Minister of Safety and Security v Gardner (CA 250/2008) [2009] ZAECGHC 38 (2 July 2009)

12

FORM A

FILING SHEET FOR EASTERN CAPE HIGH COURT, GRAHAMSTOWN JUDGMENT

ECJ:

PARTIES:

THE MINISTER OF SAFETY AND SECURITY

And

EUSTACE

PERCIVALE ABRAHAM GARDNER

Registrar: CA 250/08

Magistrate:

High Court: EASTERN CAPE HIGH COURT, GRAHAMSTOWN

DATE HEARD: 05/06/09

DATE DELIVERED: 02/07/09

JUDGE(S):

JONES J, SANDI J

LEGAL REPRESENTATIVES –

Appearances:

for the Appellant(s): ADV: G. Wolamrans

for the Respondent(s): ADV: J.R. Koekemoer

Instructing attorneys:

for the Appellant(s): WHITESIDES

ATTORNEYS

for the Respondent(s): NOLTE

SMIT ATTORNEYS

CASE INFORMATION -

Nature of proceedings :

APPEAL – PRESCRIPTION

Reportable

THE HIGH COURT OF SOUTH AFRICA

In the Eastern Cape Division Case No CA 250/2008

Grahamstown

In the matter between

THE MINISTER OF SAFETY AND SECURITY Appellant

and

EUSTACE PERCIVALE ABRAHAM GARDNER Respondent

Coram JONES AND SANDI JJ

Summary Prescription – claim by the State against an official for the recovery of the amount which the State was liable to pay to a member of the public by reason of the wrongful conduct of the official – prescription of the claim against the official commenced to run when the State knew or could reasonably have known of the identity of the official and the facts which gave rise to his liability to the member of the public, which, in turn, gave rise to the State becoming liable – the provisions of regulation 12 of the treasury regulations published in terms of section 76 of the Public Finance Management Act No 1 of 1999 are not relevant to the date of the commencement of prescription.

JUDGMENT

JONES J

[1] This litigation concerns the theft of a 1994 Toyota Venture motor vehicle CCM 499 EC (the Venture) while it was being kept as an exhibit in the custody of a member or members of the vehicle theft unit of the South African Police Services at Queenstown. The facts were that the Venture was stolen in the course of an armed robbery in October 2000. It was recovered by the police in January 2001, and was taken by them to the police station at Ezibeleni near Queenstown where it was identified as the vehicle stolen in the robbery. On 23 January 2001 it was transferred to the vehicle theft unit of the South African Polices Services at Queenstown for safekeeping as an exhibit. During February 2001, the investigating officer in the armed robbery case, Inspector Pani, looked for the Venture at the instance of its owner, who wanted it to be released to him. The Venture could not be found. On 6 March 2001 Inspector Pani reported the matter and called for an investigation. By then it had been established that the Ezibeleni police had transferred the Venture to the police at Queenstown who had accepted it into their custody. They could not account for its whereabouts. It must have been removed from police custody by an unauthorized person or persons.

[2] The respondent is the official employed by the South African Police Services who accepted the keys of the Venture from the Ezibeleni

police and who, according to his employer (the plaintiff a quo, now the appellant), negligently failed to follow standing orders for its safekeeping thereafter. As a result, the appellant became

vicariously liable to the owner of the Venture for its value, and, on 4 October 2003, paid an amount of R30 000-00 to the owner in full and final settlement of his claim.

[3] The appellant then issued summons to recover the amount of R30 000-00 from the respondent. The respondent denied liability on the merits. He also pleaded prescription. His case was that in terms of section 12 of the Prescription Act No 68 of 1969 prescription began to run when the debt became due on 6 March 2001; that the 3 year period of prescription laid down by the Act expired at midnight on 5 March 2004; and that the claim was therefore extinguished by prescription before 15 September 2004 when summons was served upon him. The magistrate upheld the special plea of prescription and dismissed the action with costs. The appellant – the plaintiff in the court below – now appeals against that decision.

