IN THE HIGH COURT OF SOUTH AFRICA
NORTHERN CAPE DIVISION, KIMBERLEY

CASE NO: 1911/2016

Heard on: 26 June 2018
Delivered on: 21 September 2018

In the matter between:

SIPHO CAMNDEY MALINGA	1ST PLAINTIFF
IRENE KGOMOTSO MALINGA	2ND PLAINTIFF

and

ELIZABETH HANELEY BRADWELL	1ST DEFENDANT
REGISTRAR OF DEEDS, VRYBURG	2ND DEFENDANT

JUDGMENT

VUMA, AJ

INTRODUCTION

[1]	This matter relates to an action instituted by the plaintiffs for specific performance in the form of transfer of property described as 11 Bosduif Avenue, Dingleton, Northern Cape Province (hereinafter “the property”), arising from a Deed of sale that was concluded on 5 February 2007 between the plaintiffs and the first defendant.

[2]	The defendant defended the action and filed a Special Plea of extinctive prescription, claiming that the plaintiffs’ claim fell due on 8th July 2007, alternatively on 8th July 2010 in terms of section 11(1)(d) of the Prescription Act 68 of 1969 (“the Act”).

[3]	A summons was served on the first defendant during September/ October 2016 and it is alleged by the first defendant that the claim for transfer of the property has prescribed. In the premises the first defendant seeks for an order that the Special plea be upheld with costs including costs occasioned by the urgent application launched by the plaintiffs and reserved as per the court order dated 27 July 2016.

[4]	At the commencement of the trial, the parties submitted that the matter should only proceed and be argued on a point of law, namely, prescription and not on the facts. However, for completeness sake, the salient features relating to the factual background are referred to hereinafter.

BACKGROUND FACTS

[5]	On 5 February 2007 the plaintiffs and the first defendant (‘the parties”) concluded a written Deed of sale in terms of which, inter alia, the purchase price for the property was set in the amount of R55 000-00, including the payments already paid in advance to the first defendant by the plaintiffs.

[6]	Prior to the above and before the Deed of sale was concluded, on 21 September 2006, the plaintiffs paid an amount of R5000-00 (FIVE THOUSAND RAND) to the first defendant. A further payment of R25 000-00 (TWENTY FIVE THOUSAND RAND) was paid to the first defendant by the plaintiffs on 2 February 2007. The plaintiffs took occupation of the property on 31st March 2007. The balance of the purchase price being R25 000-00 (TWENTY FIVE THOUSAND RAND) was payable in monthly installments of R5000-00 (FIVE THOUSAND RAND) each, the first installment to take place on 7th March 2007 and further payments to be made on or before the 7th day of each month thereafter. The remaining installments payable in respect of the purchase price would be due and payable on the 7th March 2007, 7th April 2007, 7th May 2007, 7th June 2007, and 7th July 2007.

[7]	The first defendant passed away on 9 September 2015 and Elizabeth Bradwell was appointed on the 1st October 2015 as Executrix to administer the estate of the first defendant.

[8]	On 9 February 2018 the plaintiffs tendered payment of ‘the balance’ of R15 000-00 in respect of the purchase price against the transfer of the property into the names of the plaintiffs, which offer the first defendant declined. The plaintiffs made this offer as they alleged that they had made a further payment of R10 000-00 in respect of the purchase price on 5 March 2007. The first defendant denies receiving such payment and the plaintiffs thereafter admitted its indebtedness to the first defendant in the amount of R25 000-00 since they could not produce proof of the alleged payment.

[9]	The above facts culminated in the plaintiffs issuing summons in September/ October 2016 for the transfer of the property against their payment of the balance of the purchase price of R25 000-00. It is common cause in paragraph 1.11 of the parties’ Minute of the Pre-trial Conference signed on 14 November 2017, the plaintiffs admitted that they breached clause 1 of the Deed of sale in that they have failed to pay the outstanding amount of R25 000-00, in respect of the purchase price, starting on or before the 7th March 2007.

SUBMISSIONS BY PLAINTIFFS

[10]	In his opening address, Mr Van Riedt for the plaintiffs submitted that the only issue for determination concerns prescription, arguing that since there is no direct law, they therefore base their arguments on academic opinion. He disputed the first defendant’s argument that since the Deed of sale was concluded in 2006/2007, coupled with the fact the plaintiffs’ claim was one of specific performance in the form of transfer, that the latter should have therefore claimed transfer of the property long ago since the claim has become prescribed. The plaintiffs’ counsel conceded that at the time summons was issued, the claim had indeed already prescribed by almost 5 (five) years. He then formally tendered payment of the balance of the purchase price of R25 000-00 on behalf of the plaintiffs.

