since inception of his mandate during mid -2006. The
first batch involving twenty-nine erven were registered on 28 July 2008, and the
second batch of seven erven were registered on 17 April 2009.
[4] The loss, claimed as damages, represents interest calculated at 12,5 % per
annum on the sum of R9 350 000 being the total amount of the purchase price
of the erven sold and transferred to individual purchasers which the respondent
alleges it could have earned over a period of 22 months from 27 June 2007
(when all transfers ought to have been completed if the counter -cover process
was utilised) to 28 April 2009, the latter being the date on which the appellant
accounted to the respondent.
[5] In its special plea the appellant alleges that the debt claimed by the
respondent would have arisen and become due no later than 27 June 2007 and in
terms of the Prescription Act 68 of 1969 (the Act), the debt would have
prescribed on 26 June 2010 prior to the service of summons on 23 April 2012.
[6] In the alternative, the special plea alleges that the parties agreed that the
development erven were to be transferred in batches (i.e. phases 1 and 2), and in
respect of the first batch that was registered on 28 July 2008, a claim for
damages would have prescribed on 27 July 2011; and regarding the second
batch registered on 17 April 2009, the claim would have prescribed on 16 April
2012 – the claims in both instances became prescribed before summons was
served on 23 April 2012.
[7] In its replication, the respondent pleaded that:
7.1 the appellant throughout the exercise of its mandate advised that the
transfer process must occur in batches and that the process was
proceeding normally;
7.2 such advice was accepted as correct having regard to the appellant’s
professional standing;
7.3 as a consequence of the advice which the appellant knew or ought to have
known the respondent would accept as correct, the respondent did not
know of the identity of the debtor or of the facts from which the debt
arose as envisaged in s 12(3) of the Act, such knowledge having been
obtained at the earliest on 20 July 2009 after consulting with an
independent attorney, Mr Gerald Friedman.
[8] On 8 October 2024, prior to the commencement of the trial the appellant
conceded that it acted negligently as alleged, and that such negligence is
causally linked to the respondent’s agreed/proven damages. 1 In the conduct of
the trial, which commenced on 28 October 2024, the appellant conceded the
existence of a counter -cover procedure in the Deeds Office in Cape Town,
which procedure could and should have been utilised. 2 The concession arose
upon delivery by respondent of an expert report by Ms Jean Herbert, a
conveyancer, in which she set out the counter-cover process including the deeds
office procedures that should have been utilised by Mr Moolman. The report
noted various omissions and delays that were caused due to inobservance of the
process detailed. Ms Herbert having expressed the opinion that such delays and
omissions could have been avoided by a prudent conveyancer.
[9] The appellant’s concession renders it unnecessary to elucidate the
extensive evidence as to exactly how the transfers were handled and is of no
relevance to the prescription issue. However, noteworthy to mention is that on
20 July 2009, Mr Friedman wrote to the respondent stating: ‘My prima facie view
is that there is a claim for damages. The extent of the claim is completely unknown. ’ More
than that Mr Friedman stated: ‘The advice given to delay registration of phases 1 and 2,
clearly have no merit.’ Accordingly, taking into consideration the concessions on
causal negligence and the existence of the counter -cover procedure, the trial
proceeded solely on the special plea, the question of the quantification of
damages having stood over for adjudication in due course.
1 This was incorporated in an order taken before Lowe J on 8 October 2024.
1 This was incorporated in an order taken before Lowe J on 8 October 2024.
2 Judgment, Lowe J para 6.
[10] Tritely, prescription shall commence to run as soon as a debt is due.
Relevant for present purposes is s 12(3) of the Act which states that:
‘A debt shall not be deemed to be due until the creditor has knowledge of the identity of the
debtor and of the facts from which the debt arises: Provided that a creditor shall be deemed to
have such knowledge if he could have acquired it by exercising reasonable care.’3
[11] A conspicuous feature of s 12(3) is that prescription generally runs
against a creditor when there is either knowledge or awareness of the debt.
