KLD Residential CC v Empire Earth Investments 17 (Pty) Ltd

• Jurisdiction: South Africa
• Citation: 2016 (5) SA 485 (WCC)

KLD Residential CC v Empire Earth Investments 17 (Pty) Ltd
2016 (5) SA 485 (WCC)

2016 (5) SA p485

Citation	2016 (5) SA 485 (WCC)
Case No	9861/13
Court	Western Cape Division, Cape Town
Judge	Rogers J
Heard	June 14, 2016
Judgment	June 24, 2016
Counsel	A la Grange SC (with CR Cilliers) for the plaintiff.; RJ Howie for the defendant.

Flynote : Sleutelwoorde B

Evidence — Privilege — Legal professional privilege — Scope — Without-prejudice correspondence — Whether without-prejudice correspondence admissible as evidence of interruption of prescription — Prescription Act 68 of 1969, s 14. C

Evidence — Admissibility — 'Without prejudice' rule — Scope — Whether without- prejudice correspondence admissible as evidence of interruption of prescription — Prescription Act 68 of 1969, s 14.

Prescription — Extinctive prescription — Interruption — By acknowledgment of liability — Without-prejudice correspondence — Whether without-prejudice D correspondence admissible as evidence of interruption of prescription — Prescription Act 68 of 1969, s 14.

Headnote : Kopnota

The defendant raised a special plea of prescription to the plaintiff's claim. In order to defeat the special plea, the plaintiff sought to rely on a without- prejudice letter, written on behalf of the defendant, as an acknowledgment E of liability interrupting prescription (in terms of s 14 of the Prescription Act 68 of 1969). The plaintiff argued for the existence of an exception to the general rule prohibiting the admission of a without-prejudice communication, to the effect that such a communication would be admissible for the limited purpose of establishing an interruption of prescription. The court however found that the law did not recognise such an exception and upheld F the defendant's plea. The court reasoned that there were no compelling reasons of public policy to limit the rule in the manner proposed by the plaintiff, and found support for its view in the fact that no such exception existed in English law. (Paragraphs [1], [15], [60] and [61] at 487C, 489A – C, 501D – E and 501F – G.)

Cases Considered

Annotations G

Case law

Southern Africa

Absa Bank Ltd v Chopdat 2000 (2) SA 1088 (W): referred to H

Absa Bank Ltd v Hammerle Group 2015 (5) SA 215 (SCA): considered

Absa Bank Ltd v Van de Vyver NO 2002 (4) SA 397 (SCA): dictum in paras [8] – [19] applied

Be Bop a Lula Manufacturing & Printing CC v Kingtex Marketing (Pty) Ltd 2008 (3) SA 327 (SCA) ([2008] 1 All SA 529; [2007] ZASCA 162): dictum in para [11] applied I

Feedpro Animal Nutrition (Pty) Ltd v Nienaber NO and Another [2016] ZASCA 32: referred to

Gcabashe v Nene 1975 (3) SA 912 (D): dictum at 914E applied

Jili v South African Eagle Insurance Co Ltd 1995 (3) SA 269 (N): referred to

Kapeller v Rondalia Versekeringskorporasie van Suid-Afrika Bpk 1964 (4) SA 722 (T): considered J

2016 (5) SA p486

Minister of Police v Mboweni and Another 2014 (6) SA 256 (SCA) ([2014] ZASCA 107): referred to A

Naidoo v Marine & Trade Insurance Co Ltd 1978 (3) SA 666 (A): considered and followed

One Stop Financial Services (Pty) Ltd v Neffensaan Ontwikkelings (Pty) Ltd and Another 2015 (4) SA 623 (WCC): referred to

Roestorf and Another v Johannesburg Municipal Pension Fund and Others 2012 (6) SA 184 (SCA): referred to B

Santam Ltd v Sayed [1998] 4 All SA 564 (A): referred to

Standard Bank of South Africa v A-Team Trading CC 2016 (1) SA 503 (KZP) ([2015] ZAKZPHC 43): compared.

Australia C

Field v Commissioner of Railways (NSW) [1957] HCA 92: considered

Greenway v Teoh [2014] ACTSC 224: referred to

Liu v Fairfax Media Publications Pty Ltd [2012] NSWSC 1352: referred to.

Canada D

Kirschbaum v 'Our Voices' Publishing Co et al 1971 CanLII 608 (On SC)): referred to

Langley (Township) v Witschel 2015 BCSC 123 (CanLII): referred to.

England

Bradford & Bingley plc v Rashid [2006] 4 All ER 705 (HL): considered and approved E

In re River Steamer Co; Mitchell's Claim (1871) LR 6 Ch App 822: referred to

Muller v Linsley & Mortimer (a Firm) [1996] PNLR 74: referred to

Ofulue and Another v Bossert [2009] 1 AC 990 (HL): considered and F approved

Rush & Tompkins Ltd v Greater London Council and Others [1989] AC 1280: referred to

Savings & Investment Bank Ltd v Fincken (in Liquidation) [2004] 1 All ER 1125 (CA): referred to

Waldridge v Kennison (1794) 1 Esp 143: referred to. G

Scotland

Richardson v Quercus Ltd [1998] ScotCS 112: referred to.

