KLD Residential CC v Empire Earth Investments 17 (Pty) Ltd (9861/13, 16844/07) [2016] ZAWCHC 83; [2016] 3 All SA 832 (WCC); 2016 (5) SA 485 (WCC) (24 June 2016)

KLD Residential CC v Empire Earth Investments 17 (Pty) Ltd (9861/13, 16844/07) [2016] ZAWCHC 83; [2016] 3 All SA 832 (WCC); 2016 (5) SA 485 (WCC) (24 June 2016)

The court held that the Webber Wentzel letter was written without prejudice as part of settlement negotiations and thus protected by the without prejudice rule. The law does not recognize an exception allowing such communications to be used as acknowledgments interrupting prescription, either under South African or English law as at 31 May 1961. The acknowledgment of liability in the letter was not wholly unconnected to the settlement proposal and cannot be isolated from the protected communication. Therefore, the letter is inadmissible for the purpose of interrupting prescription, and KLD's commission claims, except for the Grift sale, have prescribed.

Citation
[2016] ZAWCHC 83
Parties
Plaintiff: KLD Residential CC; Defendant: Empire Earth Investments 17 (Pty) Ltd
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
24 June 2016
Case Number
9861/13, 16844/07
Procedural Posture
Civil Trial / Special Plea of Prescription Determined as a Stated Case Under Rule 33
Outcome
Special plea of prescription upheld; plaintiff's commission claims (except for the Grift sale) dismissed with costs.
Judges
Rogers
Legal Topics
Prescription Act Section 14, Without Prejudice Rule, Commission Claims, Interruption of Prescription, Settlement Negotiations
Civil Procedure Commercial and Corporate Prescription Act Section 14 Without Prejudice Rule Commission Claims Interruption of Prescription Settlement Negotiations

Case Brief

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Parties

KLD Residential CC

Plaintiff

Empire Earth Investments 17 (Pty) Ltd

Defendant

Procedural Posture

Civil Trial / Special Plea of Prescription Determined as a Stated Case Under Rule 33

Legal Issues

  1. 1 Whether a 'without prejudice' letter can be relied upon as an acknowledgment of liability interrupting prescription under section 14 of the Prescription Act.
  2. 2 Whether the Webber Wentzel letter is admissible as evidence of interruption of prescription.
  3. 3 Whether, assuming admissibility, the letter in fact interrupts prescription.

Ratio Decidendi

The court held that the Webber Wentzel letter was written without prejudice as part of settlement negotiations and thus protected by the without prejudice rule. The law does not recognize an exception allowing such communications to be used as acknowledgments interrupting prescription, either under South African or English law as at 31 May 1961. The acknowledgment of liability in the letter was not wholly unconnected to the settlement proposal and cannot be isolated from the protected communication. Therefore, the letter is inadmissible for the purpose of interrupting prescription, and KLD's commission claims, except for the Grift sale, have prescribed.

Court Disposition

Special plea of prescription upheld; plaintiff's commission claims (except for the Grift sale) dismissed with costs.

Orders

  • The issue of admissibility of the Webber Wentzel letter is determined in favour of the defendant.
  • The special plea of prescription succeeds; plaintiff's claims for commission, except R18 240 relating to the Grift sale, are dismissed with costs, including reserved costs of 20 April 2016.