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Citadel Consultants Ltd v Wayguard Security (Pyt) Ltd (Civil Appeal No. 19 of 1994) [1995] BWCA 21; [1995] B.L.R. 218 (CA) (31 January 1995)
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J
IN THE COURT OF APPEAL OF BOTSWANA HELD AT LOBATSE
CIVIL APPEAL NO. 19/94
HIGH COURT CIVIL CASE NO. 38fi/93
In the matter between:
CITADEL CONSULTANTS LTD
Appellant
and
WAYGUARD SECURITY (PTY) LTD
Respondent
Mr. S.H. Mtashu for the Appellant
Mr. J. Carr-Hartley for the Respondent
JUDGMENT
QRAH: A.N.E. AMISSAH J.P.
W.L.K. LORD COWIE J.A. W.H.R. SCHREINER J.A.
CQHIE
J.A.
This is an appeal against a decision of the High Court at Lobatse in an action instituted by the respondent on 8th March, 1993 against
the appellant, claiming payment for providing security services at the respondent's premises. These services were provided in terms
of a written contract dated 28th March, 1989 over a period of some months at a total cost of P7, 771.22. In answer to the action
the appellant on 8th November, 1993 admitted its indebtedness to the respondent but pleaded that it
2 was excused from payment of the amount claimed by reason of the
fact that the respondent was indebted to it in the sum of P48,
2 50.00, being a claim for damages in a counterclaim in
reconvention.
The basis of the counterclaim was that the appellant averred that in November 1989 the appellant's premises had been broken into and
certain property vandalised or stolen. The appellant accordingly maintained that the respondent was in breach of a material term
of the contract between them namely, "To protect property (at the appellant's) premises and to prevent intrusion and theft",
and was therefore liable to make compensation to the appellant for breach of contract or alternatively for negligence.
On 10th November, 1993 the respondent filed a plea in answer to the appellant's counterclaim, and in particular, stated a special
plea to the effect that the appellant's counterclaim had prescribed in terms of Section 4(2) (b) (vi) of the Prescriptions Act (Cap
13:01). The plea was heard in the High Court at Lobatse, and on 2nd September, 1994 the learned Judge a quo held that the counterclaim
had prescribed and was not enforceable. Further, he held that the appellant had admitted in its plea that it was indebted to the
respondent in the amount claimed, and so he granted judgment to the respondent in the sum of P7, 771.22 together with interest and
costs. It is interesting to note
3
that, so far as it is possible to tell from the judgment of the
learned Judge a quor the only argument which was put forward by Counsel for the appellant on that occasion was that the prescriptive period, which was
said by the respondent to be three years, had been interrupted by a course of correspondence between the parties, and no argument
appears to have been presented on the ground that the prescriptive period appropriate to the counterclaim was six years and had not
expired by the time the counterclaim was filed.
I mention this because when the appellant filed its Notice and Grounds of appeal against the judgment of the learned Judge a quo, it asserted for the first time that the learned Judge a. qucj had miscontrued the relevant provisions of the Prescriptions Act,
and that put shortly, on a proper construction of those provisions the prescriptive period in the present case was six years.
If that is the correct construction of the relevant provisions of the act, then clearly the counterclaim has not prescribed because
it was filed four years after the alleged cause of action. In these circumstances the order of the learned Judge a quo would have to be reversed.
It should be noted that when Counsel for the appellant appeared before us he asked leave to amend his Grounds of Appeal
4
and the relief sought. He informed us that he was abandoning ground (6) of his Grounds of Appeal and was only proposing to argue the
remaining grounds, which were as follows:-
1.
The learned Judge erred by misconstruing Section
4 (2) (b) (vi) of the Prescriptions Act (Cap 13:01) and resultantly failed to take into account the provisions of Section 4 (2) (c)
and Section 5 of the Prescriptions Act (Cap 13:01);
2.
The learned Judge erred in not finding that Section
4(2) (b) (vi) of the Prescriptions Act (Cap 13:01)
was only applicable where there was no other provision in the same act providing for another period in respect of damages claims;
3.
The learned Judge erred in not finding that
section 4(2) (c) of the Prescriptions Act
(Cap 13:01) was applicable herein as there was a written contract;
4.
The learned Judge erred in not finding that since Sections 4(2)(b)(vi) and 4(2)(c) were generally applicable herein Section 5 of the
Prescriptions Act (Cap 13:01) could apply;
5.
The learned Judge erred in holding that the appellant's counterclaim had prescribed and was therefore unenforceable against the respondent.
