Bakgatla-Ba-Kgafela Strategic Investment Company (Pty) Ltd v Meneguzzo and Another (2103/2013) [2017] ZANWHC 44 (1 June 2017)

IN THE NORTH WEST HIGH COURT, MAFIKENG

CASE NO: 2103/2013

In the matter between:

BAKGATLA-BA-KGAFELA STRATEGIC

INVESTMENT COMPANY (PTY) LTD Plaintiff

and

ARMANDO MENEGUZZO 1st Defendant

MARCELLO MENEGUZZO 2nd Defendant

DATE OF HEARING: 22 MAY 2017

DATE OF JUDGMENT: 01 JUNE 2017

COUNSEL FOR THE APPLICANT: ADV. BECKERLING SC

with ADV. STEYN

COUNSEL FOR THE RESPONDENT: ADV. LIMBERIS SC

JUGDMENT

HENDRICKS J

Introduction

[1] The Plaintiff, a limited liability private company registered as such in South Africa, instituted an action on 16th October 2014 against the First and Second Defendants, who are respectively father and son. The Plaintiff claims three payments. The first claim is for a creditors loan in the amount of R2 787 760.37; the second claim is for an operational loan to the sum of R5 484 048.00; and the third claim is for a key-man payment to the sum of R1 000 000.00.

[2] These three claims are allegedly due pursuant to a Memorandum of Understanding, (MoU) as rectified, concluded between the Plaintiff

and the Defendants at Mogwase on the 15th August 2010. In the alternative, the Plaintiff allege that these claims are due pursuant to the MoU read together with a written loan agreement, as rectified. In the further alternative, it is alleged that the three claims (debts) are due by the Defendants pursuant to an e-mail agreement that was concluded between the Plaintiff and the Defendants. For purposes of this judgment it is not necessary to deal with these claims in much detail. The reason for this will become apparent later on in this judgment.

[3] The Defendants raised a special plea of prescription. In his special plea, the First Defendant alleged that the three debts claimed from him pursuant to the MoU, as rectified, had been extinguished by prescription by virtue of the provisions of Section 11 read with Sections 10 and 12 of the Prescription Act 68 of 1969. The three claims became due on the 15th February 2011 and the action was instituted on the 16th October 2014, after the expiry of three (3) years. Furthermore, that part of the three debts claimed in pursuance to the MoU, as

rectified, read together with the loan agreement, as rectified, which had arisen prior to 16th October 2014 had been extinguished by prescription for the same reason. The same special plea of prescription was also raised with

regard to the further alternative claim based on the e-mail agreement, as rectified, since the Plaintiff alleged that the three

debts became due on the 7th February 2011 and the action was instituted after the lapse of a three (3) year period.

[4] The Plaintiff filed a replication in which it denied that any of its claims had been extinguished by prescription. It pleaded that the completion of prescription was delayed and it remains delayed by virtue of the provisions of Section 13 (1) (b) of the Prescription Act because both Defendants are outside the Republic of South Africa.

[5] The First Defendant filed a rejoinder in which he averred that he was permanently resident in Italy at all material times and that the provisions of Section 13 (1) (b) of the Prescription Act are not applicable to him since it apply only to a resident of the Republic of South Africa who is temporarily outside the Republic of South Africa and who is expected to return to the Republic of South Africa. In answer to this, the Plaintiff filed a sur-rejoinder in which it alleged that Section 13 (1) (b) of the Prescription Act applies to a debtor who is outside the Republic of South Africa.

[6] At the inception of the hearing of this matter, the parties agreed to separate the issue of prescription from the remaining issues in dispute. A draft consent order was prepared in the following terms:

6.1 The issue of prescription is separated from the remaining issues

in dispute between the parties;

6.2 The issue of prescription is to be dealt with separately from and

prior to the remaining issues in dispute between the parties;

6.3 The hearing on the remaining issues in dispute is stayed pending the determination of the issue of prescription.

An order was granted in the aforementioned terms and arguments were presented only on the issue of prescription.

