BARREL ENGINEERING & FOUNDERS (PVT) LTD v BITUMEN CONSTRUCTION SERVICES (PVT) LTD
HIGH COURT, HARARE
[Special Plea HH 715-16]
November 17, 2016
MANGOTA J
Contract - Performance - Time for - Position when time for performance not agreed between the parties - Need for defaulting party to be placed in mora by demand being made specifying time for performance.
Prescription - Interruption of - Acknowledgement of debt - Tacit acknowledgement made when seeking indulgence - Prescription thereby interrupted.
The defendant, when called upon to pay a debt owed to the plaintiff, sought and was more than once granted indulgences to pay. It did not deny liability. When the plaintiff brought the present action, the defendant claimed that the debt had prescribed. The plaintiff had also alleged that the defendant was liable on demand for payment being made, the contract not having been specific in this regard.
Held, that where time for performance has not been agreed upon by the parties, performance is due immediately on conclusion of their contract or as soon thereafter as is reasonably possible in the circumstances. But the debtor does not fall into mora ipso facto if he fails to perform forthwith or within a reasonable time. He must know that he has to perform. This form of mora, known as mora ex persona, only arises if, after a demand has been made calling upon the debtor to perform by a specified date, he is still in default. The demand, or interpellatio, may be made either judicially, by means of a summons, or extra-judicially, by means of a letter of demand, or even orally; and to be valid it must allow the debtor a reasonable opportunity to perform by stipulating a period for performance.
Held, further, that the defendant's tacit acknowledgement of liability interrupted the period of prescription. The request for indulgences and the granting of the same interrupted the prescriptive period. The interruption caused the period of prescription to commence to run afresh.
Cases cited:
Asharia v Patel & Ors 1991 (2) ZLR 276 (S), followed
Nyandoro & Anor v Nyandoro & Ors 2008 (2) ZLR 219 (H), referred to
Trinity Asset Management (Pty) Ltd v Grindstone Investments 132 (Pty) Ltd [2016] ZASCA 135 (unreported) (South Africa), referred to
Legislation considered:
Prescription Act [Chapter 8:11], ss 15, 15 (d), 16, 18
Books cited:
Lubbe GF and Murray CM Farlam & Hathaway Contract: Cases, Materials and Commentary (3rd edn, Juta & Co Ltd, Cape Town, 1998) pp 752-753
Maja I The Law of Contract in Zimbabwe (Maja Foundation, Harare, 2015) p 147
B Mufadza, for the plaintiff
E Drury, for the defendant
MANGOTA J:
On 22 March 2016, the plaintiff issued summons against the defendant. It claimed payment of US$ 11 947.27, interest at the prescribed rate and costs of suit. The claim, according to it, arose from the goods - screw housings, brushes and bearings - which it manufactured and sold to the defendant in June 2012. The goods, it said, were manufactured and sold to the defendant at the latter's special instance and request. It referred the court to the letter of demand which it addressed to the defendant on 3 February 2016. It stated that the letter placed the defendant in mora. It insisted that prescription commenced to run from the date of the letter.
The defendant raised a special plea to the plaintiff's claim. It stated that the claim had prescribed. It denied that the debt arose in February 2016 when the plaintiff wrote demanding the sum of US$ 11 947.27 from it. It said it ought to have paid for the goods in 2012 when it received the plaintiff's invoices. It insisted that the debt fell due in 2012. It said summons should have been served upon it in 2015. It moved the court to dismiss the plaintiff's claim with costs.
The issue which fell for determination was whether or not a claim which was allegedly incurred in 2012 with a final demand being made in 2016 was prescribed. The Prescription Act [Chapter 8:11] ("the Act") was relevant to the resolution of the issue. Sections 15 and 16 of the Act were more pertinent to the matter than otherwise.
Section 15 refers to the period of prescription of debts. Section 16 deals with the date on which prescription begins to run.
Section 15 (d) of the Act reads as follows:
"Periods of prescription of debts
The period of prescription of a debt shall be –
(a)-(c)...
(d) except where any other enactment provides otherwise, three years, in the case of any other debt."
Section 16 of the Act reads as follows:
"16 When prescription begins to run
(1) Subject to subsections (2) and (3), prescription shall commence to run as soon as a debt is due.
{mprestriction ids="1,2,3"}(2) If a debtor wilfully prevents his creditor from becoming aware of the existence of a debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt.
(3) A debt shall not be deemed to be due until the creditor becomes aware of the identity of the debtor and of the facts from which the debt arises:
Provided that a creditor shall be deemed to have become aware of such identity and of such facts if he could have acquired knowledge thereof by exercising reasonable care." (my emphasis).
Evidence which was filed of record showed that the debt which related to the plaintiff's claim fell under s 15 (d) of the Act. Its period of prescription was three years and not more.
A cursory reading of the parties' case seemed to be in synch with the defendant's submissions. The alleged debt, it appeared, fell outside s 15 (d) of the Act. The debt seemed to have been incurred four years ago. The final letter of demand which the plaintiff addressed to the defendant on 3 February 2016 was relevant in this regard.
The plaintiff stated in para 5 of its declaration as follows:
"Upon delivery of the said merchandise, defendant was subsequently and variously called to pay the sum of US$ 11 947.27 but it continued to seek and was granted unending indulgences to pay." (my emphasis)
The defendant did not dispute the plaintiff's assertion which was to the effect that it continued to seek and was granted unending indulgences to pay. It also did not dispute the assertion which was to the effect that the plaintiff made oral demands for its money.
