Macleod v Kweyiya

In 1988, when the respondent was approximately four years old, she sustained injuries in a motor vehicle accident and was rendered a paraplegic. The appellant, a practising attorney, was instructed by the respondent's mother to institute a damages claim against the statutory insurers of the two drivers. The claim was partially settled in 1996, with R25,000 received from one insurer and 35% liability accepted by the other. In May 1997, the claim was settled for R99,500 (total R124,500). The settlement was accepted by the mother as guardian. In March 1998, the appellant accounted to the mother in detail, indicating R14,000 cash payment, R30,081.05 for a house, and various disbursements. At the time of settlement, the respondent was approximately 13 years old. In early 2006, after a dispute with her mother about the house, the respondent visited the appellant's offices. On 19 April 2006, she received documents including the settlement details via email from the appellant's candidate attorney. On 8 April 2009, when she was almost 25 years old, she issued summons claiming the settlement was negligent and should have been about R2.1 million instead of R124,500.

• Whether the respondent's claim for damages against the appellant had prescribed
• Whether the respondent knew or could have reasonably known the identity of the debtor and the facts on which her debt against the appellant arose before April 2006
• The application of section 12(3) of the Prescription Act 68 of 1969 regarding constructive knowledge
• Whether an adverse inference should be drawn from the respondent's failure to testify
• The evidentiary burden on a defendant pleading prescription

The appeal was dismissed with costs.

The binding legal principles established are: (1) In terms of section 12(3) of the Prescription Act 68 of 1969, a defendant pleading prescription bears the full evidentiary burden to prove the date on which the plaintiff obtained actual or constructive knowledge of the identity of the debtor and the facts from which the debt arises; (2) The burden only shifts to the plaintiff if the defendant establishes a prima facie case; (3) No adverse inference may be drawn from a plaintiff's failure to testify unless a prima facie case requiring rebuttal has been established; (4) Section 12(3) seeks to prevent negligent, not innocent, inaction, and what constitutes reasonable care must be assessed with reference to the particular circumstances in which the plaintiff is situated; (5) A plaintiff who, as a minor, innocently and reasonably believed that her guardian and attorney acted in her best interests is not required to investigate or challenge that settlement merely upon attaining majority, absent some intervening knowledge or event that would displace that innocent belief; (6) Constructive knowledge requires proof that a reasonable person in the plaintiff's position would have acquired knowledge by exercising reasonable care, not merely that information was theoretically accessible.

The court made non-binding observations that: (1) Courts should recognize that less evidence may suffice to establish a prima facie case where the matter is peculiarly within the knowledge of the opposite party, but this does not alter the onus which rests on the defendant pleading prescription; (2) The test for constructive knowledge requires only knowledge of the minimum facts necessary to institute action, not all the evidence that would ensure the ability of the creditor to prove its case comfortably; (3) The difficulty a defendant may face in establishing the date on which a creditor first learned the identity of the debtor or the facts giving rise to the debt must not be exaggerated - such difficulty faces litigants in a variety of cases and may cause hardship, but hard cases do not make good law; (4) The principle that the onus of proof lies on the party who has peculiar or intimate knowledge of a fact is not a principle of South African law; (5) A creditor cannot simply sit back and by supine inaction arbitrarily and at will postpone the commencement of prescription.

This case is significant in South African law for clarifying the application of section 12(3) of the Prescription Act 68 of 1969, particularly regarding constructive knowledge in professional negligence claims. It establishes important principles about: (1) the evidentiary burden remaining on defendants to prove prescription, with no adverse inference drawn from plaintiffs' failure to testify unless a prima facie case is established; (2) the distinction between innocent and negligent inaction, with prescription seeking to prevent only the latter; (3) the reasonableness standard being assessed with reference to the particular circumstances of the plaintiff, including age and vulnerability; (4) the fact that attaining majority does not automatically trigger a duty to investigate past settlements; and (5) the requirement for some intervening knowledge or event to displace an innocent belief formed during minority. The case is particularly important for claims against attorneys for professional negligence by former clients who were minors when the alleged negligence occurred.