Common Cause Facts

[7] It is common cause between the parties, alternatively not seriously disputed, that both Defendants are peregrini to the Republic of South Africa. The First Defendant is resident in Italy and the Second Respondent is resident and employed in Namibia. The Defendants consented to the jurisdiction of this Court in terms of the MoU and the loan agreement, as rectified. The debts became due in terms of the MoU and the loan agreement, as rectified, on 15th February 2011. The citation and the intendit was served on the Second Defendant in Namibia on 25th February 2014. He has not resided in the Republic of South Africa since August 2011. The first Defendant is permanently resident in Italy and the citation and intendit was served on him in Italy on 16th October 2014.

[8] Mr Beckerling on behalf of the Plaintiff conceded that the main claim against the First Defendant based on the MoU has been extinguished by prescription. Furthermore, was it also conceded that part of the first alternative claim for payment pursuant to the MoU read with the loan agreement has been extinguished by prescription.

[9] The Defendants in their special pleas contended that like the main and first alternative claims, the e-mail agreement has also been extinguished by prescription. In the case of the First Defendant, the e-mail agreement as rectified, became due on 07th February 2011 and the action was instituted after the expiry of three (3) years because summons was served on 16th October 2014. As far as the Second Defendant is concerned, the action was instituted on 25th February 2014, also after the expiry of three (3) years.

[10] In answer to this, the Plaintiff contended that Section 13 (1) (b) of the Prescription Act finds application in that both Defendants were outside the Republic of South Africa. This being the case, the running of prescription was delayed until they ceased to be outside the Republic of South Africa. The issue to be determined by this Court is whether the further alternative claim against the First and Second Defendants based on the e-mail agreement has been extinguished by prescription.

[11] To put it differently, the issue for determination is whether section 13 (1) (b) of the Prescription Act finds application in the present matter and if so whether: -

· as contended for by the defendants, section 13 (1) (b) of the Prescription Act only apply to a resident of the Republic of South Africa who is temporarily outside the Republic and who is expected to return to the Republic; or

· as contended for by the plaintiff, section 13(1)(b) indeed applies to a debtor (the defendants) that is outside the Republic.

[12] It is therefore necessary to examine the e-mail agreement closely. It is common cause that this agreement does exist between the parties. Furthermore, there was also correspondence exchanged between the two sets of attorneys. On 29th August 2014 the Plaintiff’s attorneys of record send an e-mail to the Defendant’s attorneys stating:

“Dear Jonathan

Thank you for your email, and the draft affidavit.

We are not prepared to withdraw the application for summary judgment, and ask that you file the final, signed affidavit accordingly.

There seems to be some confusion as to whether the summons was actually served on Armando Meneguzzo; the return of service which we have from the sheriff reflects that it was served on him. Should this not be the case, please advise whether you are prepared to accept service on his behalf.

Should you not be willing to do so, in which event it will be necessary for us to seek leave of the court to serve on him in Italy, we confirm that we will seek a punitive costs order against your client for this application, as you are clearly able to accept service of the summons on his behalf, and he is patently aware of the pending action against him.

Regards”

(emphasis added)

[13] On 14th September 2014 the Defendants attorney replied with the following e-mail addressed to Plaintiff’s attorneys:

“ARMANDO & MARCELLO M ENEGUZZO / BAKGATLA-BA-KGAFELA STRATEGIC INVESTMENT COMPANY (PTY) LTD

CASE NO: 2103/2013

1. We refer to your client's application for summary judgement

postponed to 18 September 2014.

2. Attached is our client affidavit resisting summary judgement

which has been sent to our correspondent attorneys for service and filing.

3. We submit that the affidavit discloses a defence and is sufficient

to overcome summary judgement. Please therefore confirm that the application is to be withdrawn with costs reserved and that your client will agree for the court to grant our clients leave to defend.

4. Alternatively, please advise whether your client intends to

proceed with the application, in which event we request that the matter be postponed for argument to a date suitable to both parties' counsel.

5. We have advised our client Armando Meneguzzo of your

client's request that we accept service of the indendit at our offices. We are awaiting Mr Meneguzzo's instructions and will revert in due course.”

(emphasis added)

It is common cause between the parties that Defendant’s attorneys (and so too the Defendants), never reverted to Plaintiff’s

attorneys as promised. They never consented to the request that they will accept service of the intendit at their offices.

