When does a claim for damages prescribe?

In Mavuso v Member of the Executive Council for the Department of Health, Mpumalanga, heard in the Pretoria High Court, the issue before the court was whether Mavuso’s claim for damages against the Defendant – launched more than three years from the date of his injury – had prescribed.

The Defendant raised a special plea of prescription. The court found that the Defendant bore the onus of proving that prescription barred the plaintiff from proceeding with his claim.

In terms of section 11(d) of the Prescription Act 68 of 1969 (“the Act”) a claim is subject to a three-year prescription period which starts to run when the debt is due. Section 12(3) provides that “A debt 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”.

The defendant contended that the plaintiff’s claimed for damages, showed that he had knowledge of the identity of the defendant and of the facts giving rise to the debt on which the claim was based, when he was discharged from hospital following his injury in an accident. 

The defence was bad in law. There was nothing to indicate why the plaintiff, on being discharged from hospital, would at that stage have had material facts for a cause of action. It was only when a medical report subsequently obtained by the plaintiff was received, that the plaintiff could have realise that he had a cause of action against the defendant. The special plea of the defendant was thus dismissed with costs.

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When a landlord can’t sue a tenant for unpaid rent

In Picardi Hotels Limited versus Thekweni Properties (680/7) (2008) ZASCA 128, the SCA held that a landlord could not sue his tenant for unpaid arrear rentals if the mortgage agreement concluded between the bank and the landlord contained a cession of rentals. Thus, unless otherwise agreed, the landlord had given up his right to sue for unpaid rent by ceding this income to the bank when concluding the mortgage agreement.

Landlords with mortgage bonds registered over their rental properties may have unwittingly surrendered their right to sue defaulting tenants where the mortgage bond contains a cession. Mortgage bonds typically contain a clause such as this:

Cession of rentals and revenues

Should the Mortgagee give its consent to the letting of the mortgaged property, the Mortgagor cedes, transfers and assigns to the Mortgagee all the Mortgagor’s rights, title and interest in and to all rentals and other revenues of whatsoever nature, which may accrue from the mortgaged property as additional security for the due payment by the Mortgagor of all amounts owing to or claimable by the Mortgagee at any time in terms of this bond, with the express right in favour of the Mortgagee irrevocably and in rem suam:

1      to institute proceedings against lessees for the recovery of unpaid rentals, and/or eviction from the mortgaged property;

2      to let the mortgaged property or any part thereof, to cancel or renew and enter into leases in such manner as the Mortgagee decides, and to evict any trespasser or other person from the mortgaged property;

Landlords should carefully check their mortgage agreements on both commercial and residential properties. If they contain a cession of rentals they need to obtain the bank’s permission before they may sue for unpaid rentals. This decision affects both commercial and residential rental properties as the above cession is included as a term of most commercial and many residential mortgage loan agreements.

Unless otherwise agreed, the landlord gives up his right to sue for unpaid rent by ceding this income to the bank when concluding a mortgage agreement.