REPUBLIC OF NAMIBIA

HIGH COURT OF NAMIBIA MAIN DIVISION, WINDHOEK

JUDGMENTCase no: I 836/2011

In the matter between:

NAMIBIA LIQUID FUELS (PTY) LTD PLAINTIFF

and

ENGEN NAMIBIA (PTY) LTD 1ST DEFENDANTSHELL NAMIBIA (PTY) LTD 2ND DEFENDANTCHEVRON NAMIBIA (PTY) LTD 3RD DEFENDANTBP NAMIBIA (PTY) LTD NOW [PUMA ENERGY(NAMIBIA)(PTY)(LTD] 4TH DEFENDANT

Neutral citation: Namibia Liquid Fuels (Pty) Ltd v Engen Namibia (Pty) Ltd (I

836/2011 [2014] NAHCMD 113 (31 March 2014)

Coram: GEIER J

Heard: 31 October 2013Delivered: 31 March 2014

Flynote: Prescription - Extinctive prescription - When operative - Failure to

perform by creditor - Purposes of Prescription Act 68 of 1969 subverted if creditors

allowed by deliberate or negligent acts to delay pursuit of claims without incurring

consequences of prescription – Creditor had failed to timeously pursue its claims for

demurrage in terms of the payment parameters set in terms of an agreement – and

REPORTABLE

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had also through its failure to provide the necessary invoice documentation

prevented its claims from becoming due - Debtors relying on prescription - Creditor

not entitled to rely on own lack of performance to delay commencement of

prescription - Creditor's right to claim damages for demurrage thus having

prescribed.

Contract — Interpretation — the court proceeds firstly to ascertain the common

intention of the parties from the language used in the instrument. Various canons of

construction are available to ascertain their common intention at the time of

concluding the agreement. According to the 'golden rule' of interpretation the

language in the document is to be given its grammatical and ordinary meaning,

unless this would result in some absurdity, or some repugnancy or inconsistency

with the rest of the instrument - The mode of construction should never be to

interpret the particular word or phrase in isolation (in vacuo) by itself - The correct

approach to the application of the 'golden rule' of interpretation - after having

ascertained the literal meaning of the word or phrase in question – is - broadly

speaking, to have regard:

(1) to the context in which the word or phrase is used with its interrelation

to the contract as a whole, including the nature and purpose of the contract;

(2) to the background circumstances which explain the genesis and

purpose of the contract, ie to matters probably present to the minds of the parties

when they contracted.

(3) to apply extrinsic evidence regarding the surrounding circumstances

when the language of the document is on the face of it ambiguous, by considering

previous negotiations and correspondence between the parties, subsequent

conduct of the parties showing the sense in which they acted on the document,

save direct evidence of their own intentions.

In the application of these principles : ‘the four steps of this technique‟ - should not

be “ … paced out in succession with military precision, but must be danced with

some pirouetting and an entrechat or two … “.Ultimately the court should endeavour

to take into account that the phrase in question should be interpreted in such a way „

… which would convey to a reasonable person, having all the background

knowledge which would reasonably have been available to the parties in the

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situation in which they were at the time of the contract… „. and that the so-called

„matrix of fact‟ may include „ absolutely everything which would have affected the

way in which the language of the document would have been understood by a

reasonable man.‟

Summary: The facts appear from the judgment.

ORDER

The plaintiff's claims are dismissed with costs, such costs to include the costs of one

instructed- and one instructing counsel.

JUDGMENT

GEIER J:

[1] The plaintiff, in this action, is seeking to recover, from the defendants, a total

amount of N$ 3 986 461.10, in respect of demurrage charges incurred in the period 1

July 2005 to 28 February 2008, during which NAMCOR Trading (Pty) Ltd supplied

liquid petroleum products to the defendants.

[2] The defendants are all wholesalers of petroleum products who procure their

supply of fuel and petroleum through NAMCOR.

[3] The plaintiff in turn has derived its right, title and interest, to sue defendants,

from NAMCOR, through an assignment of rights, granted in terms of a co-operation

agreement concluded between plaintiff, NAMCOR and SASOL Oil (Pty) Ltd.

[4] Summons in this matter was issued on 29 March 2011 and the first and fourth

defendants were served with process on 31 March 2011, while the second defendant

was served on 30 March 2011.

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[5] The action so instituted was opposed. The case against 3rd defendant was

settled. All the remaining defendants have raised a special plea of prescription.

[6] Subsequently the remaining parties agreed to have this special plea

determined by way of a stated case in terms of Rule 33 of the Rules of Court.

[7] The parties are also agreed that the applicable period of prescription is 3

years in this instance and that prescription would commence to run ‘as soon as the

debt is due’.1

[8] Since the plaintiff’s claim is essentially based on the so-called ‘Main Supply

Terms and Conditions’ – and the plaintiff’s claim is thus based in contract – and as

the special plea will thus - in the main - have to be determined with reference to the

applicable contractual framework and the circumstances it operates in - it is apposite

to firstly sketch these parameters before embarking on the determination of the

parties’ respective cases.

THE OPERATIONAL BACKGROUND

[9] The defendants are all wholesalers of petroleum products, as already

mentioned above. They purchase their supply of petroleum products from Namcor

Trading, whose rights have been assigned to plaintiff. NAMCOR, in turn, purchases

the required petroleum products – that is ‘dual purpose kerosine’, including jet fuel/jet

A1, illuminating paraffin, Diesel, Leaded Petrol 93, Unleaded Petrol 95 and Fuel Oil –

from SASOL.

[10] The liquid fuel products that have been so ordered are then shipped to Walvis

Bay, were the fuel tankers berth, in order to discharge their cargo.

[11] Once the liquid fuel cargo is ready to be unloaded a so-called ‘Notice of

Readiness’ - defined as ‘NOR’ – is given. This notice makes it incumbent on the

defendants to have the cargo unloaded within 36 hours.

1 See sections 10(1), 11(d) and 12(1) of the Prescription Act, Act 68 of 1969

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[12] If the 36 hour period is exceeded, charges for demurrage are incurred at a set

rate.

[13] The ‘Main Supply Terms and Conditions’ regulate this scenario, more

particularly, as follows:

‘9. Laytime and Demurrage

9.1 Laytime

The laytime shall be thirty-six (36) running hours. For part cargo, that proportion of thirty-six

(36) running hours, will apply subject to such further provisions set out in this regard in the

General Terms and Conditions of Sale of Petroleum Products attached as Annexure “A”.

Running hours shall commence, berth or no berth, six (6) hours after Notice of Readiness

(NOR) is given or commencement of discharge of the Petroleum Products, whichever is the

earlier. For the purposes of calculating running hours, discharge of the Petroleum Products

shall be deemed to have been completed upon disconnection of discharging hoses from the

inlet hose connection of the pipeline at the jetty at the discharge port.

9.2 Demurrage

The demurrage rate payable by the Buyer to Seller shall be the amount of US$ 15 500.00

(Fifteen Thousand Five Hundred United States Dollars) per day, pro rata for part cargo.

11. Payment

11.1 Payment terms

All payments for and/or related to the sale of the Petroleum Products in terms of these Main

Supply Terms and Conditions shall be made in Namibian dollars within twenty (20) days

from tender of NOR (NOR in this instance to count as day one). All payments shall be by

telegraphic transfer into the Seller’s nominated bank account as set out in 11.4 below, which

shall be made against presentation by the Seller of the Seller’s original commercial invoice

and the relevant outturn quantity certificates.

11.2 Invoice documentation

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The Seller shall deliver to the Buyer at the Buyer’s office, the original commercial Invoice

and quantity certificates at least two (2) banking days prior to date of payment at 10h00

Namibian time. In the event that the document does not arrive within two (2) days prior to

payment date, then payment shall be made within two (2) days of receipt of the’ document.’

THE CASE OF THE DEFENDANTS

THE FIRST DEFENDANT’S CASE

[14] The relevant parts of the heads of argument submitted on behalf of first

defendant read as follows:

‘Plaintiff’s claim against first defendant is for N$ 1, 764, 088.56 to recover demurrage

plaintiff incurred “…in the performance of its obligation to deliver liquid fuel products to the

defendants.” Plaintiff alleges it already paid the demurrage. It does not say when or to

whom.

According to the ‘document’ issued by plaintiff to first defendant demurrage which plaintiff

attempts to recover was incurred during the periods 1 July 2005-30 June 2006, 1 July 2006-

30 June 2007 and 1 July – 28 February 2008. The document is dated 31 March 2008. The

total amount of the document is N$ 3, 114, 993.20.

Plaintiff bases its claim on clause 9.2 of the Main Supply Terms and Conditions (the

agreement) annexed as annexure A to its Declaration.

NOR (notice of readiness) referred to in clauses 9.1 & 11.1 of the agreement is the notice of

readiness to discharge cargo given by the master of the vessel when it arrives at the

discharge port.

Clause 9.1 of the agreement implies that demurrage in respect of each vessel is incurred

when the running hours (which commences six hours after NOR) exceeds the lay time of 36

running hours.

Clause 9.2 of the agreement determines the demurrage rate as US$ 15, 500.00 per day.

Clause 11.1 of the agreement stipulates that all payments for and/or related to the sale of

the Petroleum Products shall be made within 20 days from tender of NOR (NOR in this

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instance to count as day one) … and shall be made against presentation by the Seller of its

original commercial invoice and the relevant outturn quantity certificates for the product

delivered.

Clause 11.2 of the agreement stipulates that the Seller shall deliver to the buyer the original

invoice at least 2 days prior to date of payment. In the event the document does not arrive 2

days prior to payment date then payment shall be made 2 days of receipt of the document.

When did plaintiff’s claim become due?

Section 12(1)(c) of the Prescription Act, 1969 (Act 68 of 1969) (the Act) stipulates

“….prescription shall commence to run as soon as the debt is due.”

