THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Case no: 558/12

REPORTABLE
In the matter between:

PETER TAYLOR & ASSOCIATES

APPELLANT

and

BELL ESTATES (PTY) LTD

FIRST RESPONDENT

RENASA INSURANCE COMPANY (PTY) LTD
SECOND RESPONDENT

Neutral citation: Peter Taylor & Associates v Bell Estates & another (558/12)
[2013] ZASCA 94 (04 July 2013)

Coram:
Mpati P, Tshiqi and Pillay JJA and Plasket and Saldulker AJJA

Heard:
6 May 2013

Delivered:
04 July 2013

Summary: Prescription – whether service of a Rule 10(3) notice constitutes
process as envisaged by s 15(1) and (6) of the Prescription Act 68 of 1969.

_____________________________________________________________
ORDER
__________________________________________________________________
On appeal from: KwaZulu-Natal High Court, Durban (Madondo J sitting as court of
first instance):
1 The appeal is upheld with costs.
2 The order of the court below is set aside and replaced with the following:
‘The application is dismissed with costs’.
___________________________________________________________________
JUDGMENT
___________________________________________________________________
TSHIQI JA (MPATI P, PILLAY JA AND PLASKET AND SALDULKER AJJA
CONCURRING):
[1] The narrow issue in this appeal is whether service of a notice of joinder, in
terms of rule 10(3) of the uniform rules of court, on the appellant (Taylor) interrupted
prescription as envisaged by s 15(1) of the Prescription Act 68 of 1969 (the Act).The
court below (KwaZulu-Natal High Court, per Madondo J) found that it did and that the
claim of the first respondent (Bell Estates) against the appellant had not prescribed.
This appeal is with the leave of that court.

[2] Bell Estates, duly represented by Taylor, an insurance broker, insured its motor
vehicle with the second respondent, Renasa Insurance Company (Pty) Ltd (Renasa),
against, inter alia, theft, loss and damage for the amount of R240 000. The vehicle
was stolen on 6 July 2006 and was never recovered. Bell Estates lodged a claim but
Renasa repudiated. On 8 May 2007 Bell Estates issued a summons against Renasa
as the insurers of the vehicle, claiming compensation for the loss of its vehicle. In its
plea, dated 19 June 2007, Renasa disputed liability. It pleaded, inter alia, that it was
a term of the contract that, where the value of the insured vehicle exceeded
R150 000, the vehicle must be fitted with one of certain types of tracking devices
specified in the insurance agreement. As the vehicle was not fitted with any of those
devices, Renasa averred that it was entitled to repudiate liability and that Bell
Estates could not recover the compensation claimed.

[3] On 30 September 20091 Bell Estates served a rule 10(3) joinder application on
Taylor, seeking an order that:
‘(a)
Peter Taylor and Associates be joined as second defendant in the action;
(b)
Bell Estates serve the pleadings on Peter Taylor and Associates within 10 days; and
(c)
Bell Estates be given leave to amend its particulars of claim to make provision for the
inclusion of Peter Taylor and Associates.’

1 At that stage it was already two years and four months after the summons was served on Renasa.

It was alleged in the founding affidavit, in support of the joinder application, that if the
vehicle had to be fitted with a tracking device for it to be covered, then Taylor, as the
insurance broker who represented Bell Estates, was privy to this requirement and
thus owed the latter a duty to convey the information, but failed to do so.

[4] On 5 October 2009 Taylor served, on Bell Estates’ attorneys, a notice of
intention to oppose the application. The answering affidavit was deposed to on
31 May 2010. The point was raised therein that the claim had prescribed as more
than three years had elapsed since Bell Estates acquired knowledge of Renasa’s
repudiation of its claim (on 11 November 2006). Reference was also made to a letter
from Bell Estates’ attorneys to Taylor, dated 24 January 2007, in which it was stated
that the latter had ‘failed in its duty as our client’s broker’ and that it would ‘therefore
be liable for damages which our client has suffered’. It was accordingly alleged, in
the answering affidavit, that prescription against Taylor had commenced to run as
from 24 January 2007, (the date on which Bell Estates’ attorneys came to the
conclusion that Taylor had failed in its duty as insurance broker and was thus liable
for the damages suffered by Bell Estates) and the action would thus be a fruitless
exercise as the claim against him had prescribed.2