[11]	Upon the first defendant’s not accepting the payment tender by the plaintiffs, the latter’s counsel made the submissions as they appear below-herein.

[12]	He submitted that prescription begins to run when a debt is due in terms of section 12(1) of the Prescription Act 68 of 1969. He conceded that the Deed of transfer gives no specific date of transfer but only refers to the R25 000-00 that was to be paid by the plaintiffs within specified dates. He argued that since there was no specified date for the transfer, transfer would therefore have only taken place upon the final instalment being paid by the plaintiffs. He submitted that since the plaintiffs never paid the outstanding balance of R25 000-00, the debt therefore never became due and thus prescription did not begin to run, given the fact that the plaintiffs’ payment of the balance of the purchase price was a prerequisite for the transfer.

[13]	He conceded that the principle relied on by Mr Boot appearing for the first defendant that a creditor cannot delay prescription through his own inactions at the debtor’s expense is one upon which the courts have recognized and been relying on for the past 30 (thirty) years. He stated that regardless of the above and the fact that the said principle have also been confirmed and upheld by the Constitutional Court, his that his view was that the said principle was not applicable in casu. He alluded to the object of the prescription, namely, to avoid stale claims He further conceded that in casu, before we get to the demand part, there is a payment that needs to be made by the plaintiffs/ creditor, which is exactly what is creating problems for the plaintiffs.

[14]	He submitted that there are exceptions which this court should consider if they are applicable in this matter and in respect of which this court should make a finding, namely:
14.1	Whether it was agreed between the parties or whether the parties implied that the payment of the balance was a pre-condition for the making of the demand for the transfer, meaning, as a pre-condition, prescription would not run until payment is fulfilled. He argued that if the court so finds, then prescription cannot be said to have started to run.
14.2	The second exception relied on by Mr Van Riedt is gleaned from a Publication titled Extinctive Prescription, written by Professor M.M. Loubser and published in 1996. He submits that in this book Professor Loubser states that there is a reciprocal obligation from both parties. In line therewith he submits that the seller/ first defendant could have, say, a month after the plaintiffs had defaulted on their first instalment payment, accelerated and claimed the total outstanding balance, then tender the transfer against the payment of the total balance. This approach, Mr Van Riedt submits, would have obviated this action. He submitted that in casu the delay came from both the plaintiffs and the first defendant, and thus making prescription a far-fetched defence or and/ or a Special plea. In this regard he submits that there is no case law that does not refer to Professor Loubser’s book, including the Constitutional Court. He adds however, that in respect of the paragraph to which he refers this court, the Constitutional Court does not refer to it.
14.3	Mr Van Riedt further referred the court to the breach/ acceleration clause wherein it is stated that the seller shall be entitled to accelerate and claim the total outstanding balance, then tender transfer against the payment of the total balance in the event the plaintiff failed to pay within the stipulated date/s. He further submitted that as was held in the matter of Trinity Asset Management (Pty) Ltd v Grindstone Investments 132 (Pty) Ltd 2017 (12) BCLR 1562 (CC), a demand for payment must be found to have been a precursor for prescription.

[15]	The plaintiffs rely on section 13(2) of the Prescription Act provisions and it is submitted on their behalf that their claim has not become prescribed because the first defendant’s reciprocal right to claim payment has not yet prescribed. In this regard the plaintiffs’ counsel submitted that in terms of section 19(2) of the Alienation of Land Act 68 of 1981 (“the Land Act”), the first defendant was required to first make a demand on the plaintiffs for payment of the balance of purchase price with a 30 day notice period before it would have been entitled to institute action for such payment by the plaintiffs. It is thus argued that to the extent that the first defendant failed to comply with the above provision, the plaintiffs are entitled to an order that the property be transferred into their names.

[16]	The plaintiffs further submit that Section 19 of the Alienation of Land Act 68 of 1981 and the acceleration clause in Clause 6 of the Deed of Sale are applicable to the facts or the contract in casu.

SUBMISSIONS BY THE FIRST DEFENDANT

[17]	In reply to the above, Mr Boot appearing for the first defendant submitted that since summons in casu was only issued sometime after September 2016, in this matter it was therefore not the law that is in dispute but the application of same to the facts.