Knowledge and awareness may have different meanings but in the context of
the section, they are generally applicable to the same thing i.e. the identity of
the debtor and the facts from which the debt arises. 4 The knowledge that s 12(3)
contemplates could either be actual or deemed. Actual knowledge relates to the
subjective knowledge that a creditor acquires, while deemed knowledge, which
is contemplated in the proviso to the section, is that which a creditor could have
acquired by exercising reasonable care.5
[12] In Le Roux and Another v Johannes G Coetzee and Seuns and Another 6
(Le Roux CC ), now a leading authority on when prescription begins to run in
claims against legal practitioners for professional negligence, the Constitutional
Court considered whether ‘the facts’ may include knowledge of a legal
conclusion (wrongfulness, fault or negligence) if such legal conclusion forms
part of the cause of action or minimum facts for enforcing payment of a debt.
Put another way, if a legal conclusion is the only way in which a creditor can
obtain knowledge that a legal practitioner had given incorrect legal advice, or
had not professionally discharged a mandate, the question is whether that
3 In Rademeyer v Ferreira [2024] ZACC para 59 Majiedt J said, ‘Prescription of a debt starts running as soon as
the debt becomes due, or when knowledge of the debt becoming due can reasonably be expected of a creditor.
Prescription is judicially interrupted when process initiating lawsuit for a recovery for that particular debt is
issued and served on the debtor.’
4 Le Roux and Another v Johannes G Coetzee and Seuns and Another (Le Roux CC) (CCT117/22) [2023] ZACC
46 para 39.
5 Le Roux CC supra para 40.
6 Le Roux CC supra para 41.
constitutes knowledge of a fact which s 12(3) contemplates, or knowledge of a
legal conclusion. 7 The majority in Le Roux CC opined that for purposes of s
12(3), in professional negligence claims against legal practitioners, the facts
from which the debt arises may include a legal conclusion, 8 and only when such
is known then does prescription begin to run. This is a limited exception to the
general rule that legal conclusions are not primary facts, and therefore
knowledge of such conclusions is not a requirement in s 12(3) to trigger the
running of prescription.9
[13] The exception applies only in the instance of professional negligence
claims against legal practitioners. Its rationale is that a client is entitled to rely
on the correctness of legal advice received from a legal practitioner but may due
to a lack of expert legal knowledge be unable to discern that an actionable act or
omission (something wrong) occurred without having first obtained an opinion
from a legal practitioner or specialist. 10 Le Roux CC made it clear that the
exception is limited to ‘… those who seek and obtain legal advice or give a mandate only
to later discover that the advice was incorrect or that the mandate not discharged in the
manner required by the law.’
[14] Accordingly, Le Roux CC suggests that in the context of claims against
legal practitioners prescription only beings to run once the creditor (i.e. the
client) had knowledge or could have acquired knowledge through the exercise
of reasonable care that the legal advice given or the execution of the legal
mandate was incorrect and that a claim against the practitioner existed.
Referring to precedent, Le Roux CC appears to have accepted that w hether
7 Le Roux CC supra para 66.
8 Le Roux CC supra para 79.
9 See Le Roux CC supra paras 43 -49 and the cases referred to in which the distinction between primary or
material facts and legal conclusions is elucidated.
material facts and legal conclusions is elucidated.
10 See the reference to Links v Member of the Executive Council, Department of Health, Northern Cape
Province 2016 (4) SA 4514 (CC) in paras 50 and 51 of Le Roux CC.
