THE SUPREME COURT OF APPEAL
REPUBLIC OF SOUTH AFRICA

JUDGMENT

Case no: 03 / 09

UMGENI WATER
First Appellant
PRINCIPAL OFFICER OF THE
UMGENI WATER RETIREMENT FUND
Second Appellant
THE MINISTRY OF WATER AFFAIRS
Third Appellant

and

BONGINKOSI VINCENT MSHENGU
Respondent

___________________________________________________________________

Neutral citation:
Umgeni Water v Mshengu

(03/09) [2009] ZASCA 148 (26 November 2009)

CORAM:

MPATI P, NUGENT, PONNAN JJA, HURT and WALLIS AJJA

HEARD:

20 November 2009
DELIVERED:
26 November 2009

SUMMARY:
Prescription Act 68 of 1969 – extinctive prescription –
dismissed employee – claim for retirement benefits – cause
of action not arising or accruing whilst dismissal in force.

___________________________________________________________________

ORDER
___________________________________________________________________

On appeal from:  The Pietermaritzburg High Court (McLaren J sitting as court of first
instance).

The appeal is dismissed with costs, such costs to include those reserved by the
court below for determination by this court.
___________________________________________________________________

JUDGMENT
___________________________________________________________________

PONNAN  JA (MPATI P, NUGENT JA, HURT and WALLIS AJJA concurring):

[1] In what follows I shall, for convenience, refer to the parties by their appellation
in the court below.  The plaintiff, Bonginkosi Vincent Mshengu, an employee of the
first defendant, Umgeni Water, a public statutory water utility established in terms of
the Water Services Act 108 of 1997, instituted action against it in the
Pietermaritzburg High Court, as also against the second defendant, the principal
officer of the Umgeni Water Retirement Fund, a pension fund duly registered in
terms of the Pension Fund Act 24 of 1956. The Minister of Water Affairs and Forestry
was cited in his official capacity as the third defendant, in terms of s 47 of the Water
Services Act, but as no relief was sought against him he took no part in the
proceedings either in this court or the court below.

[2] The summons, to the extent here relevant, alleged that:
'(a)
The Plaintiff was compelled to be a member of the Second Defendant.
(b)
The Plaintiff made monthly contributions to the Second Defendant for his retirement.
(c)
Upon retirement from the service of the First Defendant, including early retirement, the
Plaintiff would be entitled to both his withdrawal benefit and the First Defendant's contribution
to the employees' retirement fund held by the Second Defendant (retirement benefit).'
The plaintiff, pursuant to his contract of employment with the First Defendant,
claimed payment of the sum of R1 917 181.00, being the First Defendant's
contribution to the employees' retirement fund held by the Second Defendant. The
summons, inter alia, elicited the following special plea:

‘Any right which Plaintiff had to claim the alleged early retirement benefit arose on 1 April 2003, at the
latest, being the date from which Plaintiff elected to retire.
(a)
Such claim would have become prescribed on 30 March 2006.
(b)
The summons herein was issued on or about 28 June 2007.
(c)
In the premises, the claim herein has become prescribed.’

[3] The parties agreed, in terms of Rule 33 of the Uniform Rules, to a written
statement of facts in the form of a special case for adjudication before the high court
(per McLaren J). The facts agreed upon or assumed to be correct for the purpose of
the special case are:
'1
The plaintiff was employed by the First Defendant. During 2002, as result of restructuring by
the First Defendant, Plaintiff applied for a newly created post. This application was
unsuccessful and Plaintiff was notified accordingly by letter dated 20 November 2002.
During September 2002 the Plaintiff was tried by a disciplinary enquiry chaired by attorney
Gina Barbieri.
On 21 October 2003 Barbieri found the Plaintiff guilty of misconduct.
On 25 November 2002, and before the imposition of a sanction in respect of the alleged
misconduct, the Plaintiff notified First Defendant that he elected to take early retirement with
effect from 1 April 2003.
Had he taken such early retirement the Plaintiff would have been entitled to payment of both
his withdrawal benefit and First Defendant's contribution to the retirement fund administered
by Second Defendant on 1 April 2003.
In the event of his being dismissed prior to taking early retirement, then the Plaintiff would
only be entitled to his withdrawal benefit and not also the First Defendant's said contribution.
On 27 November 2002 the First Defendant dismissed the Plaintiff for the alleged misconduct.
Following on the dismissal the First Defendant instructed the Second Defendant to pay
Plaintiff only his withdrawal benefit.
On 7 January 2003 Second Defendant paid Plaintiff his withdrawal benefit.
The Plaintiff referred the dispute to the CCMA wherein he alleged that his dismissal was
unfair and at the CCMA hearing he asked for compensation rather than reinstatement.
On 25 September 2003 the CCMA Commissioner found that the dismissal was procedurally
and substantively unfair, did not reinstate Plaintiff but ordered First Defendant to pay Plaintiff
compensation in the amount of 9 months salary.
The First Defendant brought an application to the Labour Court to review the Commissioner's
decision and on 13 June 2006 the Labour Court confirmed the Commissioner's finding that
the dismissal had been substantively (but not procedurally) unfair and dismissed the review
application with costs.
On 29 June 2007 the Plaintiff instituted this action against the First and Second Defendants
for payment of the First Defendant's said contribution.'