The words ‘debt is due’ must be afforded their ordinary meaning. There must be a debt

immediately claimable.2 All that is necessary for the debt to become due are the minimum

facts for the plaintiff to begin with it.

The Act envisages finality and certainty of claims and the determination of the period of

prescription should not be left in the hands of the person against whom it would run.3

It is also accepted that a debt to perform contractual obligations becomes due in accordance

with the contract.4 Interpretation of the contract will show when prescription starts. The

general rules are:

When no date for performance is agreed upon performance is due on conclusion of the

contract or as soon thereafter as is reasonably possible under the circumstances.

A demand is necessary to put a debtor in mora where the contract does not contain an

express or tacit stipulation when a particular performance is due.5

Ultimately as a general proposition the debt is due when the creditor’s cause of action is

complete. This occurs when the creditor is in a position to claim payment forthwith and the

debtor does not have a defence to the claim for immediate payment.6

2 Van Reenen v Santam Ltd 2013 (5) SA 595 (SCA) at para [12]. See also Wellmann v Hollard Insurance Co of Namibia Ltd 2013 (2) NR 568 (HC) at para [65] 3 Charny, H, & Co (Pty) Ltd v Segall & Matheson Properties 1995 NR 148 (HC)

4 CHRISTIE THE LAW OF CONTRACT IN SA 6th ed p 505. 5 LAWSA Vol 5(1) 2nd ed replacement volume CONTRACT para 466. A demand is a notice calling upon the debtor to perform.6 LAWSA Vol 21 2nd ed PRESCRIPTION para 125.

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It is submitted that plaintiff was in the position to claim payment immediately the moment

demurrage was incurred in respect of a particular vessel. At best for plaintiff the debt in

respect of each vessel became due in terms of clause 11.1 of the agreement within 20 days

from NOR in respect of each vessel.

The issue of an invoice (as is taxing an attorney’s bill of costs) is not a prerequisite to the

institution of legal proceedings.7 Making the issue of an invoice such a prerequisite will

enable the creditor to determine – as it attempts to do here – when prescription commences.

In this matter it will enable plaintiff to persist with claims that exist since 2005!

In addition the document annexed marked ‘E’ to the stated case is not an invoice as

contemplated in clauses 11.1 & 11.2 of the agreement. The agreement refers to ‘…(s)eller’s

original commercial invoice and the relevant outturn quantity certificate.’ Annexure E is at

best a summary of transactions. It does not have an invoice number. It reflects (without

identifying the vessels):

Demurrage cost for the period 1 July 2005 - 30 June 2006 – NOR 31 March 2008;

Demurrage cost for the period 1 July 2006 - 30 June 2007 – NOR 31 March 2008;

Demurrage cost for the period 1 July 2007 – 28 February 2008 – NOR 31 March 2008.

The NOR date on annexure ‘E’ is clearly wrong. By its very nature it should pre-date the

demurrage claim. This document is clearly not ‘a commercial invoice’ as contemplated in the

agreement.

As a result it is submitted that prescription should be taken to run from actual NOR in respect

of each vessel for which demurrage is claimed. This is customary in demurrage claims.

Alternatively and at best for plaintiff prescription could be taken to commence 20 days from

actual NOR in respect of each vessel as stipulated in clause 11.1 of the agreement.

On a generous interpretation of plaintiff’s case the last conceivable NOR is 28 February

2008. That means the last demurrage claim prescribed either on 1 March 2011 or on 21

March 2011. It is agreed summons was served on first defendant on 31 March 2011.

Plaintiff’s claim against first defendant should be dismissed with costs.’

7 Benson & Another v Walters & Others [1984] 1 All SA 283 (A) at 291. See also: Western Bank LTD v SJJ Van Vuuren Transport (Pty) Ltd & Others [1980] 3 All SA 562 (T) at p 566.

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[15] During oral argument, Mr Coleman, who argued first defendant’s case - in

anticipation of plaintiff’s argument, 8 submitted with reference to Phasha v Southern

Metropolitan Local Council of the Greater Johannesburg Metropolitan Council 9, that

a plaintiff should not be able to delay the running of prescriptive periods through his

own inaction, such as through the delaying of the issuing of an invoice, and thereby

avoid the consequences of prescription. In this regard it was submitted further that

the invoice relied upon in this instance, in any event, was not a proper invoice as it

lacked certain detail, such as the name of the ship, meter readings and actual

quantities of fuel off-loaded etc.

[16] He referred the court to what was said by Satchwell J in this regard in

Phasha, were the learned judge stated:

‘Considerations of policy require that a creditor should not be able to rely on his own

failure to perform in order to delay the running of prescription. This policy consideration has

been stated as follows: 'A creditor is not able by his own conduct to postpone the

commencement of prescription.' (Benson and Another v Walters and Others 1981 (4) SA 42

(C) at 49G and the authorities cited therein.) ‘ 10

[17] And where the court went on to state11 :

‘In the majority of these cases (Mostert (supra)12; Lamprecht13 (supra); Mahomed

(supra)14; Van Vuuren (supra)15; Lydenburg (supra)16; Langeberg Ko-operasie (supra))17 the

predecessors to the 1969 Prescription Act were of application and the Courts were

concerned with the date 'on which the right of action first accrued against the debtor' which,

to my mind, is a different question to the question as to when 'the debt is due'. In the majority

8 which placed reliance on the payment and invoice terms of the ‘Main Supply Terms and Conditions’ - in order to overcome the hurdle of prescription – as the so-called ‘commercial invoice’ - issued in this instance - was dated 31 March 2008 – and – which would, on the plaintiff’s interpretation, have to be paid on 2 April 2008 only and as summons was served already on 31 March 2011, the plaintiff’s claim had thus not prescribed -9 2000 (2) SA 455 (W)10 at 469 E11 At 472D to 473J12 Mostert v Mostert 1913 TPD 25513 Lamprecht v Lyttelton Township (Pty) Ltd 1948 (4) SA 526 (T)14 Mahomed v Yssel and Others 1963 (1) SA 866 (D)15 Van Vuuren v Boshoff 1964 (1) SA 395 (T)16 Lydenburg Voorspoed Ko-operasie v Els 1966 (3) SA 34 (T)17 Standard Finance Corporation of South Africa Ltd (in Liquidation) v Langeberg Ko-operasie Bpk 1967 (4) SA 686 (A)

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of these cases (Mostert (supra); Lamprecht (supra); Van Vuuren (supra); Mahomed (supra);

Lydenburg (supra); Langeberg (supra); Benson (supra)) the decision as to when prescription

had commenced to run was not based on policy considerations but on the finding that the

cause of action was complete without demand or performance by the creditor or that the

debt was due without demand or performance by the creditor.

I would be as reluctant to import into our law an entirely new approach to the law of

prescription as I am to see the negligent creditor, in this case the applicant, seek and be

granted a shield against prescription which shield is based entirely upon his own default.

However, such innovation on my part is not necessary. In Uitenhage Municipality v Molloy

(supra)18 Mahomed CJ utilised 'an alternative approach' which resulted in the conclusion

that, even if the debt claimed by the respondent was not 'due' until certain conditions had

been satisfied and even if none of those conditions were in fact satisfied, the case of the

respondent must fail '. . . because he himself failed to take or initiate any steps to procure

the satisfaction of any of these conditions' (at 743B).

The respondent brought an action in terms of the Basic Conditions of Employment Act for

remuneration for work performed on Sundays and in respect of overtime. A special plea

contending prescription was filed. It was held that prescription had commenced to run from

the end of the relevant month in which the work had been performed. It was further held that

the respondent had not been precluded from serving process claiming payment of the debts

in order to interrupt prescription. Certificates required in terms of the Employment Act were

only required to be produced in Court and nothing precluded the employee from instituting

proceedings for the recovery of the moneys claimed.

In commenting upon the contention that an employer's debt ceased to be 'due' for the

purposes of s 12(1) of the Prescription Act merely because some procedural conditions had

to be satisfied before the debt is recoverable, the Chief Justice commented (at 741E):

'(I)f that contention was correct the employee concerned could simply wait for up to

twenty years before seeking to fulfil for the first time any of the conditions specified in s 30(3)

of the Employment Act',

and went on to comment on the anomalous position in which such an employer would find

itself.

It was this anomaly which the Court found to support an alternative approach. On the

assumption that the respondent's claims against the appellant only became 'due' within the

meaning of s 12(1) of the Prescription Act after one of the conditions in the Employment Act

was satisfied, the Court asked the question '. . . can he rely on the fact that they were not so

18 1998 (2) SA 735 (SCA)

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satisfied if he himself took no steps to procure such satisfaction?' (At 741H.) The answer of

the Supreme Court of Appeal was in the negative. The condition was one which could easily

be satisfied on the initiative of the employee himself and an employee who elects not to

apply for such a certificate cannot contend that his or her claim was not 'due' because such

a certificate had not been issued. 'The remedy lies in the employee's own hands. Such an

employee cannot profit by his or her own inaction.' (At 742B.)

To my mind, this approach is one which should be adopted in the present case. The

applicant has since 1985 failed to make payment of the deposit which was to be paid upon

signing of the leasehold agreement and has failed to make payment or to tender payment of

the balance of the purchase price. That failure may have been occasioned by many

circumstances, not least financial difficulty or business uncertainty. Those circumstances

are, however, neither the concern of this Court nor exceptions from prescription in terms of

either the leasehold agreement or the Act. For a period of some 13 years the applicant has

failed to perform and he now seeks to rely upon his own lack of conduct to postpone the

commencement of prescription. It is the applicant who has refrained from satisfying the very

reciprocal conditions which would render the debt of the respondent, namely the obligation

to register the right of leasehold in the relevant deeds registry, due and payable.