[5] Section 15(1) and (6) of the Act provide:
‘Judicial interruption of prescription
(1)  The running of prescription shall, subject to the provisions of subsection (2), be
interrupted by the service on the debtor of any process whereby the creditor claims payment
of the debt.
…
(6)  For the purposes of this section, “process” includes a petition, a notice of motion, a rule
nisi, a pleading in reconvention, a third party notice referred to in any rule of court, and any
document whereby legal proceedings are commenced’.

Section 15(5) deals with the situation where a person applies to be joined as a defendant in
an action. It says:
‘If any person is joined as a defendant on his own application, the process whereby the
creditor claims payment of the debt shall be deemed to have been served on such person on
the date of such joinder’.
In its judgment the court below defined the issue in the case to be whether a notice
of joinder in terms of rule 10(3) ‘constitutes a process’ for purposes of s15(1) of the
Act and, consequently, whether the service of the notice of joinder interrupted the
running of prescription.

2 It is not in dispute that when the rule 10(3) notice was served, the three-year prescription period had
not yet expired.  However, on 31 May 2010, when Taylor raised the plea of prescription in his affidavit
three years had already expired.

[6]   The contention on behalf of Taylor was that the rule 10(3) notice was not a
‘process whereby the creditor claims payment of the debt’ and that therefore its
service did not interrupt prescription. Bell Estates contended, on the other hand, that
the notice was such a process and that its service had the effect of interrupting
prescription. Rule 10(3) provides:
‘Several defendants may be sued in one action either jointly, jointly and severally, separately
or in the alternative, whenever the question arising between them or any of them and the
plaintiffs depends upon the determination of substantially the same question of law or fact,
which, if such defendants were sued separately, would arise in each separate action’.
As has been mentioned above, the notice of joinder served on Taylor sought an
order (a) joining Taylor as a defendant; (b) allowing service of the pleadings on it
within 10 days; and (c) granting Bell Estates leave to amend its particulars of claim.

[7]  In the court below Madondo J correctly stated that s 15(1) of the Act entails
three requirements for prescription to be interrupted. They are: (a) a process;
(b) served on the debtor; and (c) by means of which the creditor claims payment of
the debt. In considering whether these requirements have been met in the present
matter, the learned judge was faced with two high court decisions in which conflicting
views are expressed on whether prescription had been interrupted by service of a
rule 10(3) notice on the party sought to be joined. In Naidoo & another v Lane &
another 1997 (2) SA 913 (D) the court (Meskin J) held that a joinder application was
not a process by which a creditor claims payment of a debt as contemplated by s
15(1) of the Act and that its service had therefore not interrupted the running of
prescription. In Waverley Blankets Ltd v Shoprite Checkers (Pty) Ltd & another 2002
(4) SA 166 (C) the court (Comrie J) rejected that view and held that the joinder
application was a process whereby a creditor claimed payment of a debt and that its
service had interrupted prescription. Both courts sought to place reliance on Cape
Town Municipality & another v Allianz Insurance Co Ltd 1990 (1) SA 311 (C).3  The
court a quo dealt with both decisions and preferred the view expressed in Waverly
Blankets.

[8]   It would be helpful to deal with the facts and the nature of the issue raised in
Allianz in order to understand the dichotomy. That case concerned two consolidated
actions, the essential relief claimed by each plaintiff being an order declaring that
Allianz was liable to indemnify the plaintiffs in terms of an insurance policy in respect
of all loss or damage suffered as a result of two storms. The issue for determination
was whether service of a process whereby the creditor claimed a declaratory order
that the debtor was liable to indemnify it, rather than a claim for payment of a debt,
interrupted the running of prescription. Howie J stated (at 334H-I):
‘1
It is sufficient for purposes of interrupting prescription if the process to be served is one
whereby the proceedings begun thereunder are instituted as a step in the enforcement of a
claim for payment of a debt.
A creditor prosecutes his claim under that process to final, executable judgment, not
only when the process and the judgment constitute the beginning and end of the same
action, but also where the process initiates an action, judgment in which finally disposes of

