Fluxmans Incorporated v Levenson (523/2015) [2016] ZASCA 183; [2017] 1 All SA 313 (SCA); 2017 (2) SA 520 (SCA) (29 November 2016)

Fluxmans Incorporated v Levenson (523/2015) [2016] ZASCA 183; [2017] 1 All SA 313 (SCA); 2017 (2) SA 520 (SCA) (29 November 2016)

The majority of the Supreme Court of Appeal held that prescription begins to run when the creditor has knowledge of the facts necessary to institute action, not when the creditor becomes aware of the legal invalidity of the agreement. The respondent knew all the material facts regarding the contingency fee agreement and the payment of fees by 20 August 2008, even if he did not appreciate the legal consequences. The knowledge that the agreement did not comply with the Contingency Fees Act is a legal conclusion, not a fact required to complete the cause of action. Therefore, the respondent's claim became prescribed three years after payment, and his subsequent discovery of the legal...

Citation
[2016] ZASCA 183
Parties
Appellant: Fluxmans Incorporated; Respondent: Levenson Steven Zulla
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 November 2016
Case Number
523/2015
Procedural Posture
Civil Appeal / Appeal From Gauteng Local Division, High Court, Johannesburg
Outcome
Appeal upheld; respondent's claim held to be prescribed.
Judges
Mpati, Theron, Zondi, Van Der Merwe, Makgoka
Legal Topics
Prescription Act, Contingency Fees Act, Invalid Contract, Condictio Ob Turpem Vel Iniustam Causam, Enrichment Claim, Special Plea of Prescription
Civil Procedure Commercial and Corporate Prescription Act Contingency Fees Act Invalid Contract Condictio Ob Turpem Vel Iniustam Causam Enrichment Claim Special Plea of Prescription

Case Brief

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Parties

Fluxmans Incorporated

Appellant

Levenson Steven Zulla

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Local Division, High Court, Johannesburg

Legal Issues

  1. 1 Whether the respondent's claim for repayment of fees paid under an invalid contingency fee agreement had become prescribed.
  2. 2 Whether knowledge of the invalidity of the agreement is required for prescription to commence running under s 12(3) of the Prescription Act.
  3. 3 Whether the respondent had knowledge of the facts necessary to institute action before February 2014.

Ratio Decidendi

The majority of the Supreme Court of Appeal held that prescription begins to run when the creditor has knowledge of the facts necessary to institute action, not when the creditor becomes aware of the legal invalidity of the agreement. The respondent knew all the material facts regarding the contingency fee agreement and the payment of fees by 20 August 2008, even if he did not appreciate the legal consequences. The knowledge that the agreement did not comply with the Contingency Fees Act is a legal conclusion, not a fact required to complete the cause of action. Therefore, the respondent's claim became prescribed three years after payment, and his subsequent discovery of the legal...

Court Disposition

Appeal upheld; respondent's claim held to be prescribed.

Orders

  • The appeal is upheld with costs.
  • The order of the High Court is set aside and replaced with: 'The respondent's special plea of prescription is upheld with costs.'