The rationale for this approach is clear. It has been stated in the earlier cases to which I

refer. In Molloy (supra) the Court referred to an employee who, fearing that a claim may be

defeated in Court by the production of the employer's records, could wait to pursue his

claim until the records had been destroyed in terms of the Employment Act. Similarly, a

purchaser of immovable property may seek to delay taking transfer thereof whilst property

prices are low or the value of land is uncertain but then seek to take transfer of the property

once a township has been proclaimed or an economic boom is underway. In the present

instance, it would appear that the applicant failed to make arrangements to secure

registration of the right of leasehold together with improvements on stand 11900, Orlando,

Soweto, which was, in 1985, valued by the contracting parties at R228 222 but which

appears in 1998 to have a commercial value considerably in excess thereof.’

[18] Principally Mr Coleman however argued that the ‘Main Supply Terms and

Conditions’ should be interpreted in such a manner that clause 11.2 was irrelevant to

the determination of when prescription would start to run as clause 11.2 merely

regulated the payment terms and did not determine when the debt in this case would

become due. This aspect, so the argument ran, was governed by the 20 day period

set by clause 11.1. In any event, and in terms of the contra preferentem rule, the

contract should also be interpreted in the defendants’ favour. On such an

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interpretation the plaintiff’s cause of action was already complete after the effluxion

of the 20 day period set in clause 11.1 as the plaintiff was at that stage already in the

position to claim payment forthwith from the defendants. The plaintiff’s claim had

thus prescribed.

[19] It should further be mentioned that he also pointed out, with reference to the

civil method of calculating the prescriptive period,19 that, on plaintiff’s own version,

the claim might in any event already have become prescribed.

THE SECOND AND FOURTH DEFENDANTS CASE

[20] In the salient parts of the written heads of argument, filed on behalf of second

and fourth defendants, the following further arguments were raised:

‘The plaintiff claims that the second and fourth defendants are indebted to it for

demurrage (Damages) charges in relation to the discharge of petroleum products as follows:

Second Defendant:

1.1.1. Demurrage for period 01 July 2005 – 30 June 2006:

Invoice Date: 31/03/2008: Amount: N$628,295.

1.1.2. Demurrage for period 01 July 2006 – 30 June 2007:

Invoice Date: 31/03/2008: Amount: N$1,294,122.

1.1.3. Demurrage for period 01 July 2007 – 28 February 2008: Invoice Date:

31/03/2008: Amount: N$166,885.

Fourth Defendant:

1.1.4. Demurrage for period 01 July 2005 – 30 June 2008:

Invoice Date: 31/03/2008: Amount: N$708,196:

1.1.5. Demurrage for period 01 July 2006 – 30 June 2007:

Invoice Date: 31/03/2008: Amount: N$1,176,304.

19 Section 4 of the Interpretation of Laws Proclamation 37 of 1920 provides as follows : 'When any particular number of days is prescribed for the doing of any act, or for any other purpose, the same shall be reckoned exclusively of the first and inclusively of the last day, unless the last day shall happen D to fall on a Saturday or on any other day appointed by or under the authority of a law as a public holiday, in which case the time shall be reckoned exclusively also of every such Sunday or public holiday.'

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1.1.6. Demurrage for period 01 July 2007 – 28 February 2008: Invoice Date:

31/03/2008: Amount: N$165,050.

Demurrage

A voyage charterer must bring a cargo alongside and load it at the port of loading and

unload it at the port of discharge, if no time is stipulated in the charter for loading or

unloading, within a reasonable time, or, if times for these operations have been stipulated in

the charter, within the agreed times. What constitutes a reasonable time is a question of fact,

depending on, amongst other things, the existing, as opposed to normal, circumstances at

and customs of the port. Failure to fulfil these obligations within the time period, even if for

reasons beyond the charterer’s control, results in the party responsible for the default, either

in the circumstances, or by law, being liable for the payment of demurrage, or damages for

detention. Early completion of these operations may be incentivised by the payment of

“despatch money”20.

Prescription

Section 10(1) of The Prescription Act21 states the following:

“(1) Subject to the provisions of this Chapter and of Chapter IV, a debt shall be

extinguished by prescription after the lapse of the period, which in terms of

the relevant law applies in respect of the prescription of such debt.”

Section 12 of this Act goes on to state:

“(1) Subject to the provisions of subsections (2) and (3), prescription shall

commence to run as soon as the debt is due.

(2) If the debtor wilfully prevents the creditor from coming to know of the

existence of the debt, prescription shall not commence to run until the creditor

becomes aware of the existence of the debt.

(3) A debt which does not arise from contract shall not be deemed to be due until

the creditor has knowledge of the identity of the debtor and of the facts from

which the debt arises: Provided that a creditor shall be deemed to have such

knowledge if he could have acquired it by exercising reasonable care.”

Our Courts have held the following, to be a general proposition in regard to extinctive

prescription.

1.2. The prescriptive periods commence to run '. . . as soon as the debt is due'22;

1.3. The 'debt' must be immediately claimable by the creditor in legal proceedings, and be

20 See Laws of South Africa (LexisNexis) – volume 25(2) Second Edition Volume page 114 and the authorities collected there.21 Act 68 of 1969 22 Wellman v Hollard Insurance Co of Namibia Ltd 2013 (2) NR 568 (HC) at 582[75]

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one in respect of which the debtor is under an obligation to perform immediately23;

1.4. Contractual debts are generally subject to a three-year prescriptive period24.

The words ‘debt is due’ must be afforded their ordinary meaning. There must be a debt

immediately claimable.25 All that is necessary for the debt to become due are the minimum

facts for the plaintiff to begin with it.

The Act envisages finality and certainty of claims and the determination of the period of

prescription should not be left in the hands of the person against whom it would run.26

In the Charny and Co case supra, the Court was asked to determine when prescription had

started to run in respect to an improvements claim by a lessee. In this case the lessee had

waited for the termination of the lease agreement before instituting his claim for

improvements, seemingly the Court held that because a lessee’s lien operates over the

improved property until due compensation for the improvements, does not mean that the

lessee will be entitled to successfully claim compensation in the normal course for the cost of

renovations that were conducted more than three years prior to the date of claim. The Court

when on to hold that; “There is therefore no reason in logic and/or in fairness why the

accrual of the right to claim compensation should be postponed until the date of termination

of the lease”27.

It is submitted that the above is authoritive for the proposition that as soon as the creditor

reasonably knows that the debt is due, the extent of the debt and that he is entitled to claim

payment of the debt, then prescription will begin to run.

It is also accepted that a debt to perform contractual obligations becomes due in accordance

with the contract.28 Interpretation of the contract will show when prescription starts. The

general rules are:

a) When no date for performance is agreed upon performance is due on conclusion of

the contract or as soon thereafter as is reasonably possible under the circumstances.

b) A demand is necessary to put a debtor in mora where the contract does not contain

an express or tacit stipulation when a particular performance is due.29

23 Wellman supra at 582[76]24 Wellman supra at 582[78]25 Van Reenen v Santam Ltd 2013 (5) SA 595 (SCA) at para [12]. See also Wellman supra at para [65] 26 H Charny & Co (Pty) Ltd v Segall & Matheson Properties 1995 NR 148 (HC) at 164A

27 163B-J28 Christie The Law of Contract in SA 6th ed p 505. 29 LAWSA Vol 5(1) 2nd ed replacement volume CONTRACT para 466. A demand is a notice calling upon the debtor to perform.

15

Therefore ultimately as a general proposition the debt is due when the creditor’s cause of

action is complete. This occurs when the creditor is in a position to claim payment forthwith

and the debtor does not have a defence to the claim for immediate payment.30

Extinctive prescription under the 1969 Prescription Act may be interrupted in two ways,

namely, by the express or tacit acknowledgment of liability by the debtor, or by means of

judicial interruption.31

The Facts

We submit that it is quite obviously the plaintiff’s case that it suffered / incurred damages in

that it became liable to pay demurrage between 1 July 2005 and 28 February 2008 in the

discharge of its obligations to the defendants.

The plaintiff was fully apprised of quantum of these damages in respect to each and every

vessel and would immediately be in a position, upon receiving the NOR from each of the

various vessels to determine the amount of demurrage that would be due and payable (if

any) in terms of clause 9.1 of the agreement. It is submitted that the ease of the calculation

in respect to each vessel can be demonstrated as follows:

1.5. The NOR is handed over to the plaintiff and six hours later the Running Hours

Commence;

1.6. The Running Hours continue for thirty six hours;

1.7. Demurrage becomes payable after the expiry of the contractually agreed Running

Hours;

1.8. The running hours will only be deemed to be completed when the discharge hoses

are disconnected from the defendants inlet hose on the jetty;

1.9. Demurrage is payable at U$15,500.00 per day pro rata for part cargo. It is submitted

that the reference to pro rata is in fact a reference to the fact that all of the

defendants had various quantities of petroleum products on a single vessel.

Therefore the pro rata reference to demurrage is pro rata to the volume of each

defendant’s petroleum product.

1.10. Therefore the plaintiff would, as soon as the hoses were disconnected be able to

immediately and with a very simple calculation be able to ascertain exactly what each

defendant was liable for in respect to demurrage. It is then, in our submission, when

prescription began to run.

Therefore in terms of clause 11.1 of the agreement the best the plaintiff can rely on is that

payment was due and payable to it by the defendants 20 days after the NOR was issued. If it 30 LAWSA Vol 21 2nd ed PRESCRIPTION para 125.31 LAWSA Vol 21 2nd ed PRESCRIPTION para 128.

16

is to be accepted that the last NOR was handed to the plaintiff on 28 February 2008, then

the very last of the demurrage payable in accordance with the plaintiff’s claim would have

been 20 days later, on Wednesday 19 March 2008 (bearing in mind that February had 29

days in 2008 and not 28).

We further submit that it is impossible for a NOR to post date the period of discharge that the

NOR relates to. The NOR always precedes the offloading of cargo.