The Law

[14] Central to the determination of the issue at hand is the prescript of the Prescription Act 68 of 1969. The relevant provisions of this Act reads as follows:

“10. Extinction of debts by prescription. - (I) Subject to the provisions of this Chapter and of Chapter IV, a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant law applies in respect of the prescription of such debt. …”

"11. Periods of prescription of debts. - The periods of prescription of debts shall be the following:

(a) …

(b) …

(c) …

(d) save where an Act of Parliament provides otherwise, three years in respect of any other debt."

"12. When prescription begins to run. - (1) Subject to the provisions of subsections (2) and (3), prescription shall commence to run as soon as the debt is due.

…”

13. Completion of prescription delayed in certain circumstances. - (1) If-

(a) the creditor is a minor/or is insane or is a person under curatorship or is prevented by superior force including any law or any order of court from interrupting the running of prescription as contemplated in section 15(1); or

(b) the debtor is outside the Republic; or

(c) the creditor and debtor are married to each other; or

(d) the creditor and debtor are partners and the debt is a debt which arose out of the partnership relationship; or

(e) the creditor is a juristic person and the debtor is a member of the governing body of such juristic person; or

(f) the debt is the object of a dispute subjected to arbitration; or

(g) the debt is the object of a claim filed against the estate of a debtor who is deceased or against the insolvent estate of the debtor or against a company in liquidation or against an applicant under the Agricultural Credit Act, 1966 (Act No. 28 of 1966); or

(h) the creditor or the debtor is deceased and an executor of the estate in question has not yet been appointed; and

(i) the relevant period of prescription would, but for the provisions of this subsection, be completed before or on, or within one year after, the day on which the relevant impediment referred to in paragraph (1), (b), (c), (d), (e), (f), (g) or (h) has ceased to exist,

the period of prescription shall not be completed before a year has elapsed after the day referred to in paragraph (i).

…”

"15. Judicial interruption of prescription. - (1) The running of prescription shall, subject to the provisions of subsection (2), be interrupted by the service on the debtor of any process whereby the creditor claims payment of the debt.

(2) …”

[15] In Extinctive Prescription by M.M Loubser the following is stated by the learned author under the heading “The Policy Considerations Underlining Extinctive Prescription” on page 24:

“In summary: the law of extinctive prescription is meant (1) to ensure protection and fairness to the debtor-defendant; (2) to enhance the effectiveness and efficiency of the courts; (3) to promote societal stability; and (4) generally to achieve legal certainty and finality in the relationship between debtor and creditor. Extinctive prescription primarily serves the interests of the debtor, who becomes exempt from performance, while judicial economy and the smooth functioning of the legal system are also served because parties are obliged to bring their disputes to the courts without undue delay, so that they can be effectively resolved. Extinctive prescription to some extent also serves the interests of the creditor, who benefits from certain knowledge of the time after which it would be futile to institute action against the debtor. Extinctive prescription ensures that there comes a time between a creditor and a debtor when the books are closed.”

[16] It is necessary to have due regard to the relevant case law dealing with this section in the Prescription Act and its predecessor. In Grinaker Mechanicals (Pty) Ltd v Societe Francaise Industriale et D' Equipment 1976 (4) SA 98 (C) the following appears in the headnote:

“Having regard to the provisions of section 10 of the Prescription Act, 18 of 1943, the periods of extinctive prescription prescribed in section 3 (2) of the Act do not operate in favour of a peregrine company that has never been present in the Republic of South Africa.

There is nothing in the wording of section 10 of the Prescription Act, 18 of 1943, to justify the conclusion that the Legislature intended to confer the benefit of prescription upon a debtor who, despite his continued absence from the Republic, became amenable to be sued in respect of his debt in a Court of the Republic (as a result of his property having been attached ad fundandam jurisdictionem).”

Section 10 of that Act reads as follows: -

"When the debtor is absent from the Union (Republic of South Africa) extinctive prescription shall not begin to run until the date of his return."

Having considered the meaning of the word "return" in section 10 the Court held as follows on page 102 E-H:

"It would seem to be unhelpful to confuse the question of the amenability of a peregrine debtor to the jurisdiction of a Republican Court with the question of when extinctive prescription begins to run against a peregrine debtor who is absent from the Republic. It is with the latter and not the former enquiry with which the Court is concerned. It is fundamental to such an enquiry to ascertain upon a proper construction of sec. 10 of Act 18 of 1943 when such prescription begins to run against such a debtor. There is nothing in the wording, of sec. 10 to justify the conclusion that the Legislature intended to confer the benefit of prescription upon a debtor who, despite his continued absence from the Republic, became amenable to be sued in respect of his debt in a Republican Court. If that was the intention of the Legislature it certainly has not been made apparent in the terms of sec 10.

