Debt: How to claim prescription in practice and how to enter a special plea

[Citizen X]

A reintroduction to extinctive prescription
The case for extinctive prescription claims in South Africa
I have resolved to reintroduce extinctive prescription in an academically acceptable manner. To do so , one would have to have a source of references and some form of table of contents.
References: I will cite a full source of references at the end of this topic, it won’t be anything soon! In the interim, I’ve resolved to using footnotes to cite references.
Table of contents: I do have a table of contents, but it won’t be possible to include page numbers for the purpose of these posts, but you may accept that posts will follow the table of contents.
Posts in stages: I will make posts in stages, and number them i.e. Post 1

TABLE OF CONTENTS
Number	Item	Page
1	Introduction
2	Hypothesis
3	An Outrageous Question
4	The Prescription Act as a Statute
4.1	A Statute remains an active Statute until repealed
4.2	The National Credit Act and a sense of urgency, The Prescription Act 68 of 1969 and no sense of urgency
4.3	No definitional clause in 1969 Act
5.	Historical Framework
5.1	Prescription dates back centuries
5.2	Extinctive prescription forms part of South African Private Law
6	Interpretation of the 1969 Act
6.1	Statutory interpretation
6.2	Stages of interpretation of the 1969 Act
6.3	The concept of extinctive prescription
6.4	The common law position of extinctive prescription
6.5	Extinctive prescription in practice
6.5.1	Meaning of as soon as the debt is due
6.5.2	Meaning of debt
6.5.3	Debtor’s wilfully preventing creditor from becoming aware of the knowledge of the debt
6.5.4	Knowledge of the debtor
6.5.5	Corporate South Africa is by and large an exception to section 13 of the 1969 Act
7	The difference between an extinctive prescription claim and a special plea of prescription
7.1	Example of Plaintiff’s particulars of claim
8	The need to invoke extinctive prescription when claiming prescription directly from a creditor
8.1	A case in point
8.2	Remedy in cases where the creditor refuses to process an extinctive prescription claim
8.3	Debt review and extinctive prescription
9	A parallel between Public Law and Private Law
10	Professional ethics and an attorney providing a debt collector function
10.1	Estoppel
10.2	Law and a crisis of an ethical nature
11	Choice of research framework
11.1	Research design and methods
11.2	Quantitative research
11.3	Post mortem Questionnaire
12	Qualitative research
12.1	Background
12.2	The pre-determined approach
12.2.1	Mr A
12.2.2	Mr B
13	An investigative journalism approach
13.1	A gross abuse of the section 57 and 58 procedures of the Magistrates Court Act 32 of 1944
13.1.1	Mr F and an eighteen year old debt
13.1.2	The document Mr F signed
14	A theory as to why a potent statute can become diluted over time
14.1	Distortion of communication
14.2	A case in point
15	Findings
16	Recommendations
17	Conclusion
18	References
	Annexure A: Questionnaire

[Citizen X]