[4] Section 12(1) of the Prescription Act No 68 of 1969 provides that prescription shall commence to run as soon as the debt is due. Section 12(3) deals with when a debt is due. It provides that the debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and the facts from which the debt arises: provided that the creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care. It should not be forgotten that section 12(1) refers not to the date upon which the cause of action arises but to the date when the debt is due. It is the debt and not the cause of action which becomes extinguished by prescription. The operative date, i.e. the date when the debt is due, is the date when it is claimable and payable. The courts have however held that to have knowledge of the facts from which the debt arose within the meaning of section 12(3) the creditor must, by reason of the wording of the section, have knowledge of all the facts from which the debt arose. These facts make up his complete cause of action. See Truter v Deyzel [2006] ZASCA 16; 2006 (4) SA 168(SCA) para 16 which makes it clear that everything must have happened which would entitle the creditor to institute action and pursue the claim, i.e. which would render the debt immediately claimable. That is when there is a complete cause of action on the facts. Was the magistrate correct in concluding that the appellant had knowledge of the facts which make up a complete cause of action

on 6 March 2001?

[5] The starting point is the cause of action alleged by the appellant in his particulars of claim. The essence of the claim is patrimonial loss under the actio legis Aquilia. The facts upon which it is based are alleged in paragraphs 3, 4, 5 and 6. In summary, they are

that the Venture motor car had been placed in the custody and control of the defendant, now the respondent;

that the respondent was an official employed by the appellant and was under a duty to take precautions to prevent the Venture from being stolen while in police custody; that it was stolen on a date between 23 February 2001 and 6 March 2001 as a result of the respondent’s failure to take reasonable

precautions to prevent the theft; and

that as a result the appellant was obliged to pay the value of the Venture to its owner.

The parties agreed on a set of facts for the purposes of the special plea of prescription. These facts are set out in the bundle of documents Exhibit A. In my view the facts which are summarised above and which were averred for the purpose of making out the appellant’s cause of action are all established as part of the agreed facts, either directly or by necessary implication.

[6] On the facts contained in Exhibit A, the Venture came into police custody on 17 February when it was recovered by the police after the robbery. It was taken to the Ezibeleni police station near Queenstown where it was entered into the police records as having been recovered. By then it had been positively identified by a person in the position of the owner. On 23 January 2001 it was transferred to the vehicle theft unit of the police at Queenstown for safekeeping. During February 2001 the investigating officer, Inspector Pani was requested to return the Venture to its owner. She went to look for it at the police depot in Queenstown where it should have been in police custody. It could not be found. Inspector Pani established that on 23 January 2001, the vehicle had been parked outside the premises of the vehicle theft unit in Queenstown, its keys had been handed to the respondent, the respondent had been told exactly where it was parked so that he could take control over it, and the respondent had placed the keys in a drawer in his superior officer’s desk. The respondent had been instructed to report the receipt of the vehicle to his superior officer and to register it in the official records, and he had undertaken to do so. It had not been reported or registered. The keys were still in the drawer underneath some documents when Inspector Pani made her investigations during February and March 2001. The respondent’s superior officer knew nothing about the Venture having been brought to his department. On 6 March 2001 Inspector Pani made an official statement reporting that the Venture was missing and formally calling for a police investigation.

[7] The conclusion is that on 6 March 2001 the appellant had full knowledge that the Venture could not be accounted for and was not at the place where it should have been, namely in the care of the respondent’s unit at the official venue where vehicle exhibits were kept. It must have been stolen, and it could only have been stolen if proper precautions had not been taken for its safekeeping. The appellant therefore knew that the Venture had been stolen from police custody, and he had all the information to ascertain who had custody and control of the vehicle while it was in police custody. It must have been in the custody of one of his employees, and the appellant had all the records, and all the resources, to know which employee was responsible. He knew that the respondent had been the official who had taken receipt of it when he accepted the keys. He knew that the respondent had thereafter not followed standard procedure by registering it, reporting it, and seeing that it was placed in proper safekeeping. He knew that because the vehicle had been stolen from police custody he would be liable to pay its value to its owner as damages. In other words, on 6 March 2001 he had full knowledge of all the facts alleged in the paragraphs 3, 4, 5, and 6 of his particulars of claim. He knew all the facts necessary for a complete cause of action at common law under the actio legis Aquilia.

