- February 8, 2023
- |Concise Law Reports (CLR), Legislation
Shooya v Shambo NAHCMD (8 February 2023)
The plaintiff sued on a breach of contract involving the sale of a motor vehicle. The plaintiff alleged that the defendant failed to deliver the motor vehicle on 22 May 2019 in terms of the agreement. On his own version, in his pleading in the particulars of claim, the plaintiff said that because of the defendant’s failure to deliver the motor vehicle, the ‘plaintiff verbally cancelled the agreement on or about 24 May 2019 and demanded a refund from (the) defendant’.
The defendant raised a special plea of prescription that the plaintiff’s claim had prescribed in terms of the Prescription Act 68 of 1969, as summons was delivered to the defendant on 19 June 2022, more than three years after the claim arose on 24 May 2019 when the plaintiff orally cancelled the agreement upon the defendant’s repudiation of the agreement. The plaintiff elected to accept the repudiation and communicated his acceptance of the repudiation to the defendant on that date. The crisp response of the plaintiff to the special plea of prescription was couched in the following terms: The ‘plaintiff’s cause of action arose at the time when he communicated his intention to cancel the agreement to the defendant on the 12th of July 2021 and not on the 22nd of May 2019, when defendant breached the agreement’. Alternatively, the debt only became due on 12 July 2021. Consequently, the ‘plaintiff’s claim will only become prescribed on 11 July 2024’
PARKER AJ had to determine the special plea of prescription. The first aspect to consider is naturally to determine when the debt became due, within the meaning of section 12 of the Act. One important requirement has been settled in this passage; and the parties do not dispute it:
‘It is settled law that repudiation of a contract occurs where one party to a contract, without lawful grounds, indicates to the other party, whether by words or conduct, a deliberate and unequivocal intention to no longer be bound by the contract. Then the innocent party will be entitled to either: (i) reject the repudiation and claim specific performance; or (ii) accept the repudiation, cancel the contract, and claim damages. If he or she elects to accept the repudiation, the contract comes to an end upon the communication of the acceptance of the repudiation to the party who has repudiated. Only then does a claim for damages arise. Accordingly, prescription commences to run from that date.’ (Dave Pretorius v Kenneth Bedwell [2022] ZASCA 4 (11 January 2022); applied by the court in Kaxuxuena v Hot Shoot Trading CC NAHCNLD 29 (28 March 2022).
‘[4] Upon the authority of Dave Pretorius v Kenneth Bedwell, I find on the pleadings that the agreement came to an end on 24 May 2019 upon the plaintiff’s communication to the defendant of the plaintiff’s acceptance of the defendant’s repudiation of the agreement. The plaintiff’s legal practitioners’ letter (dated 12 July 2021) was a reiteration of the plaintiff’s settled and categorical acceptance of the repudiation and cancellation of the agreement and communication of same to the defendant. Thus, the plaintiff crossed the Rubicon on 24 May 2019. It follows, as a matter of law that the contract came to an end on 24 May 2019; and so, it was on that date that the plaintiff’s claim arose. And therefore, prescription commenced to run on 24 May 2019.’ (Dave Pretorius v Kenneth Bedwell).
The court found that prescription commenced to run on 24 May 2019. But for the Regulations made under Proclamation 16 of 2020, suspending the running of prescription under any provision of Act 68 of 1969, the plaintiff’s claim would have expired on 23 May 2022. The court found that in terms of regulation 7(2) of the Regulations, the computation of the three-year period required to claim damages for debt in terms of Act 68 of 1969, section 11(d), resumed and commenced on 5 May 2020, after the expiry of the lockdown period on 4 May 2020. Having undertaken the computation of time in terms of regulation 7(2) of the Regulations, the court determined that the plaintiff’s claim prescribed on 30 June 2022. Since the defendant received the originating process on 19 June 2022, the plaintiff’s claim has not prescribed. It was held that:
- During the implementation of the Emergency Regulations, certain provisions of Act 68 of 1969 ceased to have legal force, including the provisions on the running of prescription in terms of that Act.
Consequently, the special plea of prescription was dismissed with costs