Mike Sellick Trust (Pty) Ltd v Ethekwini Municipality (7651/2007) [2014] ZAKZDHC 33 (3 September 2014)

Mike Sellick Trust (Pty) Ltd v Ethekwini Municipality (7651/2007) [2014] ZAKZDHC 33 (3 September 2014)

The court held that any agreement purporting to set-off municipal rates against hiring charges is invalid and unenforceable as a matter of public policy, following established precedent that debts owed to the State, such as rates and taxes, cannot be set-off. Regarding prescription, the court found that the plaintiff's claim for the return of equipment is based on the rei vindicatio, which is not subject to the three-year extinctive prescription period but rather the thirty-year acquisitive prescription period under section 1 of the Prescription Act. The court accepted the reasoning in Staegemann v Langenhoven and Others, concluding that the right to claim return of property persists...

Citation
[2014] ZAKZDHC 33
Parties
Applicant: Mike Sellick Trust (Pty) Ltd; Respondent: Ethekwini Municipality
Court
Kwazulu-Natal High Court, Durban
Jurisdiction
South Africa
Judgment Date
3 September 2014
Case Number
7651/2007
Procedural Posture
Special Plea / Ruling on Special Plea Prior to Trial
Outcome
Special plea dismissed; matter to proceed to trial on the merits, excluding set-off claim.
Judges
M R Chetty
Legal Topics
Prescription Act, Rei Vindicatio, Set Off, Municipal Rates, Public Policy
Civil Procedure Land and Property Prescription Act Rei Vindicatio Set Off Municipal Rates Public Policy

Case Brief

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Parties

Mike Sellick Trust (Pty) Ltd

Applicant

Ethekwini Municipality

Respondent

Procedural Posture

Special Plea / Ruling on Special Plea Prior to Trial

Legal Issues

  1. 1 Whether the plaintiff's claim for the return of equipment and accounting for rates liability is prescribed under the Prescription Act.
  2. 2 Whether an agreement to set-off municipal rates against hiring charges is valid and enforceable in law.

Ratio Decidendi

The court held that any agreement purporting to set-off municipal rates against hiring charges is invalid and unenforceable as a matter of public policy, following established precedent that debts owed to the State, such as rates and taxes, cannot be set-off. Regarding prescription, the court found that the plaintiff's claim for the return of equipment is based on the rei vindicatio, which is not subject to the three-year extinctive prescription period but rather the thirty-year acquisitive prescription period under section 1 of the Prescription Act. The court accepted the reasoning in Staegemann v Langenhoven and Others, concluding that the right to claim return of property persists...

Court Disposition

Special plea dismissed; matter to proceed to trial on the merits, excluding set-off claim.

Orders

  • The special plea raised by the defendant is dismissed with costs.