Post 1 1. Introduction
This work will address the practical position of extinctive prescription claims in South Africa today. It will address the ease alternatively the difficult of claiming extinctive prescription in terms of section 11(d) of the Prescription Act 68 of 1969. It will reveal shortcomings in industry and the Prescription Act itself and perhaps more importantly it will make recommendations for the amendment of the 1969 Act. This work in and of itself is an impassioned plea to the South African Law reform commission to initiate the amendment of the 1969 Act. The purpose of such recommended amendments is to make the Act more meaningful and applicable to a debtor who is eligible for an extinctive prescription claim and simply wants to claim extinctive prescription. The finished product of this work includes: An extinctive prescription precedent, a recommended covering letter, a recommendation of how the Act should be amended, a recommended schedule where such a schedule would be preferred to an amendment, a recommendation for enabling legislation where enabling legislation would be preferred to an actual amendment of The Act or an addition of a schedule to the Act and a recommendation for a training program on extinctive prescription with specific learning outcomes. This essay will address debts which become eligible for an extinctive prescription claim after a period of 3 years has elapsed from the date of the debt becoming due without any events that interrupt prescription. For classification purposes the natures of these debts are: 1. personal loans, credits cards and vehicle finance providers by registered financial service providers, 2: Retail apparel and accessories provided by registered retail credit providers, 3: Furniture and household goods and appliances provided by registered retail credit providers and 4: Telecommunication goods, service and accessories provided by registered credit providers. My reference to creditor is by and large corporate South African banks, financial institutions and major retailers. This reference is not only essential but rather quite vital as I will demonstrate in this essay that by and large the provisions of sections 12(2), (3) and section 13[with the exception of section 13(b)] will not be applicable to these organisations alternatively will not find reference to any meaningful dispute where such organisations are the creditor. For the purposes of extinction of debt by the passage of time, sections 10 up to and including section 18 of the 1969 Act apply. What I’m about to postulate is at immediate odds with ‘SLRC Discussion Paper 126, Project 125, Scope of Review’(2011:5) where it is provided that, ‘The review is limited to harmonisation of prescription periods, and does not include a general review of prescription in general, or the extinction of debts by prescription in particular.’



2. Hypothesis

The Prescription Act 68 of 1969 appears to be an unproblematic South African Statute. This inference is drawn because the Act itself is fairly straightforward and the requirements for extinctive prescription are reasonably clear. The Act in and of itself does not answer many pertinent questions such as: How does one claim extinctive prescription? How does a creditor process an extinctive prescription claim? How does the finality and legal certainty which extinctive prescription is designed to promote get implemented? Does the creditor merely access the debtor’s account and add a note, “This debt is prescribed, the debtor has claimed extinctive prescription,” or does the creditor confirm to signed letterhead that a debtor has claimed extinctive prescription; the prescription claim has been processed, that the debt is prescribed, that the creditor abandons his claim and that all credit bureaus have or will be updated accordingly? The ultimate problem statement is: How does a debt, regardless of its monetary amount, which is eligible for extinctive prescription, becomes extinguished by prescription in practice to a point where a debtor legally owed a certain amount of money to a creditor yesterday to a point where after the fact of an extinctive prescription claim the debtor no longer owes the creditors any money whatsoever and there is certainty about this fact both to the creditor and to the debtor.