[8] In these circumstances the conclusion is inescapable that the respondent knew or should reasonably have known on or before 6 March 2001 that this debt had arisen and that the respondent was the debtor. On the face of it and unless there was some other fact or condition rendering the debt not yet legally payable, the debt became due within the meaning of section 12 on 6 March 2001. The appellant has not pleaded any such other prerequisite for the completion of his cause of action in his particulars of claim. On the face of it, the magistrate’s conclusion was correct on the facts.

[9] The appellant does not take issue with the conclusion that on 6 March 2001 the appellant was aware of all the facts which make up his common law cause of action. The argument on his behalf was that the treasury regulations published in terms of section 76 of Public Finance Management Act No 1 of 1999 make provision for additional prerequisites which must be satisfied before his cause of action is complete, and that he did not become aware of the facts giving rise to these prerequisites until 14 December 2001. That is the date, so it was argued, on which prescription commenced to run, and service of his summons on 15 September 2004 interrupted prescription.

[10] In my view this argument is misconceived. The relevant treasury regulation is regulation 121anc" HREF="#sdfootnote1sym">1 which deals with the management of losses and claims. The regulation deals with a variety of situations, some of which are here irrelevant – for example, claims against the State by officials, losses caused by accident, and losses caused by the criminal conduct of others. The important regulations for present purposes are regulation 12.1, and regulation 12.7 read with regulation 12.2. These sub-regulations deal with the procedures to be followed by a State institution for the recovery of loss or damage caused by its officials. On the plain meaning of their wording, they do not give a remedy or create a debt where there was none before. They do not prescribe requirements for a cause of action which were not required before. As is evident from their wording and content, they lay down the procedure for recovering loss or damage or damages in respect of which there is already a complete cause of action.

[11] Regulation 12.1, which is headed ‘general’, recognizes (a) the State’s2 role as a self-insurer for its own damages and accident risks and (b) its responsibility for all claims and losses of State property where these arise from activities on behalf of the State by an official who is or was employed by the State. The procedure for recovering the amount of the claims and losses from the official is laid down in regulation 12.7. Regulation 12.7.1 provides that losses or damages suffered by an institution because of an act committed or omitted by an official, must be recovered from such an official. Both regulation 12.1 and 12.7.1 apply only to cases where the official is liable in law for the loss or damage. This is fundamental. The same requirement is carried through to the specialized instance referred to in regulation 12.2.1.where the State must make good loss or damage caused by an act or omission by an official to another person, a member of the public. Here, too, the regulation provides a procedure for the recovery of the loss from the official only if the official is liable in law in regard to the act or omission. The procedure is for the accounting officer to determine the amount of the loss and to make written demand to the official for payment, and, if need be, for referral to the State Attorney for advice or for legal action.

[12] The appellant’s argument is that the effect of regulation 12.7.3 and the proviso contained in regulation 12.2.1 (a)-(g) is to render incomplete the State’s cause of action to recover a debt from an official, with the result that it is not due or claimable until the circumstances referred to in the regulations arise. Regulation 12.7.3 says that a claim against an official must be waived if the conditions in paragraph 12.2.1 (a) to (g) are not applicable. The submission on the appellant’s behalf is that the appellant could not claim for the recovery of the loss in this case until he was able to ascertain that he was not obliged to waive his claim because of the applicability of the conditions in regulation 12.2.1 (a) to (g). Regulation 12.2.1 reads:

12.2.1 An institution must accept liability for any loss or damage suffered by another person, which arose from an act or omission of an official as a claim against the state and does not recover compensation from an official, provided the official shall forfeit

this cover if he or she, with regard to the act or omission, is liable in law and –

intentionally exceeded his or her powers;

made use of alcohol or drugs;

did not act in the course and scope of his or her employment;

acted recklessly or intentionally;

without prior consultation with the State Attorney, made an admission that was detrimental to the state; or

failed to comply with or ignored standing instructions, of which he or she was aware of or could reasonably have been aware of, which led to the loss, damage or reason for the claim, excluding damage arising from the use of a state vehicle; and

in the case of a loss, damage or claim arising from the use of a state vehicle, the official –

(i) used the vehicle without authorisation;

(ii) did not possess a valid driver’s licence or other appropriate licence;

(iii) did not use the vehicle in the interest of the state;

(iv) allowed unauthorised persons to handle the vehicle; or

(v) deviated materially from the official journey or route without prior authorisation.