[4] According to the parties, the question of law in dispute was thus:
'Whether or not the claim had become prescribed before summons was served on 29 June 2007.'
McLaren J answered the question posed in the negative, but granted leave to the
appellant to appeal to this court and, by consent, reserved the costs of the special
case for the decision of this court.

[5] Section 10 of the Prescription Act, No 68 of 1969 (the Act), provides for the
extinction of a debt after the lapse of periods determined in s 11. The period of
prescription applicable to the plaintiff’s claim is that provided for in s 11(d) of the Act,
namely 3 years. According to s 12(1) of the Act, prescription shall commence to run
'as soon as the debt is due'. The words ‘debt is due’ must be given their ordinary
meaning.1 In its ordinary meaning a debt is due when it is immediately claimable by
the creditor and, as its correlative, it is immediately payable by the debtor. Stated
another way, the debt must be one in respect of which the debtor is under an
obligation to pay immediately.2

[6] A debt can only be said to be claimable immediately if a creditor has the right
to institute an action for its recovery. In order to be able to institute an action for the
recovery of a debt a creditor must have a complete cause of action in respect of it.
The expression ‘cause of action’ has been held to mean: ‘every fact which it would be
necessary for the plaintiff to prove, … in order to support his right to judgment of the Court. It does not
comprise every piece of evidence which is necessary to prove each fact, but every fact which is
necessary to be  proved’; or slightly differently stated ‘the entire set of facts which give rise to an
enforceable claim and includes every fact which is material to be proved to entitle a plaintiff to
succeed in his claim. It includes all that a plaintiff must set out in his declaration in order to disclose a
cause of action. Such cause of action does not “arise” or “accrue” until the occurrence of the last of
such facts and consequently the last of such facts is sometimes loosely spoken of as the cause of
action.’3

1 The Master v I L Back and Co Ltd 1983 (1) SA 986 (A) at 1004F.
2 See Western Bank Ltd v S J J van Vuuren Transport (Pty) Ltd and others 1980 (2) SA 348 (T) at 351
and HMBMP Properties (Pty) Ltd v King 1981 (1) SA 906 (N) at 909 and the cases there cited.
3See Evins v Shield Insurance Co Ltd 1980 (2) SA 814 (A) at 838 and the cases there cited by
Corbett JA; see also Truter and another v Deysel 2006 (4) SA 168 (SCA) para 16, 18 and 19.

A plaintiff must thus have a complete cause of action at the stage when summons is
issued or at any rate when the summons is served.4

[7] On the view that I take of the matter, it was necessary for the plaintiff to allege
and prove the fact of his retirement in order to support his right to judgment. For as
long as the plaintiff’s purported dismissal was operative and in force, he was
precluded from doing so. His dismissal accordingly operated as an impediment to his
asserting any claim to the first defendant's contribution to his retirement fund
administered by the second defendant. Had the plaintiff commenced his action on 1
April 2003, he would not have been able to allege all the facts upon which his claim
was founded and in particular that he had retired. The fact of his dismissal would
thus serve to defeat his claim. It was only when the plaintiff’s dismissal was held to
be both procedurally and substantively unfair, that he was capable of alleging the
last of the material facts which had to be alleged in order to enable him to sue. It
follows that the plaintiff’s cause of action did not ‘arise’ or ‘accrue’ on 1 April 2003 as
contended by the defendant. Consequently the question of law was correctly
answered in the plaintiff’s favour.