It may be thought to be anomalous that a company debtor resident outside the Republic could, in general, never enjoy the benefit of prescription since it is but rarely likely to cease to be absent from the Republic. This, however, cannot be said of a debtor who is a natural person and who therefore could very readily cease to be absent from the Republic. Sec. 10, however, draws no distinction between these two types of debtor and the section cannot be criticised on the ground that its provisions in all respects result in an anomalous position. In any event I entertain some doubt as to whether it could be described as anomalous for the Legislature to withhold the protection of prescription from a debtor who never ceases to be absent from the Republic. The Legislature, one would assume, would be to more astute to favour an incola rather than a Peregrinus.”

[17] In Dithaba Platinum (Pty) Ltd v Erconovaal Ltd and Another 1985 (4) SA 615 (T), the applicant was a present holder of a right of first refusal in respect of minerals. It sought an order against the respondents for the cession to it of such rights against payment of the book value thereof. The first respondent was a South African company. It was also a wholly-owned subsidiary of the second respondent. The second respondent, was an external company and was registered as such in South Africa (under the provisions of the 1973 Companies Act).

A defence of prescription was raised. The Court held that prescription began to run from the date on which the second respondent sold the assets to the first respondent and not, as contended by the applicant, when the applicant's right of first refusal was

specifically rejected: the fact furthermore that the second respondent was an external company registered in South Africa did not

mean that the debtor was outside the Republic as envisaged by section 13(1) (b) of the Prescription Act 68 of 1969 and that the running of prescription was thereby delayed and accordingly, that the claim had become prescribed as against the second respondent but not against the first respondent The Court reasoned as follows in page 631 G – 632 C:

"The crisp issue is thus whether the second respondent, as an external company, qualifies for the description of a "debtor... outside the Republic". It is common cause that the second respondent is "a company registered with limited liability in terms of the company laws of England… but also registered as an external company in terms of the company laws of the Republic of South Africa... having chosen as its registered office for such purpose 1st Floor, Afex House, 58 Marshall Street, Johannesburg, and carrying on business as a finance company".

…

In my view, the consequence of the registration of its memorandum in South Africa is that the second respondent became a body corporate in the Republic. That is the plain and unambiguous conclusion to be drawn from s 323 (1). As such, it cannot be said to be a "debtor... outside the Republic". It is on this simple basis that I hold that s 13 (1) (b) of the Prescription Act cannot be invoked to delay the ordinary running of prescription in favour of the second respondent. It is the operation of s 323 (1) of the Companies Act which in my view distinguishes the present case from the decision in Grinaker Mechanicals (Pty) Ltd v Societe Francaise Industriale at d'Equipment 1976 (4) SA 98 (C). Consequently, I am of the view that the applicant's claim as against the second respondent (but, of course, not the first respondent) has become prescribed."

[18] In Owner of the MV Maritime Prosperity v Owner of the MV Lash

Atlantico 1996 (1) SA 22 (AD) the ships of two peregrine of the Court collided near Egypt damaging both ships. The applicant thereafter caused an arrest

of the respondent's ship in the Durban harbour. A defence of prescription was relied upon by the respondent with the applicant

contending that in terms of section 13(1) (b) of the Act prescription was delayed.

The Court held that section 13(1) (b) of the Act applied to actions

in personam and that there was therefore no legal obstacle to the applicant's reliance upon section 13(1) (b) to overcome the consequences of the running of the two-year prescriptive period (in terms of section 344 of the Maritime Shipping Act, 57 of 1951) and that prima facie the objection to the security arrest of the respondent's ship on the grounds of extinctive prescription was not well founded. The question was not finally decided on the facts of the matter. The Court held as follows on page 33 F – I:

“For these reasons I hold that s 344 (3) must be construed as being confined in its application to actions in rem. Counsel for appellant conceded that, in the event of this Court making such a finding, the appeal had to fail. This concession was correctly made. If s 344 (3) applies only to actions in rem then there can be no inconsistency between that subsection and s 13 (1) (b) of the Prescription Act as far as actions in personam are concerned. It was common cause that Coastal's contemplated claim-in-reconvention would constitute a proceeding in personam. Ergo there is no legal obstacle to Coastal's reliance upon s 13 (1) (b) to overcome the consequences of the running of the two-year prescriptive period. Prima facie, therefore, Rosario's objection to the security arrest of the Maritime Prosperity on the grounds of extinctive prescription is not well founded. Consequently the Court a quo correctly confirmed the arrest insofar as it relates to an action in personam.