Having regard to the agreement at clause 11.1 it is quite simple to determine the parties’

intention regarding when a claim would be due, payable and enforceable. In terms of the

agreement it is clear the plaintiff’s would have a completed cause of action 20 days after any

NOR. It is quite clear from the words of the clause that this would accrue automatically and it

would not be necessary for any form of demand.

Summons was served on the second and fourth defendants on

31 March 2011. Therefore the action was instituted 13 days after the very last cause of

action prescribed.

The issue of an invoice is not a prerequisite to the institution of legal proceedings.32 Making

the issue of an invoice such a prerequisite will leave the creditor in a position to determine

when prescription starts to run and will negate the purpose and object of the act, which

envisages finality and certainty of claims. The determination of the period of prescription

should not be left in the hands of the plaintiff to determine, as this will be contrary to the Act.

Conclusion

The plaintiff’s very latest claim prescribed on 19 March 2008. This claim was not interrupted

prior to action being instituted. Thus action was instituted

13 days after the claim had become extinct. Therefore plaintiff’s claim against the second

and fourth defendant should be dismissed with costs.’

[21] Ms Schimming-Chase, who appeared with Mr Ravenscroft-Jones, on behalf of

second and fourth defendants, essentially associated herself with Mr Coleman’s

submissions. She pointed out though that also the additional two days, afforded for

payment, in terms of clause 11.2, would not rescue the plaintiff’s case as the plaintiff

had failed to establish when the actual NOR’s, in this instance, had been given and

that on the basis of the stated case, in terms of which it had to be accepted that NOR

must have preceded the off-loading of cargo - and were it was thus impossible for a

NOR to post- date the period of discharge - the 20 day period prescribed, in clause

11.1 would have expired on the 19 th of March 2008, alternative two days later, in

32 Benson and Another v Walters and Others [1984] 1 All SA 283 (A) at 291. See also: Western Bank Ltd v SJJ van Vuuren Transport (Pty) Ltd and Others [1980] 3 All SA 562 (T) at p 566.

17

terms of clause 11.2, which showed that the debt, which the plaintiff was trying to

enforce had become due – at best for the plaintiff - on those dates, which claim had

thus become prescribed by the time that summons was served on 30 and 31 March

2011 respectively.

THE PLAINTIFF’S CASE

[22] For the plaintiff the main submissions ran as follows:

‘Recently, in Claasen v Bester 2012 (2) SA 404 (SCA), it was stated:

[12] I do not propose to discuss the many cases that have dealt with the question

when prescription begins to run for the purposes of ss 12(1) and (3) of the Prescription Act.

The most pertinent suffice. In Drennan Maud & Partners v Pennington Town Board 1998 (3)

SA 200 (SCA) ([1998] 2 All SA 571) at 212F – J Harms JA, in a separate concurring

judgment, said

'In short, the word debt does not refer to the cause of action, but more generally to

the claim. . . . In deciding whether a debt has become prescribed, one has to identify the

debt, or, put differently, what the claim was in the broad sense of the meaning of that word.'

Further, in paragraph [13] the Supreme Court of Appeal stated:

[13] In Truter and Another v Deysel 2006 (4) SA 168 (SCA) para 16 this court said

that:

'A debt is due in this sense when the creditor acquires a complete cause of action for

the recovery of the debt, that is, when the entire set of facts which the creditor must prove in

order to succeed with his or her claim against the debtor is in place or, in other words, when

everything has happened which would entitle the creditor to institute action and to pursue his

or her claim.'

Truter dealt with a claim in delict. Bester argued that claims in contract may be

different, and relied on Van Staden v Fourie 1989 (3) SA 200 (A) ([1998] 2 All SA 571) at

216F – G where the court left open the question whether the nullity of a contract (a legal

conclusion) was a fact for the purpose of s 12 of the Prescription Act. But in Truter (para 20)

Van Heerden JA said also:

'Section 12(3) of the Act requires knowledge only of the material facts from which the

debt arises for the prescriptive period to begin running — it does not require knowledge of

the relevant legal conclusions (ie that the known facts constitute negligence) or of the

existence of an expert opinion which supports such conclusions.'

18

And in paragraph [16], the Supreme Court of Appeal stated:

[16] It is thus clear that prescription began to run on 3 March 2004, when Bester

knew that no provision as to the price at which he could buy back the farm from Claasen had

been included in the deed of sale. That he believed nonetheless that the provision was

enforceable is not relevant. And attempts to register the 'special conditions' in the deed of

sale against the title deeds by the legal representatives of both parties are also of no

consequence.

Also: John Saner: Prescription in South African Law, LexisNexis, Service Issue 19, 2012, pp

3-49 and 3-55,

It is trite law that prescription in terms of the 1969 Act begins to run not necessarily when the

debt arises, but only when it becomes due. In short, (a) debt must be immediately

enforceable before it can be claimed.

John Saner: Prescription in South African Law, op. cit., p. 3-46 and 3-47.

Saner, the leading authority on prescription has this to say:

“Although it is true that, in many cases, the date upon which a debt ‘becomes due’ might

also be the date upon which it ‘arose’, that is obviously not true of all cases. There is a vital

difference in concept between the coming into existence of a debt and the recoverability

thereof.”

John Saner: Prescription in South African Law, op. cit. p. 3-46.

In HMBMP Properties (Pty) Ltd v King 1981 (1) SA 906 (N) at 909C-E the Court stated that:

‘ … in its ordinary meaning a debt is "due" when it is immediately claimable by the

creditor … A debt can only be said to be claimable immediately if the creditor has the right to

immediately institute an action for its recovery. In order to be able to institute action for the

recovery of a debt the creditor must have a complete cause of action in respect of it.’

In Deloitte Haskins & Sells Consultants (Pty) Ltd v Bowthorpe Hellerman Deutsch (Pty) Ltd

1991 (1) SA 525 (A) at 532, the Appellate Division stated:

19

‘Section 12(1) of the Prescription Act 68 of 1969 provides that 'prescription shall

commence to run as soon as the debt is due'. This means that there has to be a debt

immediately claimable by the creditor or, stated in another way, that there has to be a debt in

respect of which the debtor is under an obligation to perform immediately. See The Master v

I L Back & Co Ltd and Others 1983 (1) SA 986 (A) at 1004, read with Benson and Others v

Walters and Others 1984 (1) SA 73 (A) at 82. It follows that prescription cannot begin to run

against a creditor before his cause of action is fully accrued, ie before he is able to pursue

his claim (cf Van Vuuren v Boshoff 1964 (1) SA 395 (T) at 401).’

The difference between “when a debt arises” and “when a debt becomes due” was

discussed in Stockdale v Stockdale 2004 (1) SA 68 (C) paragraph [13] at 72F-H where the

Supreme Court of Appeal33 stated:

[13] It is clear that in determining when a debt arises and when it becomes due

(opeisbaar) different concepts are concerned. A distinction needs to be made between 'the

coming into existence of the debt on the one hand and recoverability thereof on the other'

(List v Jungers 1979 (3) SA 106 (A) at 121C - D.) The stage when a debt become

recoverable, and therefore due in the sense in which the Act speaks of it, has been

described as follows in Deloitte Haskins & Sells Consultants (Pty) Ltd v Bowthorpe

Hellerman Deutsch (Pty) Ltd 1991 (1) SA 525 (A) at 532H:

'(T)here has to be a debt immediately claimable by the creditor or stated in another

way, that there has to be a debt in respect of which the debtor is under an obligation to

perform immediately.'

Clearly then it is essential to determine the intention of the parties as regards 'immediate'

payment of the debt.’

In the present case Plaintiff maintains that the claim for payment became due when the

invoice was issued. The leading case on the debt becoming due after the invoicing is

Sto(c)kdale and Another v Stockdale 2004 (1) SA 68. The plaintiffs (appellants) had loaned a

certain amount of money to the defendant (respondent) to settle an existing bond with a

bank. In 1991 the defendant had signed two acknowledgements of debt for the loan. The

notice to repay the laon was given in 2000 and summons was issued shortly thereafter. The

Court on appeal had to decide whether in the light of the specific terms of the

acknowledgments of the debt, and the relevant background circumstances, prescription

began running on the debts immediately (that is with effect from 1st February 1991) or

33 Actually the Cape Provincial Division

20

whether “notice” was necessary for prescription to commence running, Traverso AJP stated,

in paragraph [2] at p. 72D-E:

‘[12] Section 12(1) of the Act expressly requires that a debt be 'due' before

prescription begins to run. When a debt becomes due should, on the one hand be

determined by the intention of the parties. There are dicta, referred to by Mahomed CJ in

Uitenhage Municipality v Molloy 1998 (2) SA 735 (SCA) at 741A, which suggest 'that a debt

becomes ''due'' when the creditor acquires the right to institute action or when the creditor

has ''a complete cause of action'' in respect of such debt'.

Stockdale and Another v Stockdale 2004 (1) SA 68 at 72D-E.

The Court observed that it was a general rule of law that in all obligations in which a time for

payment was not agreed upon the debt was due forthwith. The Court stated that this rule

may, however, be qualified in the light of the particular circumstances of a case. The Court

concluded that in that case the parties intended that repayment be made within 30 days of

the notice by the plaintiff.

Stockdale and Another v Stockdale 2004 (1) SA 68 paragraphs [15] and [16] at p. 73A/B-B

and E/F-F

The Court referred to notice in paragraph [19] at p. 74F-G as follows:

‘The peculiar circumstances of this matter are such that notice was in fact necessary for the

running of prescription to commence; this was made only by way of letter dated 24 October

2000.’

In the present case the intention of the Parties that the debt become due is reinforce(d) by

the practice of the parties. Thus, the practice complies with the provisions of Clause 11.2 of

the Main Supply Terms and Conditions.

The running of prescription was interrupted by the service of the summons on the

Defendants on 30 March 2011.

Prescription Act No. 68 of 1969, section 15(1).

Plaintiff respectfully submit that the special plea be dismissed with costs, the costs

consequent to the employment of one instructing Counsel and two instructed Counsel.’