Given the overall aims set out above and for the sake of a clearly defined hypothesis, I have chosen a slight deviation from conventional hypothesis by dissecting my hypothesis into six problem statements.
1. Many financial institutions and major retailers don’t have rules, regulations, policy and procedure in place to process extinctive prescription claims;
2. Many financial institutions and major retailers cannot appreciate the difference between an extinctive prescription claim and a special plea of prescription;
3. Many debt collectors and attorneys acting on instruction of financial institutions and major retailers intentionally preclude a debtor from claiming extinctive prescription and engage in unethical conduct to get a debtor to unwittingly make a payment on a debt that would otherwise be eligible for an extinctive prescription claim. The debtor then unwittingly acts to his/her own prejudice by causing the prescription period to run afresh
4. Many debt collectors and attorneys acting on instruction of financial institutions and major retailers intentionally preclude a debtor from claiming extinctive prescription and engage in unethical conduct to get a debtor to unwittingly acknowledge debt that would otherwise be eligible for an extinctive prescription claim. The debtor then unwittingly acts to his/her own prejudice by causing the prescription period to run afresh
5. There is a training and development need for extinctive prescription in banks, financial institutions and major retailers. Many financial institutions and major retailers don’t know how to process an extinctive prescription claim. It’s not a case where they don’t want to process such an extinctive prescription claimbut more a case that they don’t know how to process an extinctive prescription claim simply because they received no adequate training on extinctive prescription.
6. Many financial institutions and major retailers are used to a situation where they enforce their rights to collect a debt either by using their own internal special collections department, a debt collector or an attorney. Consequently they are used to a situation where they sue out summons for a debt and in many cases easily obtain judgment as the debtor does not file a notice of intention to defend. The aforementioned are simply not used to a situation where a debtor attempts to enforce his/her rights with regards to extinctive prescription. An analysis of these presuppositions will highlight the plight of a debtor who merely wants his/her debt obligation to be extinguished by extinctive prescription based on what the law itself says.
Gilmore S (2011:1) states that, the art of practising law is not to know all the answers, but to know where to find the answers. In order to find the answers, the practitioner must know what to look for. In order to know what to look for the practitioner must be able to sift the facts at hand and to define the problem he or she is dealing with’ (V Tunkel & A de W Horak xi). Academic study should teach one the requisite skills to ‘sift the facts at hand’. However, one is still left with the problem of finding the authority that you need to substantiate your case or finding the written law that will back up whatever case you are making. The information lies in all the physical (both print and electronic) sources of our law — the common law; the legislation; the law reports; the books and the encyclopaedias.
I intend to substantiate my case.
3. An outrageous question
Reason with me! Is it necessary for us to reinvent the wheel by using the concept of the ‘Twelve Tables,’ to articulate that certain debts become eligible for an extinctive prescription claim alternatively prescribe after the passage of a certain period of time? In order to give full effect to this outrageous question alternatively satirical gesture, a Twelve Table equivalent would be a large notice board in every bank, financial institution and major retailer’s various branches stating that certain debts prescribe after 3 years has elapsed from the date which the debt became due alternatively the month after the date of the last payment, provided that no payments have been made within this 3 year period, no acknowledgement of debt has taken place and no summons has been sued out! There you have it! Our problem statement glaring at us from this page namely most debtors are unaware of their rights with regards to extinctive prescription and the actual procedure of processing an extinctive prescription claim are widely varied in Banks, Financial Institutions and major retailers. What we require here is simple standardization. Allow me to reason with you to a point where we all draw the same conclusions. To reason means to be able to identify and follow the arguments presented by specific thinkers (i.e. what claims are made or conclusions drawn and how they are substantiated [the premises]) and to be able to assess the quality and validity. UNISA(2012: vii). All reasoning is thinking, but not all thinking is reasoning. Copi (1969:4). Since valid inferences are inferences where the conclusion is logically entailed by the premises, interest in logic is focused on the study of logical entailment or consequence. All wood et al(1997:16). Reason with me!







4. The Prescription Act as a Statute

The Prescription Act 68 of 1969 is classified as a statute, alternatively legislation, alternatively an Act of Parliament, alternatively enacted law texts.^[1] It may also be classified as original legislation. This Act was assented to on 23 May 1969 and commenced on 1 December 1970. It was gazette on 4 June 1969; Government Gazette number 2421 Volume 48, as at this time one could buy the Government gazette from any Post Office for 10 cents.^[2] There is no doubt whatsoever that it is an authoritative source of South African Law by mere virtue of its classification as an Act. The 1969 Act is not an academic opinion neither is it an article in a law journal. It is for all practical intents and purposes the law.

4.1 A Statute remains an active Statute until repealed
Regardless of how the implications of its provisions may be accepted by creditors and debtors, it remains the law. The notion that corporate South Africa may find it to be unjust in so far as it brings about the extinction of a right to claim a debt after the passage of time, either by the debtor claiming extinctive prescription from the creditor or by the debtor filing a special plea of prescription in court, does not negate the fact that the Prescription Act is law and remains law. A law, an Act of parliament need not be just, reasonable or fair to be law. In fact we have a number of Acts which are perceived to be unjust, unreasonable or unfair. The Choice of Termination of Pregnancy Act 92 of 1996 is just one example. Many religious organizations have expressed outrage of the practical implications of this Act which allow for a woman regardless of her age to have an abortion legally. The outrage expressed is of no consequence to the Act itself nor does it change its status as Legislation. The 1969 Act should be understood from this perspective. It is a legitimate statute in much the same way as: The Criminal Procedure Act 51 of 1977, The Divorce Act 7 of 1979, The Wills Act 7 of 1953, The National Credit Act 34 of 2005 and the Consumer Protection Act 68 of 2008, to name a few. If one were to ask a simple question: What do the aforementioned have in common? The simple answer would be they are all statutes.