I should perhaps add that in the circumstances it is not necessary to decide the question whether, assuming s 344 (3) to apply to actions in personam as well, there is necessarily an inconsistency between s 13 (1) (b) and s 344 (3), read with s 344 (1). Nor is it necessary to pronounce finally on the applicability of s 13 (1) (b) to the facts of this case. Both questions are left open.”

[19] In Silhouette Investments LTD v Virgin Hotels Group LTD 2009 (4) SA 617 (SCA) the following was stated:

“Discussion

(i) Was the respondent 'outside the Republic' in terms of s 13 (1) (b)?

[31] As appears from s 13 read as a whole the fact that a debtor is outside the Republic (as a result of which the completion of prescription is delayed) is regarded by the legislature as an ‘impediment'. The various impediments listed in s 13 (1) are circumstances which, as Professor MM Loubser puts it in his work Extinctive Prescription at 117, ‘have in common some legal or practical problem which makes it difficult or undesirable for a creditor to institute proceedings for the enforcement of his claim against the debtor'. See also ABP 4x4 Motor Dealers (Pty) Ltd V IGI Insurance Co Ltd 1999 (3) SA 924 (SCA) at 930I-931A, where it was said that-

‘(t)he word impediment … covers a wide spectrum of situations ranging from those in which it would not be possible in law for the creditor to sue to those in which it might be difficult or awkward, but not impossible, to sue.’

Where, as in the present case, the debtor has not only consented to the jurisdiction of the South African court but also agreed to accept service of process, care of its South African attorneys, there no circumstance which gives rise to a problem which creates a difficult of undesirable situation for a creditor seeking to institute legal proceedings against the debtor in this country. Is it likely that Parliament would have intended the completion of prescription to be delayed in those circumstances? The only purpose that it would serve would be to prevent prescription from ever being completed against the respondent, which, as the respondent's counsel submitted, would lead to an absurd conclusion. It certainly would not advance the evident purpose of the provision, which is to assist a creditor which has a legal or practical problem in relation to the institution of legal proceedings in South Africa against its debtor

[32] I think that to interpret the phrase ‘outside the Republic’ as covering a case where, although the debtor itself is physically outside the Republic, it has consented to the jurisdiction of the South African courts in respect of a claim and has a representative here whom it has authorised to receive service on its behalf of any process in which the claim in question is sought to be enforced would give a meaning to the provision under consideration which Parliament could never have intended.

[35] The present case is of course stronger than the American cases to which I have referred because here it was possible for the appellant to serve the original summons on the respondent not by substituted service but by service on its own attorneys who were authorised to receive service on its behalf.

[41] It is not necessary, however, in this case to decide whether amenability to jurisdiction over the debtor personally in circumstances where a judgment can be given which can be enforced against him internationally will lead to the conclusion that he is not to be

regarded as 'outside the Republic' for the purposes of s 13 (1) (b) of the Act. I say that because I am satisfied that the combined

effect of the submission by the respondent to the court's jurisdiction and the authorisation to its attorneys to accept service

of the summons clearly leads to the conclusion, for the reasons I have stated, that it would go beyond the purpose of s 13 (1) (b) if it were held that the respondent in this matter, despite what it had done to remove any difficulty or awkwardness which the appellant might otherwise have encountered in an attempt to institute proceedings against it to claim the debt allegedly owing in this matter, was 'outside the Republic'. It follows that the first contention advanced by the appellant's counsel must fail.”