This argument is unsound. The regulation could easily have said that a State institution does not have a right to recover the loss or damage from the official until some or other condition is met, if that were its intention. It does not say so and its wording cannot justifiably be given that interpretation. On the contrary, it says a State institution must waive its right of recovery. As a matter of logic it must have that right before it can waive it. By requiring that the official must be liable in law, the regulations presuppose that the debt for the loss or damage must be claimable and payable, and hence due and owing, by the official within the meaning of the Prescription Act. Otherwise, he is not liable in law. Only when he is liable in law does the question arise of waiver or forfeiture of cover. The result is that appellant’s argument imports a meaning which cannot be supported by the plain wording of regulation 12 and which cannot be sustained except by an absurdity – that the State institution must waive a claim against the official which it does not have. The proper way to understand the regulations, within the framework of litigation, is for a compulsory waiver, if applicable, to be raised as a defence in a plea and to be answered in a replication. If that is so, the regulations do not play a role in determining the facts which go to make up the cause of action. They are therefore irrelevant to the date upon which a debt becomes due for the purposes of prescription.

[13] A second argument put up on behalf of the appellant was the contention that prescription did not commence until the date upon which the appellant actually paid the owner the agreed value of the Venture. The authorities make it clear that at common law the operative date is the date that the damage is suffered or the harm is incurred, and not the date upon which damages are paid. Counsel for the appellant submitted, however, that the common law position is superseded by the provisions of regulation 12.2.3 which provides that where an official has forfeited his or her cover in terms of paragraph 12.2.1, the amount paid by the institution for the loss, damage or claim arising from an act or omission must be recovered from the official concerned. This argument must fail because it depends for its validity on an acceptance of the unacceptable argument that there is no cause of action until the pre-requisites of the regulations are satisfied. It is unsound for another reason as well. It suggests that the use of the past tense in the words ‘the amount paid’ in the regulation requires payment by the State institution to the member of the public before the amount can be recovered from the official. But that is not what the regulation says. It merely describes the normal situation where the third party is paid and then steps are taken to recover the amount from the official. It does not require prior

payment as a condition precedent to a claim. To give it the meaning suggested on behalf of the appellant would not only fly in the face of the plain meaning of the language and require a twisted and artificial meaning. It would be contrary to the rule

that a regulation should be interpreted to be in harmony with the common law, rather than inconsistent with it.

[14] In any event, all the facts necessary to ascertain whether or not the appellant was obliged to waive its right of recovery from the respondent were in existence by 6 March 2001. A routine enquiry taking no more than a day or so at the most would have established whether any of the factors mentioned in regulation 12.2.1 (a) to (g) were applicable or not. Assuming for the moment that the question of waiver of the right of recovery is relevant to knowledge of the facts from which the debt arises, the inference is overwhelming from the agreed facts that the appellant had or is deemed to have had such knowledge for the purposes of section 12(3) of the Prescription Act on 6 March 2001.

[15] In the result the appeal is dismissed with costs.

RJW

JONES

Judge of the High Court

16 June 2009

SANDI J I agree.

B SANDI

Judge of the High Court

1 The parties annexed the current treasury regulations promulgated under section 76 of the Public Finance Management Act No 1 of 1999 in GNR 345 of 9 April 2001, as amended by Notice R 740 GG 23463 of 25 May 2002. The agreement between the parties appears to assume that these are applicable to this case. The amendment became operative on 27 May 2002, which is after 6 March 2001 when the respondent says the debt became due, and after 14 December 2001, when the appellant says it became due. The assumption may not be correct, and, if not, there are changes in the wording in particular of regulation 12.2.1 which may have some bearing on the matter. The view that I take of the issue is that it matters not which of the regulations is applicable because neither has bearing on the date upon which this debt became due. I note however that the old regulation makes no reference in regulation 12.2.1 to any forfeiture by the official of his cover under the regulations.

2 The regulations sometimes spell ‘State’ with a lower case ‘s’, and sometimes with an upper case ‘S ’.