conduct would constitute a failure to take reasonable care would depend on
several factors expressed in the following terms:
‘Whether the failure on the part of the creditor to take such steps amounts to a failure to
exercise reasonable care within the meaning of the proviso or not depends … upon a
consideration of all the circumstances relevant to the creditor’s conduct, including, in the
context of the present case, such factors as the plaintiff’s physical and mental condition, the
pain he was suffering, his memory function and the environment in which he then found
himself.’11
[15] In summary Le Roux CC determined that, as a limited exception to the
general rule, facts may include knowledge by a creditor of a legal conclusion if
such conclusion forms part of the cause of action or minimum facts for
enforcing payment of the debt. A suspicion that conduct would be actionable or
wrongful would be a fact but could never constitute a legal conclusion, because
a suspicion by its nature is incompatible with a conclusion of law.12
[16] The core issue in this appeal, as was in the trial court from which the
appeal emanates, is the question whether such knowledge (i.e. knowledge of a
legal conclusion, as a fact) could have been established through the exercise of
reasonable care to trigger prescription. In addressing the issue, the
parties referred to the trial court’s extensive analysis of the judgment in Le Roux
CC, their arguments, however turning on factual matter pertinent to the provisio
in s 12(3) of the Act and directed at whether Mr Joubert’s attainment of factual
knowledge, including the legal basis thereof, occurred in circumstances that
may be considered reasonable. That is the crux of the matter and is ultimately
the issue upon which the appeal turns.
[17] Two witnesses, Mr Moolman and Mr Schulze (both attorneys and
directors of the appellant in Cradock), testified for the appellant on the merits of
11 Brand v Williams supra at 916.
12 Le Roux CC supra para 48.
the special plea – the appellant, accepting the duty to begin and the onus. Mr
Joubert testified for the respondent, and so did Mr Gerald Friedman, an
attorney/conveyancer of the firm Friedman Scheckter in Gqeberha (formerly
Port Elizabeth). For present purposes, the evidence is dealt with only to the
extent as is necessary for the issue to be decided, the trial court having noted
that Mr Friedman’s evidence took the matter no further. Indeed, neither of the
parties referred to his evidence during argument on appeal.
[18] In the timeline of events since 27 June 2007 to 23 April 2012 being the
date respectively when all transfers should have been completed and the date of
service of summons, the following occurred: The first batch of transfers was
lodged on 19 May 2008, rejected on 27 June 2008, and finally registered on
28 July 2008. A meeting between Mr Schulze and Mr Joubert occurred during
August 2008, the evidence indicating at that stage that Mr Joubert was highly
stressed due to the delay in transfers and the attendant delay of incoming funds
from the sale of development erven obliging the respondent to arrange a bank
overdraft to make up for its distressed financial state.
[19] In December 2008 Mr Joubert consulted a friend, Mr Johan Krause, an
advocate from Gauteng. Nothing significant turns on the meeting with him. He
specialises in criminal law and has no knowledge about conveyancing matters.
Mr Joubert was told by him that he could not proffer advice on expected
timeframes for effecting transfers.
[20] As events unfolded Mr Joubert’s stress levels intensified. He struggled
with a stress induced medical condition for which he was prescribed medication
and was at risk of developing a substance addiction.
[21] In January 2009 a second meeting took place. It was attended by
Mr Joubert, Mr Schulze, Mr Moolman and a few other persons not relevant to
mention since they were not trial witnesses. At the time of that meeting it is
common cause that neither Mr Moolman nor Mr Joubert knew of the counter -
cover procedure and that the advice given by Mr Moolman to register the
development erven in batches and his positive assurances were misguided. It is
appropriate to mention in abridged terms that much of Mr Moolman’s evidence
was irrelevant to the prescription issue but lengthy in explaining the
conveyancing process in the Riverside Development. He admitted unnecessary
delays which could have been avoided had the counter -cover procedure been
utilised of which he was unaware and remained so until he received the expert
report of Ms Herbert in 2016 – it being clear that at no time until then did he
believe that he acted negligently and in breach of his mandate.
[22] The second batch of transfers was registered on 17 April 2009. Mr
Joubert, on the recommendation of an attorney friend Mr Koustadis, had direct
contact with Mr Friedman on 14 July 2009, and was informed by him on 20
July 2009 that prima facie the respondent had a claim but more facts were
required for a formal, definitive opinion to be provided.