[20] In my view, the present case is clearly distinguishable. Unlike in the Silhouette case supra, the Defendants never consented to or was amenable to accept service of the summons at the offices of their attorneys of record in the Republic of South Africa. Infact, they never reverted to the request to accept same. On 14th September 2014 they promised to revert about this aspect, but to no avail. In the Silhouette case, the peregrine company Virgin Hotels Group LTD, which had consented to the jurisdiction of the Court and which had authorised its attorney in the Republic of South Africa to accept service of the process was found not to be “outside the Republic” within the meaning of Section 13 (1) (b) of the Prescription Act. This decision is unsurprising because the difficulty or impediment with regard to service was removed. Service of the process could quite easily have been effected at the offices of the attorney in the Republic of South Africa. Although what was stated in paragraph [41] of the Silhouette judgment was merely obiter, it is nevertheless a strong persuasive remark. This Court is bound to follow the presedent in the Silhouette judgment with particular reference to paragraph [41].

The Constitutional Dimension

[21] Mr. Limberis on behalf of the Defendants contended that there is a constitutional dimension to the interpretation of Section 13 (1) (b) of the Prescription Act. According to him, there is an ambiguity in Section 13 (1) (b) in that “debtor” should be narrowly interpreted to apply only to an incola who is temporarily outside the Republic of South Africa and who is expected to return to the Republic of South Africa and not to

peregrini because foreigners (peregrini) who trade within the Republic will be punished and denied their substantive right to raise extinctive prescription simply because

they are “outside the Republic”.

[22] Section 13 (1) (b), so it was contended, is ambiguous in the sense that it could be interpreted to apply only to an incola who is temporarily absent from the Republic and who intends to return to the Republic. Prescription would then be delayed during the incola's absence from the Republic and for a year after his return. The impediment would then be the difficulty in serving the process on

him/her whilst he/she was away. It could also mean that prescription will be delayed forever in the case of a foreign corporation or natural person who is outside the Republic and who does not intend ever to take up residence in the Republic. If this interpretation is applied, that person or entity will be deprived of his/her/its right to raise extinctive prescription as a defence without sufficient

justification therefor. It is self-evident that the latter interpretation is the one which better promotes the spirit, purport

and objects of the Bill of Rights as required by Section 39 (2) of the Constitution.

[23] Reference in this regard was made to the case of Arse v Minister of Home Affairs 2012 (4) SA 544 SCA at paragraph [10] where the following is stated:

“[10] …

In addition, s 39(2) of the Constitution requires courts when interpreting a statute that is reasonably capable of two interpretations to avoid an interpretation that would render the statute unconstitutional and to adopt the interpretation that would better promote the spirit, purport and objects of the Bill of Rights, even if neither interpretation would render the statute unconstitutional. The detention of the appellant is clearly in breach of the express provisions of s 34(1) (d) of the Immigration Act and is unlawful. Indeed Mr Semenya who appeared on behalf of the respondents quite properly conceded this during argument.”

[24] In Investigating Directorate: Serious Economic Offences and Others v Hyundai Motor Distributors (Pty) Ltd and Others 2001 SA 545 (CC) the following is stated:

“[21] Section 39(2) of the Constitution provides a guide to statutory interpretation under this constitutional order. It states:

'When interpreting any legislation, and when developing the common law or customary law, every court, tribunal or forum must promote the spirit, purport and objects of the Bill of Rights.'

This means that all statutes must be interpreted through the prism of the Bill of Rights. All law-making authority must be exercised in accordance with the Constitution. The Constitution is located in a history which involves a transition from a society based on division, injustice and exclusion from the democratic process to one which respects the dignity of all citizens, and includes all in the process of governance. As such, the process of interpreting the Constitution must recognise the context in which we find ourselves and the Constitution's goal of a society based on democratic values, social justice and fundamental human rights. This spirit of transition and transformation characterises the constitutional enterprise as a whole.

[23] In De Lange v Smuts NO and Others, Ackermann J stated that the principle of reading in conformity does

'no more than give expression to a sound principle of constitutional interpretation recognised by other open and democratic societies based on human dignity, equality and freedom such as, for example, the United States of America, Canada and Germany, whose constitutions, like our 1996 Constitution, contain no express provision to such effect. In my view, the same interpretative approach should be adopted under the 1996 Constitution.'

Accordingly, judicial officers must prefer interpretations of legislation that fall within constitutional bounds over those that do not, provided that such an interpretation can be reasonably ascribed to the section.”