[8] In the result the appeal is dismissed with costs, such costs to include those
reserved by the court below for determination by this court.

_________________
V M  PONNAN
JUDGE OF APPEAL

4 Mahomed v Nagdee 1952 (1) SA 410 (A) at 418; Marine and Trade Insurance Co Ltd v Reddinger
1966 (2) SA 407 (A) at 413D; Santam Insurance Co Ltd v Vilakasi 1967 (1) SA 246 (A) at 253 A-F.

APPEARANCES:

For Appellant:

R J Seggie SC

Instructed by:

Venn Nemeth & Hart Inc

Pietermaritzburg

McIntyre & Van der Post

Bloemfontein

For Respondent:

A de Wet

Instructed by:

Geyser Du Toit Louw and Kitching Inc

Pietermaritzburg

Honey Attorneys Inc

Bloemfontein

SUPREME COURT OF APPEAL OF SOUTH AFRICA

MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF APPEAL

FROM

The Registrar, Supreme Court of Appeal

DATE

26 November 2009

STATUS

Immediate

Please note that the media summary is for the benefit of the media and does not form part of
the judgment.

Umgeni Water  v Mshengu
(03/09) [2009] ZASCA 148 (26 November 2009)

Media Statement

Today the Supreme Court of Appeal (SCA) dismissed an appeal by Umgeni Water, a public statutory
water utility and the Umgeni Water Retirement Fund against a judgment of the Pietermaritzburg High
Court that a claim of one of the employees of the former, Bonginkosi Vincent Mshengu (the
respondent), for certain retirement benefits had not prescribed. The respondent was compelled to be
a member of the Retirement Fund, to which he made monthly contributions for his retirement. Upon
retirement from the service of Umgeni Water, including early retirement, the Plaintiff would have been
entitled to both his contribution and Umgeni Water’s contribution to the retirement fund. The
respondent, pursuant to his contract of employment with Umgeni Water, claimed payment of the sum
of R1 917 181.00, being its contribution to the employee’s retirement fund. The response it elicited
was that his claim had prescribed. The matter proceeded by way of a special case before the high
court.

The material facts agreed upon which the matter came to be decided are:
(i)
The respondent was tried by a disciplinary enquiry chaired by an attorney and found guilty of
misconduct.
(ii)
Before the imposition of a sanction in respect of the alleged misconduct, he elected to take early
retirement.
(iii)
Had he taken such early retirement he would have been entitled to payment of both his withdrawal
benefit and Umgeni Water's contribution to the retirement fund.
(iv)
In the event of his being dismissed prior to taking early retirement, then he would only be entitled to his
withdrawal benefit and not Umgeni Water’s contribution.
(v)
He was dismissed for alleged misconduct and was only paid his withdrawal benefit.
(vi)
He referred the dispute to the CCMA contending that his dismissal was unfair. The CCMA found that the
dismissal was procedurally and substantively unfair. Umgeni Water brought an application to the Labour

Court to review the decision of the CCMA. The Labour Court confirmed the finding of the CCMA that the
dismissal had been substantively (but not procedurally) unfair.

According to the parties, the question of law in dispute before the high court was whether or
not the claim had become prescribed. The high court answered that question in the negative.
The SCA held that it was necessary for the respondent to allege and prove the fact of his
retirement in order to support his right to judgment. For as long as the respondent’s
purported dismissal was operative and in force, he was precluded from doing so. His
dismissal accordingly operated as an impediment to his asserting any claim to Umgeni
Water's contribution to his retirement fund. Had the respondent commenced his action
immediately upon dismissal, as Umgeni Water contended he should have, he would not
have been able to allege all the facts upon which his claim was founded and in particular that
he had retired. The fact of his dismissal would thus serve to defeat his claim. It was only
when the plaintiff’s dismissal was held to be both procedurally and substantively unfair, that
he was capable of alleging the last of the material facts which had to be alleged in order to
enable him to sue. Consequently, according to the SCA, the question of law was correctly
answered in his favour. In the result the appeal was dismissed with costs.

--- ends ---