Statutes Considered

Statutes

H The Prescription Act 68 of 1969, s 14: see Juta's Statutes of South Africa 2015/16 vol 1 at 2-885.

Case Information

A la Grange SC (with CR Cilliers) for the plaintiff.

RJ Howie for the defendant.

I A special case, as contemplated in the Uniform Rules of Court, rule 33, for the determination of the defendant's special plea of prescription.

Order

(a)

The issue identified in para 3.1 of the stated case is determined in J favour of the defendant.

2016 (5) SA p487

(b)

The special plea of prescription thus succeeds and the plaintiff's A claims for commission, save in the amount of R18 240 relating to the sale to Werner Grift (Erf 884 on the schedule to the plaintiff's particulars of claim), are dismissed with costs, including the reserved costs of 20 April 2016.

(c)

The defendant is to pay the wasted costs of 11 June 2015. B

Judgment

Rogers J:

Introduction

[1] The issue in this case is whether the plaintiff (KLD) can rely on a C without prejudice letter as an acknowledgment of liability interrupting prescription. The issue has been presented in the form of a special case as contemplated in rule 33. The stated case was supplemented by certain formal admissions to which I shall presently refer.

KLD's claim against Empire D

[2] KLD's pleaded claim against the defendant (Empire) is the following. In terms of a written mandate concluded in November 2006 and extended during March 2007, KLD was authorised to market erven in a development and to receive commission on sales of which it was the effective cause, such commission to be regarded as earned once the E relevant purchaser took transfer. KLD was the effective cause of 99 sales set out in a schedule to the particulars of claim. It was thus entitled to commissions totalling R2,147 million, which commissions were earned on the registration dates specified in the schedule.

[3] Save in one instance (the sale of Erf 884 to Werner Grift), the F registration dates specified in KLD's schedule range from October 2008 to November 2009.

[4] KLD issued summons in June 2013. According to the sheriff's return, service was effected on 26 June 2013. Empire alleges in its special plea that summons was served on or about 25 June 2013. Nothing turns on G this.

[5] In its special plea Empire alleged that KLD's alleged right to commissions became due on the registration dates specified in KLD's schedule and that, save for the Grift sale, those registration dates were more than three years before service of summons. KLD's claim to all commissions H other than on the Grift sale had thus prescribed.

[6] Empire pleaded over on the merits. Empire alleged inter alia that KLD had breached the mandate in various respects and that Empire had certain claims arising from the breaches. Empire also alleged in general I terms that the consequence of the breaches was that KLD was not entitled to commission in the amount claimed or at all. The plea concluded with a prayer that KLD's claim be reduced by an amount of R428 000 plus interest and that judgment thereon in any event be postponed pending determination of the claims advanced by Empire in an action already instituted by it against KLD. J

2016 (5) SA p488

Rogers J

A [7] In its replication to the special plea KLD alleged that on 29 July 2011 Empire's then attorneys, Webber Wentzel, acting as Empire's authorised representatives, wrote a letter to KLD's then attorneys, Jooste Leidig Attorneys, acting in their capacity as KLD's authorised representatives, in which Empire acknowledged that, pursuant to the mandate as B extended, KLD had become entitled to commissions totalling R2 105 960. This was alleged to have been an acknowledgment interrupting prescription in terms of s 14 of the Prescription Act 68 of 1969. I shall refer to this letter as the Webber Wentzel letter.

Empire's claims against KLD

C [8] The Webber Wentzel letter and Empire's plea mention a summons Empire issued against KLD in 2007. By order made in September 2013 the cases were consolidated on the basis that Empire was to be treated as a claimant in reconvention in KLD's action. At the commencement of the hearing before me Mr La Grange SC, who appeared for KLD with Mr Cilliers, agreed that I could have regard to all pleadings in the D consolidated cases to ascertain, insofar as might be relevant, when the pleadings were filed and what assertions the parties were making. Mr Howie, who appeared for Empire, agreed with this course which was in accordance with his client's position in earlier procedural skirmishing on the stated case.

E [9] Empire issued its summons in November 2007, ie about three and a half years before the Webber Wentzel letter and about five and a half years before KLD's summons. Empire relied on the written mandate and extension thereof. Empire alleged breaches by KLD in terms similar to those subsequently alleged in Empire's plea to KLD's claim. Empire F alleged that KLD owed it R428 000 in respect of KLD's contribution to an advertising and marketing fund and R35 889 as damages in respect of expenses incurred by Empire in performing administrative functions which KLD should have performed. Empire also alleged that, because of the breaches, it had lawfully cancelled the extended mandate on 29 August 2007.

G [10] In March 2008 Empire amended its...