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Republic of South Africa

IN THE HIGH COURT OF SOUTH AFRICA

(WESTERN CAPE HIGH COURT, CAPE TOWN)

Case No: 20169/2008

Before: The Hon. Mr Justice Binns-Ward

In the matter between:

NOMBUSO ANGELINE NDITHA ...................................................................................Plaintiff

and

Z ARIEFDIEN ATTORNEYS ........................................................................................Defendant

JUDGMENT DELIVERED: 5 DECEMBER 2012

BINNS-WARD J:

[1] The plaintiff, who is a described in the particulars of claim as ‘an adult female char’, was injured in a motor vehicle collision in the Eastern Cape on 24 May 1998. She instructed attorneys to recover compensation from the Road Accident Fund in respect of the damages she had sustained as a consequence of her injuries. It is apparent from the documents referred to in the evidence that she must have approached attorneys SA Solomons and Associates in this connection no later than 11 April 2000. On 25 January 2001, the plaintiff executed a special power of attorney authorising ‘Solomons and Associates and/or Z Ariefdien Attorneys’ to do everything necessary to finalise her claim for compensation.¹ The plaintiffs daughter, Cynthia Nditha, who signed the special power of attorney as a witness, assisted her mother in dealing with the attorneys.

[2] In terms of s23 of the Road Accident Fund Act 56 of 1996, as it read prior to amendment in terms of Act 19 of 2005, the plaintiff’s claim had to be lodged, in terms of s 24 of the Act, within three years of the date of the collision, that is by 23 May 2001, and any action necessary thereafter to enforce the claim had to be instituted within five years of the date of collision, that is by 23 May 2003. There was no evidence to that effect, but it appears from a copy of a report subsequently submitted to the Cape Law Society by Ms Ariefdien of Z. Ariefdien Attorneys which was put in evidence that a claim was lodged on 6 February 2001. The report also suggests that various exchanges concerning the claim subsequently occurred between the Road Accident Fund and the plaintiffs attorneys, which led to a settlement offer being received by the attorneys in March 2003. The report states that the plaintiff rejected the offer. The report indicated that the attorneys were thereafter informed by the Fund, on 9 July 2003, that it was repudiating the claim because it had been extinguished by prescription.

[3] In the current proceedings the plaintiff has sued to recover damages from Z. Ariefdien Attorneys for having allowed her claim to prescribe. The action is founded on an alleged breach of mandate, alternatively on professional negligence. The factual basis for the claim against the defendant is the attorneys⁵ failure to serve summons commencing action against the Road Accident Fund before the claim prescribed. The defendant has raised a special plea of prescription. At the request of the parties, a ruling was made at the commencement of the trial directing that the special plea be tried and determined before and separately from the remaining issues in the action.

[4] The debt in issue is one within the meaning of s 11 (d) of the Prescription Act 68 of 1969 and was thus susceptible to extinction by prescription after three years. Section 12(1) of the Act provides that prescription begins to run as soon as the debt is due. Section 12(3) provides 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’.

[5] The evidence established that the plaintiff and her daughter were dissatisfied with the information they were receiving from the defendant in respect of the prosecution of the claim. They consequently lodged a complaint with the Law Society on 12 November 2003. The complaint was made after the plaintiff and her daughter had visited the offices of the Road Accident Fund to enquire about the claim. Ms Cynthia Nditha testified that a person at

Fund’s offices informed her and the plaintiff that the claim had been ‘frozen’ and suggested that they refer the matter to the Law Society.

[6] It is apparent that the Law Society investigated the complaint. The Law Society called for a response to complaint from the defendant. The defendant’s response, which is the report referred to earlier, was furnished to the plaintiff under cover of a letter from the Law Society, dated 25 November 2004. As mentioned, it reported that the Fund had repudiated the claim in July 2003 on account of it having prescribed.

[7] The indications are that there were further exchanges between the plaintiff, apparently represented in this regard by her daughter, and the Law Society. The Law Society had, in particular, requested the plaintiffs comments on the defendant’s report. These were requested in the letter of 25 November 2004 and, it would appear, also in a follow up letter, dated 26 January 2005. Ms Cynthia Nditha testified to having received a further letter from the Law Society, dated 15 August 2005, which, according to its tenor, had been written in reaction to a telephone call by Ms Nditha to the Law Society on 12 August 2005. The letter, addressed to the plaintiff, stated, amongst other things, Tt is very clear from attorney Ariefdien’s report that your claim prescribed in July 2003. Whether this occurred as a result of negligence on the part of the attorney in question has not yet been determined.’ The Law Society pointed out in the letter that if the attorney had been negligent and the plaintiff had suffered damages as a consequence thereof she would be entitled to claim compensation from the attorney. The Society recommended that she should consult an attorney of her choice to obtain advice with regard to her rights and remedies.