[25] In Wary Holdings (Pty) Ltd V Stalwo (Pty) Ltd and another [2008] ZACC 12; 2009 (1) SA 337 (CC) the following is stated:

“[107] If a law is reasonably capable of two meanings, the question whether the one meaning better advances the constitutional project might raise a constitutional matter. It was contended in this case that the meaning sought to be given to the proviso by the applicant, the amici and the Minister would better promote the spirit, purport and objects of the Bill of Rights in that it would enable the State better to fulfil some of its constitutional obligations. I think the question whether the one interpretation is more in accordance with the spirit, purport and objects of the Constitution than the other does raise a constitutional matter. But the constitutional matter would be raised for decision only if the proviso is reasonably capable of having two meanings. This issue whether the proviso is reasonably capable of two meanings must be determined first, for if it is not, the constitutional question does not arise for decision. The question whether the proviso is reasonably capable of two constructions is therefore an issue connected with a decision on a constitutional matter and, in my view, we have the jurisdiction to decide it."

[26] Mr. Beckerling contended with reference to the Wary Holdings matter that at first there must be ambiguity in the legislation. He submitted that there is no ambiguity in the wording of Section 13 (1) (b) of the Prescription Act. He said that the wording of Section 13 (1) (b) is unambiguous, simple and straightforward. The word ‘debtor’ should be accorded its ordinary meaning nl. “one who is indebted to another”.

See: The Oxford English Dictionary. It does not matter , so it was contended, whether it is an incola or a peregrinus. If he is a debtor and he is outside the Republic of South Africa the completion of prescription is delayed in terms of the provision of Section 13 (1) (b) of the Prescription Act until he return to the Republic of South Africa and for a year thereafter.

[27] Mr. Beckerling further submitted that reference to the equality provisions in Section 9 of the Constitution of the Republic of South Africa, Act 106 of 1996 simply means that everyone is equal before the law irrespective whether (s)he is an incola or peregrinus. If (s)he is a debtor, (s)he must be treated the same as any other debtor. To do otherwise, amounts to discrimination. I fully agree

with this proposition. If the legislature wanted to treat a peregrinus different from an incola, it would have stated it in the Act.

See: Grinaker Mechanicals (Pty) Ltd, supra.

[28] The time periods insofar as it relates to the further alternative e-mail agreement are not in dispute. The net effect of this is that the claim in the further alternative e-mail agreement is not extinguish by prescription. The special plea insofar as this claim is concerned cannot succeed and should be dismissed.

[29] Insofar as costs are concerned, Mr. Limberis on behalf of the Defendants submitted that because of the concessions made by the Plaintiff with regard to the main claim and the first alternative claim, the Defendants are substantially successful and costs should be awarded in favour of the Defendants. Mr. Beckerling on behalf of the Plaintiff contended that both parties are to a certain extent successful. In particular is the Plaintiff successful in so far as the further alternative e-mail agreement claim is concerned and the appropriate order should be that costs be costs in the cause. I am of the view that this would be a sensible approach under the circumstances of this case.

ORDER

[30] Consequently, the following order is made:

(1) The Plaintiff’s main claim against the First Defendant based on the Memorandum of Understanding of 10th August 2010 for payment of the sums of R2 787 760.37; R5 484 048.00 and R1 000 000.00 has been extinguished by prescription.

(2) The Plaintiff’s alternative claim against the First Defendant for payment of the first six instalments which became due during the period 7th May 2011 to 07th October 2011 pursuant to the Memorandum of Understanding read with the loan agreement of 10th August 2010 has been extinguished by prescription.

(3) The special plea raised by the First Defendant against the Plaintiff’s further alternative claim for payment of the sums of R2 787 760.37; R5 484 048.00 and R1 000 000.00 based on the e-mail agreement of 28th July 2011 is dismissed.

(4) The special plea raised by the Second Defendant against the Plaintiff’s further alternative claim for payment of the sums of R2 787 760.37; R5 484 048.00; and R1 000 000.00 based on the e-mail agreement is dismissed.

(5) The costs of the special plea of prescription shall be costs in the cause.

______________________

R D HENDRICKS

JUDGE OF THE HIGH COURT,

NORTH WEST DIVISION, MAHIKENG