ATB Chartered Accountants (SA) v Bonfiglio

The respondent, Edna Bonfiglio, was the sole member of a close corporation operating a stationery business. Facing financial difficulty, she mandated ATB Chartered Accountants, her auditors, to find a buyer and to provide professional advice regarding the sale of her business. On 5 April 2002, ATB introduced a purchaser and drafted an offer to purchase in terms of which the respondent sold her interest and loan account for R825 000, payable in instalments from business profits. The purchaser defaulted almost immediately. Despite revised payment arrangements and legal action against the purchaser, he proved unable to pay and the business entity was liquidated. The respondent then sued ATB in June 2006 for contractual breach and/or negligence, alleging failure to ensure the purchaser’s financial soundness and adequate security. ATB raised a special plea that the claim had prescribed.

The appeal was upheld with costs. The order of the North Gauteng High Court was set aside and replaced with an order upholding the special plea of prescription and dismissing the respondent’s action with costs.

The case clarifies the application of sections 12(1) and 12(3) of the Prescription Act in claims against professional advisers, confirming that prescription does not await final quantification of loss or exhaustion of remedies against third parties. It reinforces that knowledge of probable loss and the material facts, not certainty or execution proceedings, triggers the running of prescription.