[8] The plaintiff thereafter consulted attorney Colette Julyan, her attorney of record in the action, on 6 September 2005. She was accompanied to the consultation by her son, Patrick. An envelope containing what the plaintiff and her children considered to be relevant documentation was handed to Ms Julyan at this consultation. Included in the documentation was the Law Society’s aforementioned letter of 15 August 2005. Ms Julyan requested further information from the Law Society, as a result of which she was provided with a copy of the report made by defendant to the Law Society in response to the plaintiffs complaint. That happened only in February 2006. For reasons that were not disclosed, the action against the defendant was instituted only in December 2008, more than five years after the plaintiffs claim against the Road Accident Fund had been allowed to prescribe.

[9] It is clear that the debt in issue arose on 24 May 2003 and would have prescribed in May 2006 unless the provisions of s 12(3) of the Prescription Act came to the plaintiffs aid. It is important to appreciate in this connection that s 12(3) ‘requires knowledge only of the

material facts from which the debt arises for the prescriptive period to begin running - it does not require knowledge of the relevant legal conclusions (ie that the known facts constitute negligence) or of the existence of an expert opinion which supports such conclusions’ (Truter and Another v Deysel [2006] ZASCA 16; 2006 (4) SA 168 (SCA), at para. 20). That consideration falls to be understood in the context of Olivier JA’s explanation of the operation of s 12(3) in Drennan Maud & Partners v Pennington Town Board [1998] ZASCA 29; 1998 (3) SA 200 (SCA), at 209F-G:

Section 12(3) of the Act provides that a creditor shall be deemed to have the required knowledge if he could have acquired it by exercising reasonable care. In my view the requirement exercising reasonable care requires diligence not only in the ascertainment of the facts underlying the debt, but also in relation to the evaluation and significance of those facts. This means that the creditor is deemed to have the requisite knowledge if a reasonable person in his position would have deduced the identity of the debtor and the facts from which the debt arises.

and that by Mthiyane JA in Leketi v Tladi NO and Others [2010] 3 All SA 519 (SCA), at para. 18:

It seems to me that the adverse operation of s 12(3) is not dependent upon a creditor's subjective evaluation of the presence or absence of knowledge or minimum facts sufficient for the institution of a claim. In terms of s 12(3) of the Prescription Act, the deemed knowledge imputed to the creditor requires the application of an objective standard rather than a subjective one. In order to determine whether the appellant exercised reasonable care, his conduct must be tested by reference to the steps which a reasonable person in his or her position would have taken to acquire [the requisite] knowledge...

See also Gunase v Anirudh 2012 (2) SA 398 (SCA), at para.s 14 and 15 and Claasen v Bester 2012 (2) SA 404 (SCA), at para.s 13-15, as well as the other authority there referred to.

[10] It is conceded that the aforementioned correspondence, notably the Law Society’s letters of November 2004 and August 2005, was received by the plaintiff shortly after the dates upon which the letters were written. It is thus evident that the plaintiff had been informed in or about November 2004 that her claim been repudiated by the Fund in July 2003 on the grounds that it had been extinguished by prescription. She was also aware that at the relevant time the defendant had been under instruction to secure the recovery of compensation for her from the Fund and had been under a resultant obligation to pursue the claim effectively. She was therefore in possession of the material facts on which her claim was based. It is true that she might not have appreciated the relevant legal conclusions or have become aware of the full extent of her legal rights at that stage, but, as the authorities to which I have referred explain, that did not delay the commencement of the running of prescription.

[11] The inexorable conclusion, in my judgment, is that the plaintiffs claim against the defendant was thus extinguished by prescription at or about the end of November 2007, three years after the plaintiffs receipt of the Law Society’s letter of 25 November 2004, or, at the very latest, in or about August 2008; in any event well before the institution of the action in December 2008.

[12] When confronted with the aforementioned conclusion during argument, the plaintiffs counsel sought to fall back on s 12(2) of the Prescription Act. That provision is to the effect that if the debtor wilfully prevents the creditor from coming to know of the existence of the debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt. A reliance on s 12(2) was not pleaded by the plaintiff, and it would in any event have been futile. Whatever might have been the defendant’s conduct prior to November 2004, nothing in its conduct from the time its report to the Law Society was made available to the plaintiff prevented the plaintiff from becoming aware of the debt.

[13] In the result the special plea is upheld and the action is consequently dismissed with costs.

A.G. BINNS-WARD

Judge of the High Court

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