As regards the relief sought Counsel for the appellant asked
leave to delete the existing paragraph and substitute therefor
the following:-
"The appellant asks that the appeal be upheld with costs and that the order of the learned Judge be substituted by the granting
of judgment to the respondent with an order that the appellant's counterclaim has not prescribed and is enforceable."
In the event, it should be noted that this Court does not
5
have the benefit of the views of the learned Judge a quo on the
grounds of appeal which are now before us and we must accordingly
decide these matters as of new.
The relevant provisions of the Prescriptions Act are in the
following terms:-
Section 4(1) Extinctive prescription is the rendering unenforceable of a right by the lapse of time.
Section 4(2) The periods of extinctive prescription shall, subject to the provisions of Section 14(2) be the following:-
(a)
One year in respect of-
(i) an action for defamation; (ii) the a
Q. rpdhibitoria? (iii) the actio quanti minoris;
(b)
three years in respect of-
(i) any oral contract;
(ii) any remuneration whatever or disbursement due to any person for or in connexion with services rendered or work done by him;
(iii) the price of moveables sold and delivered, materials provided, or board and lodging supplied;
(iv) rent due upon any contract;
(v) interest due upon any contract including a mortgage bond;
(vi) actions for damages other than those for which another period is laid down in this Act;
6
(vii) the ac_Li
doii;
(viii) subject to the provisions
of paragraph (a) condictiones indebiti. condictiones sine causa, and proceedings at common law for restitutio in integrum;
(c) six years in respect of written
contracts including bills of exchange and other liquid documents but excluding mortgage bonds unless a shorter period is applicable
under any provision of paragraph (b);
Section 5. If two or more periods of prescription may be applied to one cause of action the longest period shall be the period of
prescription.
The argument for the appellant based on the above provisions was
as follows;-
The counterclaim arose out of a written contract. This
point was conceded by the respondent. Accordingly in terms of
Section 4(2)(c) of the Act, the prescriptive period was six years
"unless a shorter period is applicable under any provision of
paragraph (b)."
His argument then proceeded on the basis that since the counterclaim was in effect an action for damages, Section 4(2)(b)(vi) was
applicable and in terms of its provisions the prescriptive period was three years unless it was an action for damages for which another
period was laid down in this act. Counsel submitted that since this was an action for damages based
7 on a written contract, the prescriptive period laid down in
Section 4(2)(c) applied and the prescriptive period was
accordingly six years. In that situation, he submitted that
there were two periods of prescription which could be applied to
this cause of action, and that, accordingly, the provisions of
Section 5 of the Act came into force, and the longer period of
six years was the period of prescription applicable to it. In
these circumstances he submitted that the counterclaim was still
enforceable and that the appeal should be allowed in terms of the
amended relief sought.
For the respondent it was argued that the construction of
the Section as put forward by the appellant was incorrect and led
to an unsatisfactory situation which resulted in a circular
argument. He pointed out that although this counterclaim arose
out of a written contract and therefore it was necessary
initially to have regard to the provisions of Section 4 (2) (c),
that subsection did not lay down an unqualified period of
prescription for such contracts. If it had done so no problem
would have arisen. Instead the prescriptive period was qualified
by the words" unless a shorter period is applicable under any
provision in paragraph (b)."
Since there was no dispute that this counterclaim was an action
for damages, that qualification had the effect of introducing the
8
provisions of Section 4(2)(b)(vi) and a three year prescriptive
period unless the action was one for which another period was laid down in the Act. He maintained that although Section 4(2)(c) laid
down another period for this type of action, that provision was qualified and had the effect of referring the enquiry back again
to Section 4(2) (b) (vi) giving rise to the circular argument already referred to. He maintained that it was not necessary to arrive
at such an unsatisfactory position and that there was a construction of the provisions of Section 4 which was apposite and did not
put undue strain on the ordinary meaning of the words of Section 4 and gave full effect to them. It could be approached in this way.
The provisions of Section 4(2)(c) should be examined first since the counterclaim undoubtedly arose out of a written contract. As
already explained it was then necessary because of the proviso to that Section to consider the provisions of Section 4(2)(b)(vi).
If content could be given to the final words of the latter subsection without going back to Section 4(2)(c) and embarking on the
circular argument already referred to, then that would be a more satisfactory solution to the problem.
He submitted that content could be given to the final words of Section 4(2)(b)(vi) without resorting to Section 4(2)(c) by considering
the provisions of Section 4(2) (a) where a
9
prescriptive period of one year is laid down for an action for
defamation, which is, of course, a type of action for damages, and accordingly gives content to the final words in Section 4(2)(b)(vi).