21

[23] Mr Narib, who appeared with Mr Akwenda, contended during oral argument

on behalf of plaintiff that, on a literal interpretation of clauses 11.1 and 11.2 of the

‘Main Supply Terms and Conditions’, as read with clause 9, it was clear that the debt

became due when the conditions set there had been met. The invoice was dated 31

March 2008. Clause 11.2 only required payment within 2 days after the seller had

delivered to the buyer such invoice. Delivery of the invoice took place on 31 March

2008. At the earliest the debt thus became due on 2 April 2008 . Service of summons

on 30 and 31 March 2011 thus interrupted the running of prescription before the

expiry of the applicable three year period.

[24] He tried to distinguish Phasha’s case, on the facts, from the present one,

(were the meaning of the governing contractualo terms were clear) as in Phasha, the

meaning of the underlying agreement, was ambiguous. He re-iterated that his client

continued to rely on the Stockdale decision as the ‘Main Supply Terms and

Conditions’ were not silent on the method of payment.

[25] The special plea of prescription should thus be dismissed.

THE NEED TO INTERPRET THE ‘Main Supply Terms and Conditions’

[26] This court, in Wellmann v Hollard Insurance Co of Namibia Ltd, 34 has

recently summarized the applicable position as follows:

‘[75] In respect of any one of these causes of action the prescriptive periods

commence to run '. . . as soon as the debt is due'.35

[76] This means that the 'debt' must be immediately claimable by the creditor in legal

proceedings,36 and be one in respect of which the debtor is under an obligation to perform

immediately.’ 37

34 2013 (2) NR 568 (HC) at [75] – [76], see also Van Reenen v Santam Ltd 2013 (5) SA 595 (SCA) at para [12] and Benson and Another v Walters and Others 1984 (1) SA 73 (A) at 8235 Deloitte Haskins & Sells Consultants Pty Ltd v Bowthorpe Hellerman Deutsch Pty Ltd 1991 (1) SA 525 (A) at 532G – I, See also : Jansen Van Vuuren v Namibia Water Corporation Limited 2006 (2) NR 607 (LC) at 611 36 See for instance Santam Ltd v Ethwar 1999 (2) SA 244 (SCA) ([1999] 1 All SA 252) at 252I – J37 HMBMP Properties (Pty) Ltd v King 1981 (1) SA 906 (N) at 909D – E; The Master v IL Back & Co Ltd and Others 1983 (1) SA 986 (A) at 1004F – G; and Uitenhage Municipality v Molloy 1998 (2) SA 735 (SCA) ([1998] 1 All SA 140) at 741A

22

[27] The parties also accept that in the realms of the law of contract it are the

contractual obligations which determine when, for purposes of determining

prescription, ‘a debt becomes due’, ie. ‘when the contractual obligations imposed by

an agreement become claimable in legal proceedings, by the one party against the

other, and, in respect of which, the other is under an immediate obligation to

perform38, or put differently, when the creditor acquires a complete cause of action

for the recovery of the debt, that is, when the entire set of facts which the creditor

must prove, in order to succeed with his or her claim, against the debtor is in place

or, in other words, when everything has happened which would entitle the creditor to

institute action and to pursue his or her claim39.'

THE APPLICABLE TEST TO INTERPRETATION

[28] In the present matter the parties are however not agreed on the interpretation

that should be given to the governing contractual framework with reference to which

it will have to be decided, for purposes of determining the plea of prescription, when,

in this case, ‘the debt’, which the plaintiff is trying to enforce, has become due.

[29] The applicable clauses of the ‘Main Supply Terms and Conditions’ thus

require interpretation.

[30] This exercise, in turn, is governed by the principles, as adopted in Dune Consulting (Pty) Ltd v Ongopolo Mining Ltd 40, and where the court stated ::

‘[67] I respectfully agree with and will adopt the approach formulated by the South

African Appellate Division in the referred to decision of Coopers and Lybrand v Bryant 41 at

768 A – E.42 In the application of these principles I am also mindful of what Professor RH

38 Deloitte Haskins & Sells Consultants Pty Ltd v Bowthorpe Hellerman Deutsch Pty Ltd at p53239 Truter and Another v Deysel at [16]40 High Court Case ((P) 3549/2008) [2011] NAHC 272 (21 September 2011) reported on the SAFLII web-site at http://www.saflii.org/na/cases/NAHC/2011/272.html 41 1995 (3) SA 761 (A) ([1995] 2 All SA 635)42 Cited with approval also by the Supreme Court of Appeal in a string of cases – See for instance : Gardner & Another v Margo 2006 (6) SA 33 (SCA) at [25]; Southernport Developments (Pty) Ltd v Tansnet Ltd 2005 (2) SA 202 (SCA) at [10] and Metcash Trading Ltd v Credit Guarantee Insurance

23

Christie has so elegantly put in that regard, namely that : „the four steps of this technique‟ -

(ie. the four steps of the technique as formulated in the Coopers & Lybrand case at 768 A-E)

- should not be “ … paced out in succession with military precision, but must be danced with

some pirouetting and an entrechat or two … “.43 Ultimately I will endeavor to take into

account that the phrase in question should be interpreted in such a way „ … which would

convey to a reasonable person, having all the background knowledge which would

reasonably have been available to the parties in the situation in which they were at the time

of the contract… „. I also agree that the so-called „matrix of fact‟ as formulated by Lord

Wilberforce may include „ absolutely everything which would have affected the way in which

the language of the document would have been understood by a reasonable man.‟ In this

regard I also wish to indicate my respectful agreement with Lord Hoffmannn’s summary

formulation in Lloyds of London Underwriting Syndicates 969,48,1183 and 2183 v Skibya

Property Investments (Pty) Ltd.’ 44

[31] The so adopted approach, was formulated by Joubert JA, in the Coopers &

Lybrand decision45 as follows:

‘The matter is essentially one of interpretation. I proceed to ascertain the common

intention of the parties from the language used in the instrument. Various canons of

construction are available to ascertain their common intention at the time of concluding the

cession. According to the 'golden rule' of interpretation the language in the document is to be

given its grammatical and ordinary meaning, unless this would result in some absurdity, or

Corporations of Africa Ltd were Southwood AJA also analysed this approach with reference to the interpretation of the policy of insurance and stated the approach as follows: “According to our law ... a policy of insurance must be construed like any other written contract so as to give effect to the intention of the parties as expressed in the terms of the policy, considered as a whole. The terms are to be understood in their plain, ordinary and popular sense unless it is evident from the context that the parties intended them to have a different meaning, or unless they have by known usage of trade, or the like, acquired a peculiar sense distinct from their popular meaning‟ - (Blackshaws (Pty) Ltd v Constantia Insurance Co Ltd 1983 (1) SA 120 (A) at 126H-127A). - If the ordinary sense of the words necessarily leads to some absurdity or to some repugnance or inconsistency with the rest of the contract, then the Court may modify the words just so much as to avoid that absurdity or inconsistency but no more (Scottish Union & National Insurance Co Ltd v Native Recruiting Corporation Ltd 1934 AD 458 at 464-6; Fedgen Insurance Ltd v Leyds 1995 (3) SA 33 (A) at 38B-E). It must also be borne in mind that: „Very few words . . . bear a single meaning, and the “ordinary” meaning of words appearing in a contract will necessarily depend upon the context in which they are used, their interrelation and the nature of the transaction as it appears from the entire contract‟ - (Sassoon Confirming and Acceptance Co (Pty) Ltd v Barclays National Bank Ltd 1974 (1) SA 641 (A) at 646B) - It is essential to have regard to the context in which the word or phrase is used with its interrelation to the contract as a whole, including the nature and purpose of the contract (Coopers & Lybrand and Others v Bryant 1995 (3) SA 761 (A) at 768A-B; Aktiebolaget Hässle and Another v Triomed (Pty) Ltd 2003 (1) SA 155 (SCA) in para [1]).43 Prof. RH Christie : The Law of Contract in South Africa (5th Ed) at pages 205-20644 1998 [1] All ER 98 (HL)45 At pages 767 B to 768 C

24

some repugnancy or inconsistency with the rest of the instrument. Principal Immigration

Officer v Hawabu and Another 1936 AD 26 {dictum at 31 appl} at 31, Scottish Union &

National Insurance Co Ltd v Native Recruiting Corporation Ltd 1934 AD 458 {dictum at 465-6

appl} at 465-6, Kalil v Standard Bank of South Africa Ltd 1967 (4) SA 550 (A) {dictum at

556D appl} at 556D. ….

The mode of construction should never be to interpret the particular word or phrase

in isolation (in vacuo) by itself. See Swart en 'n Ander v Cape Fabrix (Pty) Ltd 1979 (1) SA

195 (A) {dicta at 200E-201A, 201B & 202C appl} at 202C (per Rumpff CJ):

'Wat natuurlik aanvaar moet word, is dat, wanneer die betekenis van woorde in 'n

kontrak bepaal moet word, die woorde onmoontlik uitgeknip en op 'n skoon stuk papier

geplak kan word en dan beoordeel moet word om die betekenis daarvan te bepaal. Dit is vir

my vanselfsprekend dat 'n mens na die betrokke woorde moet kyk met inagneming van die

aard en opset van die kontrak, en ook na die samehang van die woorde in die kontrak as

geheel.'

The correct approach to the application of the 'golden rule' of interpretation after

having ascertained the literal meaning of the word or phrase in question is, broadly

speaking, to have regard:

(1) to the context in which the word or phrase is used with its interrelation to the

contract as a whole, including the nature and purpose of the contract, as stated by Rumpff

CJ supra;

(2) to the background circumstances which explain the genesis and purpose of

the contract, ie to matters probably present to the minds of the parties when they contracted.

