PriceWaterhouseCoopers Inc and Others v National Potato Co-operative Ltd and Another (451/12) [2015] ZASCA 2; [2015] 2 All SA 403 (SCA) (4 March 2015)

PriceWaterhouseCoopers Inc and Others v National Potato Co-operative Ltd and Another (451/12) [2015] ZASCA 2; [2015] 2 All SA 403 (SCA) (4 March 2015)

The Supreme Court of Appeal held that the relationship between NPC and its auditors was contractual, but NPC failed to prove reckless mismanagement of credit by its officials or any breach of contractual duty by PWC that caused NPC's losses. The evidence relied upon by NPC, particularly that of its principal witness Mr Collett, was largely inadmissible hearsay and did not meet the standards for expert evidence. The directors and members of NPC were aware of the financial risks and bad debts, and there was no evidence that more detailed or alarmist audit reports would have led to remedial action or prevented the losses. The losses claimed arose from NPC's own trading activities and...

Citation
[2015] ZASCA 2
Parties
Appellant: PriceWaterhouseCoopers Inc; Appellant: Hoek & Wiehahn; Appellant: Wiehahn Meyernel; Appellant: Price Waterhouse Meyernel; Appellant: Price Waterhouse; Respondent: National Potato Co-operative Ltd; Respondent: IMF (Australia) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
4 March 2015
Case Number
451/12
Procedural Posture
Civil Appeal / Appeal From North Gauteng High Court (botha J)
Judges
Wallis JA, Fourie AJA, Koen AJA
Legal Topics
Auditor Liability, Contractual Duties, Negligence, Causation, Expert Evidence, Prescription
Commercial and Corporate Civil Procedure Auditor Liability Contractual Duties Negligence Causation Expert Evidence Prescription

Case Brief

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Parties

PriceWaterhouseCoopers Inc

Appellant

Hoek & Wiehahn

Appellant

Wiehahn Meyernel

Appellant

Price Waterhouse Meyernel

Appellant

Price Waterhouse

Appellant

National Potato Co-operative Ltd

Respondent

IMF (Australia) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From North Gauteng High Court (botha J)

Legal Issues

  1. 1 Was the relationship between NPC and PWC contractual.
  2. 2 What obligations did PWC assume as auditor under contract.
  3. 3 Did NPC officials recklessly mismanage credit as alleged.

Ratio Decidendi

The Supreme Court of Appeal held that the relationship between NPC and its auditors was contractual, but NPC failed to prove reckless mismanagement of credit by its officials or any breach of contractual duty by PWC that caused NPC's losses. The evidence relied upon by NPC, particularly that of its principal witness Mr Collett, was largely inadmissible hearsay and did not meet the standards for expert evidence. The directors and members of NPC were aware of the financial risks and bad debts, and there was no evidence that more detailed or alarmist audit reports would have led to remedial action or prevented the losses. The losses claimed arose from NPC's own trading activities and...