In October 2024 the Constitutional Court held that where there had been a breach of contract and the claimant initially sued for specific performance, the subsequent claim for damages had prescribed because it was not instituted within three years of the date of cancellation of the contract.
A property transaction between two individuals resulted in the breach of the sale agreement on 13 September 2011. The buyer applied to the high court for specific performance of the agreement and asked for cancellation and damages if performance was not given. The high court issued an order on 7 August 2012 for specific performance and the seller remained non-compliant. The buyer formally cancelled the sale agreement on 23 August 2012. An action for damages had to be issued within three years from that date. The damages claim was only instituted on 18 April 2016.
The court restated some well-established legal principles. A debt gives rise to a right of action and when the debt is extinguished, so is the right of action. It is important to draw a clear distinction between the contractual remedy of specific performance, and of cancellation and damages. Specific performance is based on the contract itself. The primary remedy for breach of contract is cancellation and damages. Prescription for a damages claim for breach of contract commences to run at the earliest from the time of the breach of contract. A right to claim performance originates on conclusion of the contract and prescription of the debt would commence running as soon as performance is due under the terms of the contract. When an election is made to sue for specific performance, that lawsuit cannot be a basis for the judicial interruption of the running of prescription in respect of a cancellation and a damages claim.
The buyer’s attempt to rely on the judicial interruption of prescription during the period of the action for specific performance therefore failed. Where a creditor has two rights, or causes of action then there are two corresponding debts. For prescription to be judicially interrupted in respect of a damages claim, there must be an existing claim for damages. That was not the case here. The claim was dismissed.
In this situation it is said that a person faced with choices of claims cannot approbate and reprobate. This is legalese for ‘you cannot have your cake and eat it’.