In Stratton Oakmont (Pty) Ltd v Oosthuizen Du Plooy Attorneys (2002/2019) [2025] ZANWHC 255 (2 December 2025), the High Court reaffirmed the professional obligations of attorneys and the consequences of an attorney's conduct that results in the prescription of a client’s claim. The court held the attorneys liable for damages after they failed to institute proceedings timeously, resulting in the client’s claim prescribing.
The dispute arose from a contractual arrangement between Stratton Oakmont (Pty) Ltd (Stratton) and JM Tshabalala Trading (Pty) Ltd (JMT), under which Stratton advanced funds to JMT to fulfil a supply contract with the South African National Defence Force. When JMT defaulted on repayment, its directors executed two acknowledgements of debt (AODs) in favour of Stratton, totalling ZAR 1,9 million, with agreed instalments and an acceleration clause. Despite this, JMT and its directors failed to repay the debt, and Stratton instructed Oosthuizen Du Plooy Attorneys (ODP Attorneys) to recover the amounts due.
Stratton engaged ODP Attorneys in January 2016 to institute proceedings against JMT and its directors. Under South African law, the prescription period for such claims is three years. ODP Attorneys failed to issue summons within this period, allowing the claim to lapse. This inaction formed the basis of Stratton’s claim against ODP Attorneys for professional negligence.
Stratton alleged that ODP Attorneys breached its mandate by failing to issue summons timeously, allowing the claim based on the AODs to prescribe. Alternatively, Stratton claimed that it had an unjust enrichment claim against JMT and its directors, which had also been allowed to prescribe. In response, ODP Attorneys argued that the AODs were unlawful credit agreements under the National Credit Act (NCA) because Stratton was not a registered credit provider, and that any claim instituted against JMT would have failed.
The court rejected ODP Attorneys’ defence. It found that the NCA did not apply to the AODs or the underlying agreement, noting that the parties never intended the Act to govern their arrangement and that the agreements qualified as large agreements involving juristic persons. Even if the NCA was applicable, the court held that ODP Attorneys should have pursued an unjust enrichment claim. By failing to act, the attorneys breached their contractual and fiduciary duties to exercise reasonable care, skill, and diligence.
The court found that the attorneys had no defence to the merits of the case, noting that "[No] amount of legal acrobatics or sophistries can exonerate [their] negligent conduct". Ultimately, the attorneys were found liable with the court finding that a punitive costs order would be appropriate in the circumstances as "the litigating posture" of the attorneys must be frowned upon.
ODP Attorneys was ordered to pay Stratton ZAR 1,9 million plus interest and costs. The decision underscores that attorneys must take care to implement the instructions of their clients timeously.