Delmas Milling Co Ltd v Du Plessis 1955 (3) SA 447 (A) {dicta at 454G-H & 455A-C appl} at

454G-H; Van Rensburg en Andere v Taute en Andere 1975 (1) SA 279 (A) {dicta at 303A-C

& 305C-E appl} at 305C-E; Swart's case supra at 200E-201A & 202C; Shoprite Checkers

Ltd v Blue Route Property Managers (Pty) Ltd and Others 1994 (2) SA 172 (C) {dictum at

180I-J appl} at 180I-J;

(3) to apply extrinsic evidence regarding the surrounding circumstances when the

language of the document is on the face of it ambiguous, by considering previous

negotiations and correspondence between the parties, subsequent conduct of the parties

showing the sense in which they acted on the document, save direct evidence of their own

intentions. Delmas Milling case at 455A-C, Van Rensburg's case at 303A-C, Swart's case at

201B, Total South Africa (Pty) Ltd v Bekker NO 1992 (1) SA 617 (A){dictum at 624G appl} at

624G, Pritchard Properties (Pty) Ltd v Koulis 1986 (2) SA 1 (A) {dictum at 10C-D appl} at

10C-D.’

25

THE LITERAL INTERPRETATION

[32] If one then extracts the salient aspects of the ‘payment terms’ - clauses 11.1

to 11.5 - of the ‘Main Supply Terms and Conditions’, for purposes of simplifying the

interpretational task, in order to ascertain the intention of the parties, from the

language they have used, the following picture emerges:

‘All payments … shall be made … within twenty (20) days from tender of NOR (NOR

in this instance to count as day one).’46 (my underlining)

[33] One needs to immediately pause here - and note - that this term – in clear

and unambiguous language - sets the parameters within which ‘all payments’ are to

be made.

[34] The agreement then goes on to stipulate:

‘All payments - (ie. all those referred to above) -… shall be made against

presentation by the Seller of the Seller’s original commercial invoice and the relevant outturn

quantity certificates.’47 (emphasis added)

The Seller shall deliver to the Buyer at the Buyer’s office, the original commercial

Invoice and quantity certificates at least two (2) banking days prior to date of payment at

10h00 Namibian time.48

In the event that the document does not arrive within two (2) days prior to payment

date, then payment shall be made within two (2) days of receipt of the’ document. 49

If any payment falls due on a Sunday r on a public holiday, which is a Monday in

Namibia, such payment shall be made on the first Namibian banking day following and if any

46 Clause 11.147 Clause 11.148 Clause 11.249 Clause 11.2

26

payment falls due on a Saturday or any other bank holiday in Namibia such payment shall

be made on the last preceding banking day in Namibia.’50

[35] Surely these additional terms must be ancillary to the overall payment

parameters - set in clause 11.1 - for ‘all payments’. These additional terms merely

regulate how ‘all payments’ are to be made to comply with the parameters set. This

inference, at first glance, then seems to support the defendants’ case.

[36] It however appears also that the following further scenario’s seem to have

been contemplated by the parties:

a) Before any payment is to be made, the seller is obliged to deliver to the buyer,

two documents: ie. the ‘original commercial invoice’ together with ‘quantity

certificates’;51

b) Those two documents should be delivered - at least - two (2) banking days -

prior to the payment date - at 10h00 – Namibian time;

c) Then three scenarios are contemplated by the parties :

i) In the first scenario – referred to in b) above- the buyer is

afforded the opportunity to pay – at least - two (2) banking days

– later;

ii) In the second - and if the document52 - does not arrive within two

(2) days - prior to payment date - then payment shall be made

within two (2) days of receipt of the document.53;

iii) In the third – public holidays and banking holidays – influence

the ‘payment date’ – depending on when the holiday is.

50 Clause 11.351 These documents are referred to in the heading to clause 11.2 as ‘Invoice Documentation’52 this should actually read ‘these documents’53 (this should actually read ‘these documents’ being the ‘original commercial invoice’ together with ‘quantity certificates’)

27

d) The parameters within which all payments are to be made have been clearly

set: ‘All payments’ are to be made within twenty (20) days from tender of

NOR.

e) The ‘date’ on which any ‘payment’ should thus be made, is a date within the

said twenty (20) day period.

f) The ‘payment date’, referred to in e) above should, therefore, in the first

instance, always occur within twenty (20) days from date of tender of NOR –

that is if the requisite invoice documentation has been delivered.

g) If such ‘payment date’ cannot occur within the payment parameters set -

because the ‘original commercial invoice’ together with ‘quantity certificates’

have not been delivered timeously for payment to occur within 20 days from

tender of NOR - then payment must be made within two (2) days of receipt of

the ‘original commercial invoice’ together with ‘quantity certificates’.

h) If the ‘payment date’ is affected by a public holiday or a banking holiday then

clause 11.3 stipulates that such payment is either to be made on the day

following- or preceding the particular holiday, depending on the

circumstances.

[37] This seems to be the intention of the parties which emerges on the application

of the 'literal rule' of interpretation from the language utilised in clauses 11.1 to 11.3

of the ‘Main Supply Terms and Conditions’ if they are given their grammatical and

ordinary meaning.

[38] It is also fairly obvious - if the circumstances contemplated in paragraphs f)

and h), supra, are satisfied - that the contractual terms, imposed on the parties in this

instance by ‘the main supply terms and conditions’, reveal that any claim for

demurrage would immediately become claimable, in legal proceedings, by the

plaintiff, against the defendants, as the defendants would always have been under

the immediate obligation to perform by having to make payment within the set 20 day

period, or within 2 days of arrival of the invoive documentation, or on the day

following- or preceding a holiday.

28

[39] The only absurdity that can arise, on a literal interpretation, of the ‘main

supply terms and conditions’, is in the scenario contemplated in g) above, ie. the

scenario in which the required documentation is not delivered timeously in order to

ensure that the ‘payment date’ - premised on the delivery of the ‘original commercial

invoice’ together with ‘quantity certificates’- occurs within the set 20 day period. The

question that arises in this regard is whether the parties could ever have intended

that it should be in the plaintiff’s power to delay the ‘payment date’ to a ‘never- never

date’ or to ‘any other date’, not linked to the payment parameters agreed to, simply

by not delivering the ‘original commercial invoice’ together with ‘quantity certificates’

at all, or by delaying delivery of such invoice documentation to any other date

convenient to it, but unrelated to the relevant terms of the contract?

[40] The answer to this question is surely to be found through the application of

the ‘golden rule’ - in the context – that is the so-called ‘matrix of fact’ - against which

the ‘Main Supply Terms and Conditions’ were intended to operate - as it appears

from the governing authorities cited above that ‘ … the mode of construction should

never be to interpret a particular phrase in isolation’ 54 and that regard should be had

‘ … to the context in which the … phrase is used with its interrelation to the contract

as a whole, including the nature and purpose of the contract … 55 and ‘ … to the

background circumstances which explain the genesis and purpose of the contract, ie

to matters probably present to the minds of the parties when they contracted .. ‘ 56.

THE CONTEXT

[41] The payment terms under scrutiny in this matter relate to demurrage.57 Those

are the charges incurred if cargo is not discharged from a ship within an agreed

period of time or within a reasonable period of time, if not regulated by any

54 Per Rumpff CJ in Swart v Cape Fabrics (Pty) Ltd 202C : See also : National Address Buro v SWA Broadcasting Corporation 1991 NR 35 HC at 51F – 52G55 Coopers and Lybrand v Bryant at 768 A56 Coopers and Lybrand v Bryant at 768 B57 A voyage charterer must bring a cargo alongside and load it at the port of loading and unload it at the port of discharge. Laws of South Africa (LexisNexis) – volume 25(2) Second Edition Volume page 114

29

agreement.58 The agreed charges – payable by the defendants to the plaintiff - in this

case was fixed at US$ 15 500.00 per day, pro-rata.

[42] In this instance all the other aspects relating to the payment of demurrage

have also been regulated by the ‘main supply terms and conditions’ and they are

thus not dependent on the circumstances, in that sense. The parties have expressly

agreed that:

‘The laytime shall be thirty-six (36) running hours.

Running hours shall commence, berth or no berth, six (6) hours after Notice of

Readiness (NOR) is given or commencement of discharge of the Petroleum Products,

whichever is the earlier.

For the purposes of calculating running hours, discharge of the Petroleum Products

shall be deemed to have been completed upon disconnection of discharging hoses from the

inlet hose connection of the pipeline at the jetty at the discharge port.’

[43] It so appears that the ‘Main Supply Terms and Conditions’ operate in a

commercial environment, where ‘time is money’ so-to-speak. Ships are to be utilised

efficiently and the time for loading and unloading is to be minimised to ensure that

the vessel can take up and transport new cargo to new destinations with the least

possible delay thereby generating further income. If a party unreasonably delays this

process, or does not fulfil the obligation to discharge a cargo within an agreed period

of time, the failure, to fulfil that obligation, results in the party responsible for the

default/delay, either in the circumstances, or by operation of the contract that they

have concluded, becoming liable for the payment of demurrage, or damages for

detention.

58 If no time is stipulated in the charter for loading or unloading, the cargo must be unloaded within a reasonable time. If times for these operations have been stipulated in the charter, within the agreed times. … Failure to fulfil these obligations within the agreed time period or within a reasonable time if not regulated by agreement … results in the party responsible for the default, either in the circumstances, or by law, being liable for the payment of demurrage, or damages for detention. … ”.

30

[44] The payment terms agreed to between the parties herein were surely

intended also to lend business efficacy to the liability for payment for demurrage,

once incurred. In order to achieve this purpose the parties agreed to the

abovementioned ‘payment parameters’ within which the ‘date of payment’ should fall.

Their intention was expressed clearly in this regard : ‘All payments … shall be made

… within twenty (20) days from tender of NOR (NOR in this instance to count as day

one).’ It could thus not have been the intention of the parties, in the abovementioned

business environment, to divorce the overall obligation to pay, within 20 days, once

the liability therefore had arisen, from the agreed to period - to a ‘never-never-day’,

or to a day, suitable to the plaintiff only, dependent on circumstances, far removed

from - and not linked to the agreed to 20 day period.