[18]	He further submitted that the plaintiffs’ claim for transfer of the property constitutes a claim for a debt as contemplated in the Prescription Act 68 of 1969. He further submitted that in terms of section 11(1)(d) of the Act the plaintiffs’ claim fell due on 8th of July 2007, alternatively on the 8th July 2010. He submitted that based on that the plaintiffs were therefore under an obligation to cause summons to be served on the first defendant within a period of 3 years calculated from the 8th of July 2007, alternatively within a 3 year period calculated from the 8th of July 2010. However, the plaintiffs only served the said summons after 9 (nine) years after the date on which the plaintiffs’ debt became due. He thus submitted on behalf on behalf of the first defendant that the plaintiffs’ claim is prescribed in terms of section 11 of the Act.

[19]	Regarding the question of law, Mr Boot submits that Professor Loubser’s approach is inapplicable since it is against the legally-established principle that the obligation to demand payment lies solely with the creditor.

[20]	He further submitted that the sole pillar upon which the plaintiffs base their claim is section 19(2) of the Land Act, namely, that the first defendant should have first made a demand on the plaintiffs for payment of the balance of purchase price with a 30 day notice period before it would have been entitled to institute action for such payment by the plaintiffs. He argued that section 19(2) provision is not applicable in casu, the reason being that the Land Act does not apply to the facts and to the contract in casu and further that the Land Act applies to contracts in terms of which the payment by the purchaser to the seller is in more than two instalments over a period exceeding one year. It is submitted that in casu, the agreed instalment payment period was a period not exceeding 5 (five) months and thus less than a year period.

[21]	It is further submitted that the first defendant’s reciprocal right would have been the right to claim payment, which right is excluded in section 19(1) in so far as the first defendant elects not to rely on an acceleration clause but enforces his right in accordance with the months in which the instalment fell due and was not paid by the plaintiffs, that is, 7th May 2007, 7th June 2007 and 7th July 2007. The argument goes further that since the first defendant opted not to enforce the acceleration clause contained in Clause 6 of the Deed of Sale, then accordingly section 19 of the Act would also not be applicable.

[22]	Regarding the argument that the obligation to demand payment is reciprocal on both parties, Mr Boot argued that it is only the creditor who has the exclusive power to demand that performance be made when the creditor so chooses. He refuted the suggested application of the exception that the first defendant could have accelerated the payment and tendered transfer, arguing that unless the material condition was first fulfilled by the plaintiffs, there is no way the first defendant would have been able to determine the due date. He submitted that the nature of the first defendant’s right is such that a demand is not necessary since the contract or the Deed of sale specifies the date of performance or payment. He concedes that since the Deed of sale is silent in relation to the date of transfer therefore the right to claim transfer became due on date of signature.

[23]	Of much importance is the fact that Mr Boot disputes Mr Van Riedt’s submission that the implied term between the parties was that transfer of the property would only be effected upon payment being made by the plaintiffs, arguing that even from the reading of the Deed of sale, no reference is made that payment and transfer are incidental to one another and further that there is neither such an express term. He argued further that neither have the plaintiffs met the requirements regarding implied terms and that even Lambrecht v Lyttleton Township (Pty) Ltd 1948 (4) SA 526 (T) on which the plaintiffs rely was rejected by the SCA. In short, Lambrecht, supra refers to an instance where none of the debts have been defined.

ISSUES FOR DETERMINATION

[24]	Based on the above, the issues for determination are the following:
17.1	whether the plaintiffs’ claim for specific performance of the transfer of the property has prescribed;
17.2	whether the parties have agreed or it was an implied term of the agreement that payment and transfer would coincide; and
17.3	whether both parties have a reciprocal duty to demand payment.

THE LAW

[25]	Section 11(1)(d) of the Prescription Act 68 of 1969 (“the Act”) provides that
the periods of prescription of debts shall be the following:
…….
(d) save where an Act of Parliament provides otherwise, three years in respect of any other debt.’

[26]	Section 12 of the Prescription Act 68 of 1969 (“the Act”) provides that:
‘(1) Subject to the provisions of subsections (2) and (3), prescription shall commence to run as soon as the debt is due.

CASE LAW

[27]	In the matter of Trinity Asset Management v Grindstone 2018 (1) SA 94 CC, the court held that as a general rule, prescription begins to run when a debt arises, unless the parties clearly stipulated otherwise. Cameron J, in his majority judgment, found that a demand was not a precursor for a prescription and that in fact, the creditor has the exclusive power to demand that performance be made when the creditor so chooses.

[28]	In the matter of Frieslaar NO and Others v Ackerman and Another [2018] JOL 39600 (SCA) at 28 the court endorsed the principle that 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 or in certain cases, within a reasonable time.