For my part, I would have found it very difficult to decide which of the competing constructions of Section 4 was the correct one,
except for two things.
First I consider it inequitable that actions based on written contracts which involve or include claims for damages should prescribe
after three years, whereas actions in respect of other written contracts should not prescribe for six years. However that would not
be enough, by itself, to render the construction put on the Section by the appellant as the correct one, if the words of the Section
are clear and unambiguous.
The second thing which has persuaded me that the appellant's construction of Section 4 is the correct one is the authority of two
South African cases which were not specifically referred to before us but which dealt with the same problem when dealing with very
similar Statutory provisions.
These cases are (I) Montesse
Township and Investment
Corporation (PTY) Ltd and Another
V Gouws N.O. and Another 1965
(4) S.A. 373. and (2)
Witbank Colliery Ltd V Malan 1912 (2) S.A.
TRANSVAAL 1003.
10
The first case of Montesse is directly relevant to the issue which I have to decide in the present case, because the relevant provisions in the South African
Prescription Act No 18 of 1943 are to all intents and purposes apart from a different numbering of the Sections the same as in the
Prescriptions Act (Cap 13:01).
In his judgment Beyers J.A. refers at page 384 to the
provisions of Section 3(2)(d) of the South African Act, (which
is the equivalent of 4(2) (c) of the Prescriptions Act (Cap
13:01)) and says this:-
As pointed out by Colman J. the matter is however complicated by the concluding words of Section 3(2) (d) viz
"unless a shorter period is applicable under any provision of paragraph (c)."
(This is the equivalent of paragraph (b) in Section 4(2) of the Prescriptions Act (Cap 13:01)
These words in the case of an action for damages for breach of a written contract appear to refer back to Section 3(2)(c)(vi) (which
is section 4(2)(b)(vi) of the present Act) which lays down a shorter period in respect of actions for damages, but that Section in
terms applies only to actions for damages other than those for which another period is laid down in the Act. Other periods are so
laid down both in Section 3(2) (b) (i) (which is Section 4(2) (a) (i) in the present Act) and Section 3(2)(d) (which is Section 4(2)(c)).
I agree with Colman J. that the difficulty presented by the reference back and forth between Sections 3(2)(c)(vi) and 3(2) (d) is
solved by the general provision of Section 4 (Section 5 in the present Act) that where two or more periods of prescription may be
applied to one cause of action, the longest period shall be the period of prescription.
11
This construction avoids the anomaly that an action for damages for breach of a written contract would otherwise become prescribed
three years before an action for enforcement of the same contract, and in consequence of the same breach. The period of prescription
in respect of an action for damages arising out of an oral contract is the same as the period in respect of an action for the enforcement
of such an action (See Sections 3(2) (c) (i) and 3(2) (c) (vi) . I can conceive of no reason why in the case of written contracts
the periods should differ.
This construction also accords with the construction placed upon the almost similar language in this respect of the old Transvaal
Prescription Act 1908, in the Witbank. Colliery case (Supra) . If the Legislature in enacting the prescription Act of 1943 had intended a different result, one would have expected the use of
different language.
I agree therefore with the learned Judge a quo that the applicable period of prescription is six years and not three and that the claims were therefore correctly allowed."
In the light of that very persuasive authority based on similar provisions to those in the present Act and the second case of Withfflnft Colliery, I have come to the conclusion that the construction of Section 4 for which the appellant contended is the correct one. Two or more
periods of prescription are applicable to this counterclaim and accordingly in terms of Section 5 of the present Act the prescriptive
period for this counterclaim is six years and it is therefore still enforceable.
In these circumstances I would allow the appeal and make an Order in terms of the amended Relief sought.
So far as the costs of the hearing before the learned Judge
12
a quo are concerned, I note that he awarded them to the
respondent. I would leave that order standing since the appellant did not argue the point upon which his present appeal has been successful.
A further motion was made by the respondent that he should be awarded the costs in the motion for stay of execution of the judgment
of the learned Judge a quo but I see no reason for that, and I am of the opinion that the costs of that application should follow success in this Appeal and
should be awarded to the appellant.
PRONOUNCED IN OPEN COURT THIS 31st DAY OF JANUARY, 1995.
LORD W.L.K COWIE JUDGE OF APPEAL
13
I agree
A.N.E.AMISSAH JUDGE PRESIDENT
I agree
W.H.R. SCHREINER JUDGE OF APPEAL
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