[45] A reasonable person, having all the background knowledge, which would

reasonably have been available to the parties, in the situation in which they were, at

the time of the contract, would surely have always acknowledged further that the

plaintiff and the defendants, in their quest to regulate the prompt payment of

demurrage charges, within the set 20 day period, also contemplated the possibility

that the 20 day period set might be exceeded if the requisite ‘original commercial

invoice’ together with ‘quantity certificates’ would be delivered at such a late stage in

that period where such ‘late delivery’ would then result in a situation that the agreed

to payment parameters could not be complied with strictly ie. where the date of

payment would thus have to fall outside the 20 day period. For that eventuality an

extra 2 days would be allowed for payment, or payment could still be made, on a

banking day, preceding- or following a particular holiday.

[46] The overriding intention however would always have been that all payments

should be made within the set 20 day period. For this to occur the obligation was

cast on the plaintiff to ensure that the delivery, of the‘original commercial invoice’

together with ‘quantity certificates’, to the defendants, would have to occur at least

two (2) banking days prior to date of payment at 10h00 Namibian time, but timeously

enough to enable the defendants to make payment before the effluxion of the set 20

day period. This is the first and main scenario which was contemplated by the

parties.

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[47] I have already observed that also the second scenario cannot be removed

totally from the overall payment parameters set, as the parties have clearly

expressed their intention that all payments should occur within 20 days and that,

even in circumstances where this could not be practically achieved, because of the

late delivery of the required documentation or because of an intervening holiday,

then payment would still have to be made within 2 days of arrival of the

documentation, or on the day preceding- or following a holiday, but all such

payments should at least still be made, as closely as possible, to the 20 day period

agreed to.

[48] Two possible further scenarios arise in the circumstances were the requisite

documentation is not delivered timeously, thus resulting in a situation that the

payment date will fall outside the 20 day period:

a) The first possibility arises where delivery of the documentation is attempted

within the 20 day period, but that the arrival of the invoice documentation is so

late that it will result a situation that payment will have to be made on a date

outside the 20 day period. At the latest this can occur on the 20 th day. This is

the scenario were payment then has to be made within 22 days.

b) The second possibility arises where the invoice documentation is simply

delivered outside the 20 day period. In such scenario payment is to be made

within 2 days of arrival of the documentation, whenever that arrival actually

occurs. Although it is unlikely that this was ever intended it is therefore

theoretically possible that the obligation to pay for demurrage could only arise

years after the effluxion of the 20 day period because the delivery of the

requisite invoice documentation and its arrival occurs years later.

[49] These scenario’s then also reflect the theoretical possibilities if the ‘delivery’ of

the documentation is to be the key event which is to trigger the obligation to effect

payment for demurrage. This is what the plaintiff essentially contends for. This line of

thought however overlooks the overall intention of the parties as already gleaned on

the interpretation of the contract concluded between them and such reasoning also

fails to take into account the impact of a significant change of terminology, which

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occurs within the clause 11.2 of the ‘Main Supply Terms and Conditions’. More

particularly it appears that:

‘All payments -… shall be made against presentation by the Seller of the Seller’s

original commercial invoice and the relevant outturn quantity certificates.’ (emphasis added)

The Seller shall ‘deliver’ to the Buyer at the Buyer’s office, the original commercial

Invoice and quantity certificates at least two (2) banking days prior to date of payment at

10h00 Namibian time.

In the event that the document does not ‘arrive’ within two (2) days prior to payment

date, then payment shall be made within two (2) days of receipt of the’ document.’ (my

underlining)

[50] The clause, in the first instance, obliges the seller to ‘deliver’ the invoice

documentation – timeously – in order to ensure that the ‘payment date’ occurs within

the set 20 day period - and then goes on to regulate what should occur in the event

of a ‘late arrival’.

[51] A search of the ‘Thesaurus’ tool, linked to the ‘Microsoft Word 2010’ computer

program reveals that the following relevant meanings can be attached to the words

‘deliver’, ‘delivery’, ‘arrive’ and ‘arrival’ :

‘deliver’ : ‘1. Carry something to somebody : to take something such as mail, goods

that have been bought, or a message to a person or an address. … 10. Provide something:

transitive verb to provide or produce something … 12. Give somebody something: transitive

verb to hand somebody or something over to somebody else -

‘delivery’ is defined to mean : 1. the carrying of something such as mail, goods that

have been bought, or a message to a person or address – 3. something brought by a postal

worker or a vendor, e.g. mail or goods that have been bought -

‘arrive’ – 1. to reach a place after coming from another place – 2. to be delivered or

brought to somebody or something – 3. to become available -

‘arrival’ : 1. the reaching of a place after coming from another place –‘.

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[52] It seems that the parties intended to give expression to the distinction

between the act of ‘taking the invoice documentation’ to the defendants, ie. between

the ‘delivery process’ and the ‘arrival event’, ie, the occasion when the invoice

documentation ‘would reach’ the defendants, implying prior dispatch and a delay in

reaching its destination.

[53] It would have been an easy matter to again utilize the word ‘deliver’ instead of

the word ‘arrive’ in the contract if a different meaning was intended, in which event

the clause could have read : In the event that the document is not ‘delivered’ within

two (2) days prior to payment date … ‘. Instead the parties elected to express their

intention by agreeing to an extra 2 days for payment : In the event that the document

does not ‘arrive’ within two (2) days prior to payment date … ‘.

[54] This change in terminology then reveals that the contract was not really

intended to allow for the out of time ‘delivery’ of the invoice documentation,59 it only

endeavours to regulate the possibility of the ‘late arrival’ thereof, ie. the ‘late arrival’

of invoice documentation that has already been sent/dispatched within the set period

but were the ‘arrival’ was delayed for some or other reason60 but were it was

intended that payment would still have to be made as closely as possible in

accordance with the payment parameters agreed to. This conclusion is reinforced by

the provisions of clause 11.3 which regulates the date of any payment affected by a

public- or banking holiday and where the intention is clearly expressed that payment

should occur strictly on the next- or preceding banking day.

[55] It must be concluded that the parties in their contract did not intend to make

allowance for the second theoretical scenario mentioned above, which would allow

for a payment date not related at all to the payment parameters agreed to.

[56] Such interpretation would then also ensure that expression is given to the

intention of the parties that any late ‘arrival’ of the invoice documentation - due to an

out of time ‘delivery’ of such documentation61 - and the dependent payment date62

premised thereon - would not be unrelated to the overall payment parameters set,

59 That is delivery outside the 20 day period.60 Contemplating only the first theoretical scenario.61 That is delivery at any stage outside the 20 day period62 A payment date unrelated to the 20 day period

34

which interpretation would, in turn, also lend certainty to the question by when ‘the

debt’ in this instance would become ‘due’.

[57] Ultimately it must be concluded that the parties wanted to create a payment

solution which was promptly enforceable, which goal they endeavoured to achieve

by creating a firm arrangement in which payment for demurrage would have to occur

within 20 days from tender of NOR or at the latest within 2 days of the arrival of the

invoice documentation, but not unrelated to the agreed to 20 day payment period. In

such premises the parties intended that the plaintiff would acquire a complete cause

of action and would become entitled to claim payment immediately on default.

THE FACTS

[58] In the factual determination of when the ‘debt for demurrage’ became due in

this instance, regard should be had to the facts agreed to by the parties in their

stated case and with reference to which the special plea of prescription has to be

determined. It should be kept in mind in this regard that I have already found that the

parties in this regard did contractually agree that the ‘debt’ would become due and

payable, in general, within 20 days of tender of NOR, if the requisite invoice

documentation would have been delivered and arrived within the set 20 day period,

unless a further 2 days would have to be afforded for payment in the event of the late

arrival of the invoice documentation.

[59] The stated case is however silent on when, in each instance, the relevant

NOR was tendered – if at all – and - whether or not, any ‘invoice documentation’ was

ever delivered in respect of any of the claims made for demurrage, prior to 31 March

2008, or if such invoice documentation, (if it was delivered), was ever delivered

within the set 20 day period and, whether or not, any such invoice documentation, if

any, ‘arrived’ late. The court was only supplied with one so-called ‘Tax/Commercial

Invoice’, that is the invoice dated 31 March 2008.

[60] For purposes of argument the parties did however accept that the

determination of this case is to be made with reference to this one invoice.

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[61] This acceptance then also implies the acceptance of the following further

assumed facts:

a) that all the relevant NOR’s would have been tendered in respect of each

month to which each claim for demurrage relates;

b) that - in spite of the tender of any NOR - no invoice documentation was

delivered by the plaintiff to the defendants, other than the invoice, dated 31

March 2008;

c) that the date of ‘delivery’ of the only invoice in this case and the date of its

‘arrival’ must be assumed to be the 31st of March 3008;

d) that the plaintiff did therefore not comply with its obligations to deliver the

requisite invoice documentation - in respect of the claims made for demurrage

for the periods 1 July 2005 to 30 June 2006, 1 July 2006 to 30 June 2007 and

1 July 2007 to 28 February 2008 – timeously – and within any 20 day period -

to enable - and to oblige the defendants to make payment for demurrage

within the agreed payment parameters;

e) that the plaintiff therefore - and through its failure to timeously deliver the

requisite invoice documentation and/or any NOR - prevented a situation in

which the defendants would have become liable to make payment for

demurrage, within the 20 day period set or any later period dependent on the

‘arrival’ of the invoice documentation, through its own inaction;

f) that the plaintiff attempted to remedy this situation by belatedly issuing and

delivereing the invoice dated 31 March 2008;63

[62] It emerges that for the purposes of determining this stated case the extra

period of 2 days, afforded for payment, in the event of the late ‘arrival’ of the invoice

documentation, does not become relevant as the date of ‘delivery’ and the date of

‘arrival’ of the invoice, dated 31 March 2008, is accepted to be the 31st of March

2008. For the same reason the impact of any holidays on the due payment date can

also be ignored for purposes of this decision.