The plaintiff's uncontroverted statements showed two things. These were that:
(a) the defendant acknowledged its indebtedness to the plaintiff in the sum claimed; and
(b) it sought unending indulgences from the plaintiff.
The dates on which such oral demands were made remained unstated. They might have been made in 2015 or in 2016. However, given the date of the letter of final demand i.e. - 3 February 2016 - the probabilities seemed to suggest that the plaintiff's oral demands and the defendant's request for unending indulgences could have occurred in 2015 and not in 2016. The court's observations in the mentioned regard found fortification from the fact that the plaintiff made a number of oral demands. It could not, in all probability, have made such demands in the month of January 2016 alone.
The defendant's unending request for indulgences which the plaintiff granted to it were, in all probability, more in consonant with what took place in 2015 than what could have occurred in 2016. Its tacit acknowledgement of liability did, in the court's view, interrupt the period of prescription.
Section 18 of the Act was relevant in the mentioned regard. The section deals with interruption of prescription by a debtor's acknowledgement of liability. It reads:
"18 Prescription interrupted by acknowledgement of liability
(1) The running of prescription shall be interrupted by an express or tacit acknowledgement of liability by the debtor.
(2) If the running of prescription is interrupted in terms of subsection (1), prescription shall commence to run afresh –
(a) from the date on which the interruption takes place; or
(b) if at the time of the interruption or at any time thereafter the parties postpone the due date of the debt, from the date upon which the debt again becomes due." (my emphasis)
See also GF Lubbe and CM Murray Farlam & Hathaway Contract: Cases, Materials and Commentary (3rd edn, Juta & Co Ltd, Cape Town, 1998) at pages 752-753.
The defendant in casu made a tacit acknowledgement of liability to the plaintiff. It did so when it made unending request for indulgences. The plaintiff granted its request for indulgences each time such were made to it. The request for indulgences and the granting of the same interrupted the prescriptive period. The interruption caused the period of prescription to commence to run afresh. It was on the basis of the above analysed matters, therefore, that the court remained of the view that the defendant's special plea was misplaced. It could not stand.
On 3 June 2016, the plaintiff furnished the defendant with further particulars. These were at the defendant's request. It was in the course of furnishing such further particulars that the plaintiff availed to the defendant copies of purchase orders. These, it submitted, related to the goods which it said it manufactured and sold to the defendant. Both purchase orders were issued on 20 June 2012.
The plaintiff stated, in its replication, that the purchase orders were released to the defendant in 2013. It submitted that these were released after it had completed the work which the defendant requested it to perform.
The defendant, it was observed, did not address the plaintiff's above mentioned statement at all. It, in other words, did not make any reference to the allegation that the purchase orders were tendered to it in 2013. Its heads were conspicuously silent on that issue. The defendant's silence on such a critical issue as the plaintiff's raised left its case in a very adverse position. It undid, in a very large measure, the basis upon which its special plea rested. The special plea could not, under the stated circumstances, hold.
The contract which the parties allegedly concluded was silent on when payment should have been made. The plaintiff stated, in its further particulars, that the defendant was liable to pay upon demand being made to it for the same. It said it made several demands which the defendant did not comply with. It submitted that the letter of 3 February 2016 was its final demand for payment. It, in the mentioned regard, referred the court to Asharia v Patel & Ors 1991 (2) ZLR 276 (S). It stated that the cited case supported its position in casu.
The court was pleased to associate itself with the remarks which GUBBAY CJ made in Asharia (supra). The learned Chief Justice discussed the issue which related to matters of the present nature in a clear and succinct manner. He remarked as follows at 279G-280B:
"The general applicable rule is that where time for performance has not been agreed upon by the parties, performance is due immediately on conclusion of their contract or as soon thereafter as is reasonably possible in the circumstances. But the debtor does not fall into mora ipso facto if he fails to perform forthwith or within a reasonable time. He must know that he has to perform. This form of mora, known as mora ex persona, only arises if, after a demand has been made calling upon the debtor to perform by a specified date, he is still in default. The demand, or interpellatio, may be made either judicially by means of a summons or extra-judicially by means of a letter of demand or even orally; and to be valid it must allow the debtor a reasonable opportunity to perform by stipulating a period for performance..." (my emphasis).
The letter which the plaintiff wrote on 3 February 2016, no doubt, drew the defendant's attention to the need on its part to perform. The letter stipulated, for the defendant's benefit, the period for performance. It also spelt out the plaintiff's intention to sue if the defendant did not perform within the period which the plaintiff specified in the letter. In writing as it did, the plaintiff placed the defendant in mora.
Asharia's case (supra) was, or is, more binding on this Court than is Trinity Asset Management (Pty) Ltd v Grindstone Investments 132 (Pty) Ltd [2016] ZASCA 135 (unreported) which the defendant cited in support of its argument on the special plea. The Trinity Asset Management case (supra) was decided in the Supreme Court of Appeal of South Africa. It was, accordingly, of persuasive value only.
The defendant's special plea was, in the court's view, raised as a delay tactic. The defendant could have raised it as an in limine matter at the time that it tendered its plea to the plaintiff's claim. Neither the rules of court nor case authority barred it from adopting the stated procedure - see Nyandoro & Anor v Nyandoro & Ors 2008 (2) ZLR 219 (H). See also I Maja The Law of Contract in Zimbabwe (Maja Foundation, Harare, 2015) at page 147.
The special plea was without merit. It is, accordingly, dismissed with costs.
Mufadza and Associates, plaintiff's legal practitioner
Honey & Blanckenberg, defendant's legal practitioner
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