3 Counsel for the respondent also referred to the recent decision of Wessels v Coetzee [2013]
ZAGPPH 82, where Victor J aligned herself with the reasoning in Waverley Blankets.

some elements of the claim, and where the remaining elements are disposed of in a
supplementary action instituted pursuant to and dependent upon that judgment’.

[9]   It appears that the plaintiffs in that case intended, should it be necessary, to
institute further action for payment of sums of money. In this regard Howie J said:
‘If further proceedings are instituted by plaintiffs in due course to exact payment from
defendant pursuant to judgement in the present case, such further action will be necessary
by reason of the fact that the present action is only concerned with the issue of liability, and
the further action will cover elements of plaintiffs’ claim not canvassed in the current action.
Conversely, those elements of the claim covered in the present matter will be res judicata
hereafter. But the two actions together will still deal only with one cause of action….
Therefore the cause of action on which the present action is based is the same cause of
action as that on which the supposed further litigation will be founded’.4(My emphasis)
The learned judge held further that the connection between the action in which the
declarators were sought and a second claim for payment of the debt was sufficiently
close to interrupt prescription. He reasoned, citing Murray & Roberts Construction
(Cape) (Pty) Ltd v Upington Municipality 1984 (1) SA 571 (A) at 578H, that the issue
of summons for the declarators amounted to taking judicial steps to recover the debt,
thereby removing all uncertainty as to its existence.

[10]   In Waverly Blankets Comrie J recognised that the joinder order in that case did
not resolve any issue of liability, but stated (at 175C-E):
‘It appears to me, however, that there is still a sufficiently close link between the joinder
application and a final judgment sounding in money in the plaintiff’s favour, if such should be
granted on the merits. Thus the joinder application led to the joinder order, which in turn led
to further pleadings and eventually to trial. But for prescription, it is open to the plaintiff to
prove its case on the merits and to secure a final judgment’.
In that case the second defendant had been joined in the action between the plaintiff
and the first defendant by consent. The second defendant thereafter raised
prescription as a defence. Comrie J’s reasoning seems to be that the joinder
application was sufficiently closely related to the claim for damages against the
defendant to be joined (who was there joined) and that it therefore qualified as a
process whereby the creditor claimed payment of the debt.

[11]   It seems to me that Comrie J’s approach may have been influenced by a
misreading of Howie J’s judgment in Allianz. The basis for the finding in Allianz, that
the connection between the action in which the declarators were sought and the
second claim for payment of the debt was sufficiently close to interrupt prescription,
was that the judgment in the action for the declarators would finally dispose of some
elements of the claim, the remaining elements to be disposed of in a supplementary
action. That was not the case in Waverly Blankets. The joinder order did not dispose
of any element of the claim to which the second defendant was joined.

4 Cape Town Municipality v Allianz at 332B-333.

[12]   The crux of Howie J’s reasoning appears in the following passage in his
judgment in Allianz (at 333I-334B):
‘What, then, would the situation be if plaintiffs succeeded “under the process” served in the
present action and then had to initiate further proceedings in order to secure an order for
payment? Could it then be said that the order for payment had been obtained “under” the
process in question, i.e under the present summons? As a matter of direct cause and effect
the answer must be in the negative. On the other hand, the finding establishing liability would
undoubtedly have been obtained under the present process, i.e “under the process in
question”, and it would unquestionably be an essential link between that process and the
final executable judgment, notwithstanding that some further process will be required to
initiate the supplementary proceedings. Not only that, but it would not defeat any objective
which the present prescriptive Act sought to attain if one were to construe the contemplated
final executable judgment as obtained by prosecuting the claim “under the present process”’.