[63] It then becomes of significance that it was, in my view, correctly pointed out,

on behalf of the defendants, that tender NOR would always have preceded the off-

loading of cargo and that it was thus impossible for any NOR to post- date the period 63 Interestingly enough the said invoice also reflects the following : “Pay by: Payment due on or before – Due Date: 18/4/2008.”

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of discharge. This means that for any of the plaintiff’s claims, relating to demurrage,

to have become due and payable in accordance with the ‘main supply terms and

conditions’, the relevant tender of any NOR for any month in the claim period,

assuming that fuel was discharged in such month, would, in the ordinary course,

have had to be made in the preceding 20 day period. Put differently: If fuel was

unloaded in June 2006, for example, such unloading would have been preceded by

the tender of a NOR. If the unloading of the cargo then would have exceeded the

agreed to 36 hour period, charges, for demurrage, would ordinarily become due and

payable within 20 days from tender of NOR, (NOR in such instance to count as day

one), if the relevant invoice documentation would also have been delivered timeously

to trigger the obligation of the defendants to make payment within the payment

parameters set. This would essentially mean that any claim for demurrage for June

2006 would at the latest have become due and payable sometime in July 2006,

depending on the date on which the applicable NOR was actually tendered during

June 2006 and when the invoice documentation would have been delivered.

[64] It does not take much to fathom that if the plaintiff would have timeously

provided the defendants with the necessary invoice documentation – as it was

obliged to do– that is in respect of the claims for demurrage for the periods July 2005

to 30 June 2006, 1 July 2006 to 30 June 2007 and 1 July 2007 to 28 January 2008 -

- all such claims would have become due and payable essentially - at the latest -

during the month following the tender of any NOR - and in respect of which the

plaintiff’s action would then have clearly been instituted outside the prescribed 3 year

period.

[65] It will have been noted that I have not upheld the arguments mustered on

behalf of the defendants that the applicable prescriptive periods commenced to run

simply from the date of tender of the relevant NOR in each instance and that the

delivery of the relevant invoice documentation was immaterial to the determination of

when the debt in this case became due. I have concluded that the invoice

documentation constituted a pre-requisite for the debt to become due in this instance

and thus to the institution of legal proceedings. I arrived at this conclusion mainly on

the interpretation of the ‘main supply terms and conditions’. There is however

another reason for this. On closer scrutiny of the agreement it appears that the

invoice documentation is also to contain the relevant ‘quantity certificates’. The

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obligation to pay, within 20 days of tender, of any NOR, on its own, would not have

been enough to complete the plaintiff’s cause of action, as without the invoice

documentation to which the quantity certificates would have belonged, it would, in

the first instance, have been impossible to determine the quantities of fuel offloaded.

I will assume secondly that the quantity certificates would also have indicated during

which period any quantities of fuel were off-loaded and thus when the hoses where

disconnected. It should be remembered that the moment of disconnection of the

discharging hoses, from the inlet hose connection, of the pipeline, at the jetty at the

discharge port, in turn, determinates the period of lay -time, with reference to which it

can then be determined whether such lay -time was in excess of 36 hours, with

reference to which, in turn, the charges for demurrage would then be calculated.64

[66] Only once so quantified was all the necessary information available against

which payment of the demurrage charges could be made within the stipulated period

of time. That is when the debt in this instance became due. At the same time it

becomes clear that some of the plaintiff’s damages for demurrage occurred as far

back as July 2005 – and that the quantification of the debt – for the period July 2005

to February 2008 - which the plaintiff is now trying to enforce - only occurred on 31

March 2008, through the plaintiff’s own inaction.

SHOULD THE PLAINTIFF BE ALLOWED TO DELAY THE RUNNING OF PRESCRIPTION

[67] This brings me to Mr Coleman’s alternative argument based on Phasha’s

case65 in which the Satchwell J also referred to and considered the line of authorities

which the South African Supreme Court of Appeal followed in Uitenhage Municipality

v Molloy66 where Mahomed CJ formulated the basis of the approach to be followed

by the South African courts in cases where the creditor’s failure to perform, delays

the running of prescription. The learned Chief Justice did so as follows:

‘This kind of anomaly also supports an alternative approach to the dispute which

would lead to the same result in this appeal. It is this. Assuming in favour of the respondent

that his claims against the appellant only became 'due' within the meaning of s 12(1) of the

Prescription Act after one of the conditions in s 30(3)(a), (b) or (c) of the Employment Act is

64 See clause clause 9.165 2000 (2) SA 455 (W) supra66 1998 (2) SA 735 (SCA)

38

satisfied, can he rely on the fact that they were not so satisfied if he himself took no steps to

procure such satisfaction?

In my view, he cannot do so. Section 30(3)(c) of the Employment Act, for example, is a

condition which can easily be satisfied on the initiative of the respondent himself. It requires

simply a certificate from the Director-General stating that the respondent has requested that

s 27 of the Employment Act shall not be applied in respect of his claim. *

An employee who elects not to apply for a certificate in terms of s 30(3)(c), cannot contend

that his or her claim in terms of ss 9(1) or 10(2)(a)(ii) was not 'due' because such a certificate

had not been issued. The remedy lies in the employee's own hands. Such an employee

cannot profit by his or her own inaction. As was stated by Van den Heever J in Benson and

Another v Walters and Others 1981 (4) SA 42 (C) at 49G:

'Our Courts have consistently held that a creditor is not able by his own conduct to

postpone the commencement of prescription.'

This approach was confirmed by the Court in the case of The Master v I L Back & Co Ltd

(supra at 1005G) when Galgut AJA endorsed the following assertion:

'If all that is required to be done to render the debt payable is a unilateral act by the

creditor, the creditor cannot avoid the incidence of prescription by studiously refraining from

performing that act.'67

[68] The learned Chief Justice went on to explain:

‘The rationale in the cases which have held that a creditor cannot 'by his own

conduct postpone the commencement of prescription' by refraining from satisfying the

condition which would render a debt due and payable, apply equally where the creditor has

failed to take or initiate the steps which fall within his or her power to make it possible for

such a condition to be satisfied. Were it otherwise, an employee seeking to pursue an old

claim in terms of the Employment Act, who fears that the claim may be defeated in court by

the production of the employer's records, could overcome this difficulty by waiting to pursue

that claim civilly until those records had been destroyed in terms of s 20(3) of the

Employment Act.

One of the main purposes of the Prescription Act is to protect a debtor from old claims

against which it cannot effectively defend itself because of loss of records or witnesses

caused by the lapse of time. If creditors are allowed by their deliberate or negligent acts to

delay the pursuit of their claims without incurring the consequences of prescription, that

purpose would be subverted.’68

67 at p 741 to 74268 at p 742G to 743A – also Satchwell J stated with approval in Phasha at p474F : ‘I am with respect in agreement that 'if creditors are allowed by their deliberate or negligent acts to delay the pursuit of their claims without incurring the consequences of prescription' (Molloy (at 742I - 743A)) the

39

[69] In my respectful view this reasoning cannot be faulted and it is thus without

hesitation that I adopt this principle into our law and apply this approach to the

present case.

[70] I have already set out why the debt in this instance was not due until it could

be quantified through the delivery of the requisite invoice documentation. This event

- as far as the bulk of the plaintiff’s claims is concerned - only occurred far outside

the contractual payment parameters agreed upon because of the plaintiff’s inaction

until 31 March 2008.

[71] It is on the application of the principles formulated in Malloy and Phasha69 that

also the plaintiff’s case, in this instance, must fail. It is clear that the plaintiff’s failure

to take and initiate any steps timeously - deliberate or not - would - save for the

plaintiff’s inaction - have brought about the consequences of prescription otherwise.

[72] For these reasons - and even if ‘technically speaking’ - the debt claimed by

the plaintiff - was not 'due' - until the invoice documentation had been delivered or

had arrived - the case sought to be made on behalf of the plaintiff must fail because

the plaintiff himself failed to take or initiate any steps to procure the satisfaction of

the conditions imposed on it by the ‘main supply terms and conditions’ for the debt to

become due at the time contemplated by the parties in their agreement.

[73] The plaintiff’s inaction in this case has clearly postponed the commencement

of prescription as it was always within the plaintiff’s power to satisfy the pre-

conditions set for payment of demurrage to have become due within the stipulated

time. One of the main purposes of the Prescription Act is to protect a debtor from old

claims. If this court would allow the plaintiff, despite its deliberate or negligent acts, to

delay the pursuit of its claims, without incurring the consequences of prescription, the

purpose of the Prescription Act 1969 would be subverted.

purposes of the Prescription Act would indeed be subverted. I am with respect in agreement that 'if creditors are allowed by their deliberate or negligent acts to delay the pursuit of their claims without incurring the consequences of prescription' the purposes of the Prescription Act would indeed be subverted.’69 Also: The Master v I L Back & Co Ltd and Others 1983 (1) SA 986 (A) at 1004C - G applied

40

[74] I therefore find that the plaintiff's claim against the first, second- and fourth

defendants has prescribed.

[75] In the result the plaintiff's claims are dismissed with costs, such costs to

include the costs of one instructed- and one instructing counsel.

[76] I do not consider the complexity of the matter to be such that it warranted the

engagement of two instructed counsel.

----------------------------------

H GEIER

Judge

41

APPEARANCES

PLAINTIFF: S Akweenda (with him G Narib)

Instructed by Conradie & Damaseb,

Windhoek.

FIRST DEFENDANT: G Coleman

Instructed by HD Bossau & Co.,

Windhoek

SECOND and FOURTH

DEFENDANTS: E M Schimming-Chase

(with JP Ravenscroft-Jones)

Instructed by Engling, Stritter & Partners,

Windhoek