Botha v Iveco South Africa (Pty) Ltd (430/2011) [2012] ZASCA 78 (28 May 2012)

Botha v Iveco South Africa (Pty) Ltd (430/2011) [2012] ZASCA 78 (28 May 2012)

Prescription for the respondent's claim under the indemnity clause commenced running only when the respondent paid the municipality on 17 July 2007. The debt was not due and payable at the time the breach of warranty was discovered, but only after payment was made in terms of the indemnity clause. The respondent's summons was served within three years of payment, and therefore the claim was not prescribed. The high court erred in its reasoning by focusing on the breach of warranty rather than the indemnity clause as the true cause of action. The declaratory order regarding the commencement of prescription was incorrect and must be deleted. Costs of the appeal are to be awarded on the...

Citation
[2012] ZASCA 78
Parties
Appellant: Dirk Samuel Botha; Respondent: Iveco South Africa (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
28 May 2012
Case Number
430/2011
Procedural Posture
Civil Appeal / Appeal From Free State High Court, Bloemfontein
Outcome
Appeal dismissed with costs; paragraph 2 of the high court's order deleted.
Judges
Mthiyane, Cloete, Cachalia, Tshiqi, Ndita
Legal Topics
Prescription, Sale of Shares, Breach of Warranty, Indemnity Clause
Commercial and Corporate Prescription Sale of Shares Breach of Warranty Indemnity Clause

Case Brief

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Parties

Dirk Samuel Botha

Appellant

Iveco South Africa (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Free State High Court, Bloemfontein

Legal Issues

  1. 1 When does prescription commence running for a claim under an indemnity clause following breach of warranty in a sale of shares agreement.
  2. 2 Is the respondent's claim prescribed under the Prescription Act.
  3. 3 Does the indemnity clause entitle the respondent to recover costs on an attorney and own client scale for the appeal.

Ratio Decidendi

Prescription for the respondent's claim under the indemnity clause commenced running only when the respondent paid the municipality on 17 July 2007. The debt was not due and payable at the time the breach of warranty was discovered, but only after payment was made in terms of the indemnity clause. The respondent's summons was served within three years of payment, and therefore the claim was not prescribed. The high court erred in its reasoning by focusing on the breach of warranty rather than the indemnity clause as the true cause of action. The declaratory order regarding the commencement of prescription was incorrect and must be deleted. Costs of the appeal are to be awarded on the...

Court Disposition

Appeal dismissed with costs; paragraph 2 of the high court's order deleted.

Orders

  • Paragraph 2 of the order of the court a quo is deleted.
  • The appeal is dismissed with costs.