[29]	In the matter of Phasha v Southern Metropolitan Local Council of the Greater Johannesburg Metropolitan Council 2000 (1) All SA 451 (W), Satchwell J, as she then was, approved the principle that a right to claim performance under a contract ordinarily becomes due according to its terms or, if nothing is set, within a reasonable time, which, in appropriate circumstances, can be immediately. In this matter the court held that for a period of 13 years the applicant had failed to perform and they now sought to rely upon their own lack of conduct to postponing the commencement of prescription. The court further held that if creditors are allowed by their deliberate or negligent acts to delay the pursuit of their claims without incurring the consequences of prescription, the purpose of the Prescription Act would indeed be subverted. It thus upheld the Special Plea of Prescription.

[30]	Regarding the question of the seller electing not to enforce the acceleration clause, it was held in the matter of Van Niekerk & Another v Favel [2007] JOL 20697 (SCA) (Cloete, Navsa, Scott JJA, NV Hurt, Kgomo AJJA) that section 19 did not affect the seller’s right to make an election as to which remedy it wanted to enforce.

[31]	Regarding policy considerations, the Supreme Court of Appeal (SCA) held the following in the matter of Santam Ltd v Ethwar [1999] 1 All SA 252 (A):
‘One of the main purposes of the Prescription Act is to protect a debtor from old claims against which it cannot effectively defend itself because of loss of records or witnesses, caused by the lapse of time. If creditors are allowed by their deliberate or negligent acts to delay the pursuit of their claims without incurring the consequences of prescription, that purpose would be subverted.’

[32]	In the matter of Van Vuuren v Boshoff 1964 (1) SA 395 (T), Coleman J held the following:
‘The Act was designed to penalise the person who can enforce his claim by action, but does not do so, and not the person who delays taking action because he is not yet able to do so.’

[33]	As was held by Van Der Westhiuzen J in the matter of Road Accident Fund & Another v Mdeje 2011 (2) SA 26 CC, ‘In the interest of social certainty and the equality of adjudication, it is important, though that legal disputes be finalised timeously……..For claims 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.

ANALYSIS

[34]	Foremost, it is common cause that despite the first defendant alleging that the terms of the deed of sale were breached, the Deed of sale was never cancelled.

[35]	It is common cause that the plaintiffs’ claim is for the transfer of the property against a tender of payment of the outstanding purchase price is a contractual one. It is further common cause that the plaintiffs’ submission that the first defendant was required to first make a demand on them for payment of the balance of the purchase price with a 30 day notice period before it would have been entitled to institute action for the payment of such balance against them (plaintiffs) is premised on what they argue to be the provisions of section 19(2) of the Alienation of Land Act 68 of 1981. With regard hereto I am of the view that the said provisions are inapplicable given the fact that the payment period within which the balance of the purchase price should have been made was supposed to have been within 5 (five) months of the signing of the Deed of sale.

[36]	With regard to the provisions of section 13(2) of the Prescription Act, when same are applied to the facts in casu, I am of the view that the plaintiffs’ claim would have fell due and claimable immediately upon signature of the Deed of sale. However, due to the provisions of section 13(2) of the Act, I am of the further view that prescription would only have commenced running as from 7 July 2007 thereby finally prescribing on 7 July 2010.

[37]	Even if I was to favour the plaintiffs’ argument regarding section 13(2) provisions of the Act that the first defendant had a reciprocal right to claim payment of the purchase price, I am of the view that same would have become prescribed on or about the 7th July 2010, invariably resulting in the plaintiffs’ claim becoming prescribed on or about the 7th July 2010.

[38]	I now turn to the two exceptions which were raised by Mr Van Riedt wherein I have been requested to make a finding. In respect of exception relating to the implied term that transfer of the property would only be effected upon payment being made, having scrutinized both the Particulars of claim and the Deed of sale, there is nowhere where I find reference being made that payment and the transfer are incidental to one another. I therefore am of the view that there is no such an implicit or explicit expression in the agreement. I may further add that the plaintiffs even failed to discharge the requirements regarding the facts upon which such implied terms are found. Moreover, the plaintiffs’ interpretation of Clause 7, being the supposed basis on which the implied term is alleged, was also rejected by the SCA. Accordingly, I find that contrary to the plaintiffs’ suggestion, there is no factual basis upon which such implied term is found in the agreement. It is my view therefore that the alleged implied term that payment and transfer coincide is not applicable in casu.

