20 September 2017 by and Dispute Resolution Alert

Time [for the] bar

Prescribed; time barred; extinguished: all music to the ears of a defendant.

If not prosecuted, civil claims normally prescribe within three years. This is according to the Prescription Act, No 68 of 1969. Freedom of contract allows parties to limit this to an even shorter period. Such limitation is hardly unusual. 

But what if the parties agree to a time limit for the prosecution of claims arising out of a contract and then a claim arises not out of the contract, but related to the services provided under that contract? Are such claims also time barred? 

In G4S Cash Solutions v Zandspruit & Devland Cash & Carry (Pty) Ltd [2016] ZASCA 113, G4S entered into identical service agreements with both Devland and Zandspruit to collect, convey, store and deliver money on their behalf. 

Clauses 9.1 and 9.9 of the service agreements recorded that: 

9.1 [G4S] shall not be liable for any loss… pursuant to or during the provision of Services… unless such loss… occurs while the money is in the custody of [G4S]”

9.9 [G4S] shall not be liable in respect of any claim unless … summons has been issued and served within 12 months from the date of the event.”

During 2010 and 2011, Zandspruit and Devland fell victim to theft. The perpetrators imitated G4S’s procedures utilising its uniforms, identification cards and vehicles to “dupe” Devland and Zandspruit into willingly handing over large sums of money.

Although proving the breach of a contractual term would have been much simpler, Zandspruit and Devland missed the deadline for a claim arising out of the breach of a contractual term. Essentially, they were caught napping, leaving little other choice but to pursue their delictual claims. Thus, they alleged that G4S owed them a legal duty to: 

  • put in place procedures to ensure that its uniforms, identification cards and vehicles could not be copied; and
  • advise its clients if its uniforms, vehicles and identification cards had been lost, stolen or used by someone else.

In failing to comply with this alleged legal duty, G4S was negligent – or so Zandspruit and Devland argued - and as such should have been held liable. Countering, G4S argued that, even though the claims were not based on a breach of the contract, they were still time-barred. Zandspruit and Devland hit back, arguing that the time limitation only applied to contractual claims and that their delictual claims were perfectly within time.

But, importantly, the losses suffered by Zandspruit and Devland had nothing to do with the provision of services by G4S. In fact, had G4S been on the property providing services at the time of the loss, it is likely that the perpetrators would have been exposed!  

And so, the Supreme Court of Appeal agreed with Zandspruit and Devland: Their claim was not caught in the crosshairs of the time-bar clause and thus capable of prosecution.

Arguably, the parties could have extended the scope of the time-bar clause to include delictual claims at the time of negotiating the contract. While there is no guarantee that this would have been enough to get G4S over the line, it certainly would have provided a fighting chance.

Everyone has a right to approach a court for relief. Because of this, our courts are slow to deprive a party of this right in the absence of clear and unambiguous wording. 

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