[23] Although Mr Joubert initially believed that the meeting of August 2008
did not occur, the trial court accepted Mr Schulze’s evidence that the meeting
took place. The court found that Mr Schulze had no personal knowledge of the
mandate or the conveyancing transactions and was not shown in any way to
have been unreliable. Overall, in respect of Mr Moolman’s assurances to Mr
Joubert that matters were under control the trial court accepted that he truly
believed his assurances until he was disabused of his view in 2016. Mr Joubert,
on the other hand, was observed to have been generally uncertain as to dates in
the timeline including, on his reckoning, a further meeting in May 2009 (denied
by Mr Schulze and Mr Moolman), the trial court noting that Mr Joubert, though
by Mr Schulze and Mr Moolman), the trial court noting that Mr Joubert, though
not deliberate in his uncertainty this nonetheless merely due to considerable
pressure affecting his recall and being deeply concerned and upset about the
delays that occurred and attendant losses.
[24] Contrary to the submission made by the appellant that Mr Joubert lied in
his evidence on the dates in the timeline relevant, this to avoid the effects of
prescription, the difficulty is that this intuitive appraisal does not manifest as an
objective fact in the record from which it may be concluded that the trial judge
erred in failing to have regard thereto. Although the trial judge granted leave to
appeal ostensibly on the basis that he might have erred in finding Mr Joubert a
credible factual witness, the trial judge was better positioned to assess the
credibility of the witnesses and the reliability and honesty of their versions. This
advantage is not necessarily confined to the fact -finding process, but may
extend also to the inferences to be drawn from the facts. 13 That being so, it is
accepted that a court of appeal will not lightly interfere with the factual findings
of a trial court unless there is a demonstrable and material misdirection and/or a
finding that is clearly wrong. 14 Having applied the conventional approach to the
evidence and the probabilities,15 and allowing for mistakes that may not entirely
affect credibility,16 the trial court found all the witnesses to be generally honest
without inclination of deliberate mendacity. I am unable to hold otherwise.
[25] In argument the appellant laid much emphasis on the meetings of August
2008 and January 2009 at which Mr Joubert, although unclear about dates,
13 See Meintjies v Esterhuizen & Another [2003] JOL 12335 (E) cited with approval in fn 85 of the dissenting
judgment by Pillay AJ in AK v Minister of Police (CCT 94/20) [2022] ZACC 14 (5 April 2022). At para 151
Pillay AJ stated: ‘ [F]or an appellate court to overturn the findings of fact and credibility made by the court of
first instance is exceptional. The rationale for this general rule is that, being steeped in the trial, the court of first
instance would have the opportunity to observe the demeanour, “appearance and whole personality” of
witnesses and would thus be better placed than the appeal courts to test and evaluate the evidence against
impressions created by witnesses.’
14 Mashongwa v PRASA 2016 (3) SA 528 (CC) para 45.
15 National Employers General Insurance Co. Ltd v Jagers 1984 (4) SA 437 (E) at 440D -G. See too Mabona &
another v Minister of Law and Order & others 1988 (2) SA 654 (SE) at 662C-F; Stellenbosch Farmers’ Winery
Group Ltd & another v Martell et Cie & others 2003 (1) SA 11 (SCA) para 5; Dreyer & another NNO v AXZS
Industries (Pty) Ltd 2006 (5) SA 548 (SCA) para 30.
16 Also known as ‘self-contradiction’ – see S v Oosthuizen 1982 (3) SA 571 (T) at 576D-G.
confirmed the meetings and complained of the late registrations and accused
Mr Moolman of causing the respondent to lose money. Relying on Mr
Schulze’s evidence (similarly repeated in the second meeting) that he informed
Mr Joubert that the appellant had insurance cover and told him to see an
attorney and to file a claim which would then be sent to the insurers, the
appellant in its heads of argument submitted that despite whatever
circumstances Mr Joubert had found himself in, he would have been in a
position to have consulted Mr Friedman no later than October 2008 and there
was accordingly no reason why the claim could not have been instituted by
about November or December 2008 before prescription interceded.
Alternatively, Mr Joubert could have consulted with Mr Friedman within three
months from January 2009 and hence there was no reason why the claim could
not have been instituted during April 2009 before it prescribed.