[13] Howie J gave three further reasons why his view was consistent with the
purpose underpinning the Prescription Act. The first was that there was no basis for
an inference that the plaintiffs’ actions for the declarators were intended to be no
more than a means of obtaining an ‘advisory opinion’. Rather, he said, the actions
were ‘instituted as steps in the enforcement of [the plaintiffs’] rights to an indemnity,
that is to say, with the eventual object to get defendant to implement the indemnity’,
and not ‘as “foot in the door” manoeuvres to keep prescription at bay’. Secondly, the
plaintiffs’ cause of action ‘is the self-same cause of action as that which would found
any subsequent related litigation aimed specifically at obtaining an order for payment
of money’. Thirdly, the steps taken by the plaintiffs in respect of the indemnity were
taken expeditiously - within 18 months of the storm damage.5

[14] In Naidoo, Meskin J accepted Howie J’s conclusion in Allianz that for the
purposes of interrupting prescription it is sufficient ‘if the process to be served is one
whereby the proceedings begun thereunder are instituted as a step in the
enforcement of a claim for payment of the debt’.6 The two plaintiffs in Naidoo had
sought to join the Minister of Safety and Security as second defendant in an action
they had instituted against the first defendant. Having accepted Howie J’s
conclusion, Meskin J stated that neither plaintiff (in Naidoo) purported to enforce, by
means of the joinder application per se, ‘the right co-relative to the obligation to pay
damages allegedly owed to such plaintiff by the proposed second defendant’.7 He
said further:
‘No judgment directing the second defendant to pay the damages claimed by each plaintiff
could be obtained “under” the application. Such a judgment could be obtained only “under”
the amended summons and the amended particulars of claim as amplified by any further
pleadings, the delivery of which the exigencies of the litigation might entail. If such a
judgment were to be obtained, the application itself in no way would have grounded such
judgment: it would exist simply as a preliminary process by means of which the plaintiffs had
placed themselves in a position by means of the subsequent service of the process
constituted by the amended summons and the amended particulars of claim to claim
payment of the damages suffered by them’.8

5Cape Town Municipality v Allianz at 334C-F.
6Naidoo & another v Lane & another 1997 (2) SA 913 (D) at 919G-H.
7At 919G-H.
8At 921B-D.

[15]    I agree with the sentiments expressed by Meskin J. And when the joinder
application in the present matter is analysed in the context of the Allianz case, it
appears to me that it would be stretching the interpretation of the Act a little too far to
say that the application constitutes a ‘process whereby the creditor claims payment
of the debt’ and that its service therefore interrupted prescription. First, it cannot be
said that judgment in the joinder application (assuming it to be in favour of the
applicant) ‘finally disposes of some elements of the claim’. Indeed, it would finally
dispose of no elements of the claim, but would merely make it possible, from a
procedural perspective, for the plaintiff to institute a claim against the defendant who
had been joined. Second, the causes of action in the joinder application and the
claim for damages have nothing in common. It certainly cannot be said that the two
processes involve the self-same, or substantially the same,9 cause of action.

[16]   It is true that there is reference to the cause of action in the founding affidavit in
support of the joinder application, but in terms of the order sought, Bell Estates
would be able to claim payment of a debt from Taylor only once the court had
granted the application in its favour. In the event of the court refusing the application,
it would not be possible for Bell Estates to proceed against Taylor for payment of a
debt on the basis of that notice. It follows from what has been said above that
Waverly Blankets was, with respect, wrongly decided.

[17]   In the result, I make the following order:

The appeal is upheld with costs.
The order of the court below is set aside and replaced with the following:
‘The application is dismissed with costs’.

__________________
Z L L TSHIQI
JUDGE OF APPEAL

9 See Neon and Cold Cathode Illuminations (Pty) Ltd v Ephron 1978 (1) SA 463 (A) at 470H-471D.

APPEARANCES:

For Appellant:

A.J Boulle
Instructed by
Norton Rose South Africa, Durban
Webbers, Bloemfontein

For Respondent:
A.C Camp
Instructed by
Truter, James, De RidderInc, Empangeni
Naudés, Bloemfontein