[39]	With regard to the second exception, namely, whether there is a reciprocal obligation from both parties to demand payment, I am of the view that it cannot be so since the plaintiffs’ performance date was fixed and not the first defendant’s. I am therefore satisfied that indeed payment must first occur before transfer is effected and that this does not in itself give rise to a reciprocal ‘obligation’ on the part of the parties.

[40]	Mr Van Riedt concedes that the legal principle that a creditor should not benefit out of his own inaction is trite. Given the fact that I have found against his suggested exceptions, I am of the view that everything else becomes moot. On the whole I am satisfied

[41]	It is common cause that the facts in Phasha supra are similar to the ones in casu and the court found in favour of the debtor (that would have been the first defendant in this matter). Contrary to what this court is invited to do, that is to make a finding in respect of whether the plaintiffs’ delay squared-off with the first defendant’s alleged one in line with Professor Loubser’s Publication, I find that my finding in this regard would be moot. The reason for same is due to the fact that in his own submission, Mr Van Riedt submitted that almost every decision, for a period spanning over 30 years, our courts, including the Constitutional Court, have applied and relied on an established principle that a creditor cannot delay prescription through his own inaction at the debtor’s expense. The burden of delay, for lack of a better term, have been laid squarely on the shoulders of the creditor and not the debtor. Moreover, even when it relates to the passages from Professor Loubser’s book Mr Van Riedt relied on and thus referred this court to, he submitted that the Constitutional Court never relied on them in its reasons for judgement.

[42]	Taking into account the conspectus of the facts before me, I am inclined to lean on the approach adopted by the SCA in Uitenhage Municipality v Molloy 1998 (2) SA 735. I find that in casu it is the plaintiffs who had the right to determine when performance shall be made and that in considering policy, the principle that it would be undesirable of the creditor to be in a position to defer the running of performance indefinitely by merely refraining from making a demand could not be truer.

[43]	Based on the above, I am of the view that it would be disingenuous of this court to try and re-invent the wheel over an issue which a trite principle already established and applied by our courts, including the Constitutional Court. Furthermore, when considers the ratio held by the SCA regarding policy considerations in the matter of Santam Ltd v Ethwar [1999] 1 All SA 252 (A), unless the purposes of the Prescription Act were jealously safeguarded, a debtor would never have the benefit and certainty of being protected from old claims.

[44]	I am therefore persuaded that based on the reasons espoused above, the plaintiffs’ action ought to fail. This conclusion is arrived at even after having considered the Lambrecht v Lyttleton Township (Pty) Ltd 1948 (4) SA 526 (T), which, by the way, I find to be irrelevant based on the fact that, inter alia, it is based on the old Act and the fact that in the Phasha decision, it was found not to be applicable anymore.

[45]	I am of the view that the plaintiffs’ counsel failed to advance reasons as to why I should find that the underlying legal principle should not find application in this matter. I equally do not share his view that there is no direct law applicable to the facts before me.

[46]	In casu, it is common cause that the plaintiffs by their own conduct, have failed to make good on the payment of the purchase price for a period of almost 9 years. I am of the view that not only have their claim prescribed, but policy considerations referred to above justify such a finding.

[47]	In the result I am satisfied that the plaintiffs’ claim ought to be dismissed.

COSTS

[47]	Regarding the issue of costs, counsel for the first defendant prayed for a costs order against the plaintiffs, including fair reasonable costs of travelling and disbursements, subsistence in respect of the first defendant’s attorney and counsel from Pretoria to Kimberly on a High Court scale. Regarding the costs in respect of the urgent application reserved as per the court order dated 27 July 2016, he asked that same be awarded to the successful party.

[48]	Mr Van Riedt for the plaintiffs did not address me in this regard, save for the prayed costs order in the Particulars of claim.

[49]	I am of the view that costs should follow the result.

CONCLUSION

[50]	In the premises, I make the following order:

ORDER
1.	The Special Plea of Prescription is upheld with costs, including fair reasonable costs of travelling and disbursements, and subsistence, in respect of the first defendant’s attorney and counsel from Pretoria to Kimberly, on a High Court scale.
2.	The costs in respect of the urgent application are awarded to the first defendant on terms similar to Order no. 1 supra.

Livhuwani Vuma
Acting Judge Northern Cape High Court

Appearances
For Applicants: Adv. R. Van Riedt
Instructed by: Duncan & Rothman Inc.
For 1st Respondent: Adv. B. Boot
Instructed by: Weavind & WeavindInc.
For 2nd Respondent: No appearance