[26] The abovementioned three -month period relied upon in submissions by
the appellant stemmed from Mr Joubert’s evidence of that timeframe in the
ordinary course of a registration process he listened to on a radio station. It had
nothing to do with the reasonable period for investigations.
[27] The appellant’s contentions overlook the fact that at both these meetings
Mr Schultz did not purport to provide legal advice given his lack of direct
involvement and knowledge of the mandated transfers. Moreover, Mr
Moolman’s mandate was incomplete and while the circumstance of delay and
financial loss to the respondent (at that stage unquantified) gave rise to irritation
and suspicion in Mr Joubert that there was wrongdoing on the part of
Mr Moolman, this according to the trial court did no more than warra nt further
enquiry. As held in Le Roux CC prescription would only start to run upon
conclusion of that enquiry if that suspicion were confirmed, or upon the expiry
of a reasonable period for investigations – in this matter, at the earliest, before
20 July 2009.
[28] The appellant contended that Mr Joubert should have commenced that
enquiry at an earlier time, this being no later than October 2008 or within three
months from January 2009. In that regard the arguments pertinent to the
meetings of August 2008 and January 2009 were recapitulated. Laying
emphasis on the judgment of the trial court, the respondent correctly contended
that the appellant who bore the onus, led no evidence as to when that enquiry
should reasonably have commenced nor how long such enquiry should
reasonably have taken.
[29] At both meetings the evidence indicates that although annoyed by the
delays and having assessed the respondent’s loss at about R3 million, Mr
Joubert was in no position to factually and reliably have had any real view of
the minimum facts, including knowledge of the counter -cover procedure as well
as negligence as the legal basis for sustaining a claim. This remained the
position throughout his meetings with his legal friends and until his first
meeting with Mr Friedman who expressed a preliminary view on 2 0 July 2009,
save that he was unable to assess or quantify the debt.
[30] On the facts indications are that none of the parties, Mr Joubert in
particular, were in a position by 20 July 2009 to have made a legal assessment
that Mr Moolman had indeed been negligent due to being unaware of the
counter-cover procedure and that he was negligent in the execution of his
mandate, let alone that such negligence was causally linked to the respondent’s
loss. It was only upon delivery in 2016 of the expert report by Ms Jean Herbert
that Mr Moolman comprehended that he failed to execute his mandate
diligently and without negligence – a fact the trial court observed, Mr Moolman
accepted honestly and unequivocally.
[31] In that context, the prescription defence is unsustainable and interference
with the judgment of the trial court is not warranted. In my view the trial court
correctly concluded on the facts that the timeline relevant went well beyond
April 2009 for the commencement of the running of prescription.
[32] On costs, the general rule is that they follow the result. Following that
rule, the respondent is entitled to its costs. As for the costs of counsel the parties
contended for the costs on scale C of uniform rule 67A. This was not
meaningfully argued with reference to the applicable factors contained in the
rule with emphasis on their relevance to the making of the costs orders
contended for. In these circumstances while accepting that counsel competently
argued the matter, my approach, without seeking to pu t in place any hard and
fast rule, is that counsel are better positioned to mark fees based on their own
assessment of the reasonable value they ascribe to their professional services.
That said, scale B must apply.
[33] In the result the appeal is dismissed with costs on scale B.
____________________________
M. S. RUGUNANAN
JUDGE OF THE HIGH COURT
I agree.
____________________________
T. MALUSI
JUDGE OF THE HIGH COURT
I agree.
____________________________
D. NGOQO
ACTING JUDGE OF THE HIGH COURT
Appearances:
For the Appellant: S S W Louw , Instructed by Netteltons Attorneys,
Makhanda (Ref: Mr Hart); Tel 046-622 7149; Email: liza@netteltons.co.za
For the Respondent: F H Smit of Nolte Smit Inc., Makhanda (Ref: Mr F
Smit); Tel 046-622 7209; Email michelle@noltesmit.co.za
Date heard: 16 March 2026.
Date delivered: 18 August 2026.