Absa Bank Ltd v Keet

• Jurisdiction: South Africa
• Judge: Maya JA, Bosielo JA, Wallis JA, Zondi JA and Meyer AJA
• Judgment Date: 28 May 2015
• Citation: 2015 (4) SA 474 (SCA)
• Docket Number: 817/2013 [2015] ZASCA 81
• Hearing Date: 11 May 2015
• Counsel: NC de Jager for the appellant. L le R Pohl SC for the amicus curiae.
• Court: Supreme Court of Appeal

Zondi JA (Maya JA, Bosielo JA, Wallis JA and Meyer AJA concurring):

[1] The main issue in this appeal is whether a claim under the G actio rei vindicatio becomes prescribed after three years by virtue of the provisions of s 10 of the Prescription Act 68 of 1969 (the Prescription Act). The court a quo (Fabricius J) held that it did. In so doing he rejected the view of Blignault J in Staegemann v Langenhoven [1] that such a claim is not a debt for the purposes of ch III of the Prescription Act and can accordingly not be defeated by a plea of extinctive prescription. H

[2] The issue arose in the following circumstances: Eastvaal Motors Ltd (Eastvaal Motors) sold a tractor vehicle (vehicle) to the respondent, André Keet, in terms of a written instalment sale agreement (the agreement) concluded by the parties on 26 September 2003. I Eastvaal Motors' right, title and interest in and to the agreement was ceded to the appellant, Absa Bank Ltd, on 26 September 2003. Thereafter the respondent took delivery of the vehicle.

Zondi JA (Maya JA, Bosielo JA, Wallis JA and Meyer AJA concurring)

A [3] It was an express term of the agreement that ownership of the vehicle would not pass to the respondent until all amounts owing under the agreement had been paid in full. The purchase price would be paid by way of a specified number of instalments commencing on 1 November 2003 and ending on 1 November 2007. It was a further term of the B agreement that, if the respondent failed to comply with any provisions of the agreement, or failed to make any payment in terms thereof, the appellant would be entitled to the return and possession of the vehicle. In that event the appellant would also be entitled to demand payment of any arrear instalments.

C [4] On 18 November 2011 the appellant instituted action against the respondent in the North Gauteng High Court. It alleged that the respondent was in breach of the agreement in that he had defaulted in paying the instalments due and that it had cancelled the agreement. The summons was served on the respondent on 14 December 2011. In that action the appellant sought confirmation of its cancellation of the D agreement and the repossession of the vehicle.

[5] The respondent defended the action and, apart from pleading over on the merits of the appellant's claims, delivered a special plea in which he alleged that the appellant's claim for payment of arrears had become prescribed under the Prescription Act. In his special plea the respondent E alleged that the agreement on which the appellant sued would have come to an end on 1 November 2007, which is the date on which he contended the amount alleged to be outstanding became due and payable. The respondent contended that in terms of s 11 of the Prescription Act, 'any claim for arrears' against the respondent pursuant to the agreement F prescribed on 31 October 2010. For that reason he contended that it was not open to the appellant to cancel the agreement and recover possession of the vehicle. The appellant did not replicate to the respondent's special plea. The special plea was set down separately. On the basis of an assumption that what was pleaded by the respondent in his special plea, though inelegantly expressed, covered the point, the issue for determination was whether the appellant's claim for repossession of the vehicle G had become prescribed.

[6] The court a quo upheld the special plea with costs. It did so on the basis of its finding that Staegemann, in which it was held that a vindicatory claim being a claim to ownership in a thing and not a claim H for payment of a debt, does not prescribe after three years, was wrongly decided. [2] In upholding the plea it followed cases such as Evins v Shield Insurance Co Ltd; [3] Barnett v Minister of Land Affairs; [4] Grobler v Oosthuizen; [5]

Zondi JA (Maya JA, Bosielo JA, Wallis JA and Meyer AJA concurring)

and Leketi v Tladi NO. [6] (More on these cases will be said later in the A judgment.) It reasoned that if Staegemann were correct, 'the Bank could withhold its demand for the tractor for another decade or even longer, and then demand return of the vehicle so that it could calculate its damages'. It went on to refer to a recent decision of this court in Bester v Schmidt Bou Ontwikkelings CC, [7] in which the correctness of Barnett and B the decisions that followed it were doubted, and in which this court found the reasoning in Staegemann attractive and quite convincing. This statement did not persuade the court a quo to adopt the reasoning in Staegemann.

[7] The parties reached a settlement shortly before the hearing so that C the respondent was not represented. In view of the nature of the issues involved, this court asked the Free State Bar Council to appoint an amicus curiae and we are grateful to him. At the hearing of this appeal this court requested the appellant and the amicus curiae to address it on two preliminary points. The first was whether prescription of the D vindicatory claim had been pertinently raised in the pleadings. [8] The second was whether the subsequent settlement of the matter by the parties and the withdrawal by the respondent of his opposition to the appeal had not rendered the appeal moot by virtue of the provisions of s 16(2)(a)(i) of the Superior Courts Act 10 of 2013. [9] With regard to the E first point the parties were agreed that nothing turned on it as the issue was fully ventilated when the special plea was argued in the court a quo, and that its judgment dealt with it and it is an issue in respect of which leave to appeal to this court was granted, submitted the appellant. As to the second point, the appellant urged this court to hear the appeal notwithstanding its mootness, on the ground that it raises a discrete legal F issue of public importance.

[8] As a general principle, courts should not decide issues that are of solely academic interest. This principle is trite, [10] being one of long standing. [11] Notwithstanding its mootness, I am of the view that this G appeal is a proper matter for this court to exercise its discretion in favour

Zondi JA (Maya JA, Bosielo JA, Wallis JA and Meyer AJA concurring)

A of hearing it. [12] The issue of the legal nature of a vindicatory claim and whether it gives rise to a debt that is subject to extinctive prescription has been decided differently by different divisions of the High Court. The recent decision of Staegemann on the period of extinctive prescription applicable to the vindicatory claim departs from the earlier decision in B what is now the Gauteng Local Division in Evins, which received this court's approval in Barnett. That decision was in turn followed by this court in Grobler and Leketi. This court in Bester doubted the correctness of all three of these decisions of this court and expressed the view that a day would arise when this court would have an opportunity to reconsider C this vexing legal question. This is that day. Undoubtedly this appeal raises a discrete legal issue of public importance 'that would affect matters in the future and on which the adjudication of this court is required . . . .' [13] Moreover, the issue is not a factual dispute between the parties, but rather a matter of law that will affect many litigants beyond D the confines of this case.

[9] I turn now to consider the merits of the appeal, namely whether the appellant's claim for the repossession of its vehicle is a 'debt', which for the purposes of the Prescription Act prescribes after three years. The court a quo dismissed the appellant's claim for repossession of the E vehicle on the basis that it was a 'debt' as contemplated in s 11 of the Prescription Act and thus prescribed after three years. As I have already stated above, it reached its conclusion on the basis that Staegemann was wrongly decided.

[10] Counsel for the appellant submitted that a vindicatory claim is F clearly a claim based on ownership of a thing and that it cannot be described as a claim for satisfaction of a debt. He argued that this court should follow the reasoning in Staegemann, which he submitted was correct. The amicus curiae submitted that if the legislature in its...