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[1] Vide Prescription Act 68 of 1969 http://0-discover.sabinet.co.za.oasi...ument/NTL12110

[2] Vide http://0-discover.sabinet.co.za.oasi...Gov/gg2421.pdf. Date of use 3 July 2012

[Citizen X]

Post 2
4.2 The National Credit Act and a sense of urgency, The prescription Act 68 of 1969 and no sense of urgency
The National Credit 34 of 2005 and its resulting regulations have impacted directly on litigation. A creditor must first send a letter of demand which is delivered to a consumer at his address before suing out summons. The Plaintiff’s Particulars of Claim will invariably contain the following or similar assertion (Particulars of claim will never start with this paragraph! It’s included here to demonstrate that the NCA is held in such high regard that even obligatory paragraphs need to be included in the Plaintiff’s particulars of claim):


5 The Plaintiff is entitled to approach the Court for an Order as contemplated in Section 30 of the National Credit Act of 2005 in that:

5.1 The Plaintiff issued a Notice to the Defendant in terms of Section 129 of the Act and delivered such Notice in the prescribed manner,
5.2Notwithstanding the above, the Defendant has not responded to the Notice, alternatively has responded to the Notice by rejecting the Plaintiff’s proposals;
5.3The time periods, as prescribed in Section 130 of the Act has lapsed;
5.4The Plaintiff has no knowledge of any debt review proceedings instituted by the Defendant as provided for in section 86 of the aforesaid Act.
With the commencement of the National Credit Act 34 of 2005, we have seen changes to Court Rules, changes to the how litigation should commence, a body which one can complain to for non- compliance by the creditor and Corporate South Africa developing policy documents and training programs to be compliant. This is in stark contrast to The Prescription Act.

4.3 No Definitional Clause in 1969 Act

On conducting a post mortem of this Statute with the precision of a surgeon about to conduct surgery, it was alarming to find that the 1969 Act does not include a definitional clause section nor does it have a preamble. A preamble is necessary to clarify the underlying philosophy of the Act. The next enquiry is then: What is the purpose of the 1969 Act? The purpose is found in the long title. In this case it simply states ‘To consolidate and amend the laws relating to prescription’.^[1]The 1969 Act does have practical importance.^[2] It should be the subject of greater theoretical analysis and it should not be seen as a technical and theoretically unrewarding aspect of statute law.^[3] If it is accepted that the 1969 Act is a rule of law and further that there is some degree of uncertainty as to its interpretations by both creditors and debtors and further that there is uncertainty as to the difference between an extinctive prescription claim and a special plea of prescription, then it should at the very least be also accepted that some form of procedural-law mechanisms are required to give proper effect to the 1969 Act. Law means any law, proclamation, ordinance, Act of Parliament or other enactment having the force of law.^[4]


5. Historical framework

5.1 Prescription dates back centuries
The concept of prescription is not new at all. It originates from Roman law. It dates back to what is commonly referred to as ’The era of early Roman Law(753 BC – 250 BC).’^[5]The earliest manifestation of prescription dates back to 450 BC to what is known as the ‘Twelve tables.’ The law was literally written on metal plates and placed in the central business district of that day. Anyone could go and inspect this written law.^[6] In 448 BC extinctive prescription was not distinguished from acquisitive prescription. It noteworthy that the concept, that one could obtain rights, merely by the passage of time can be traced to The Law of the Twelve Tables. The Twelve tables were written on twelve bronze tablets which were strategically placed in the central business district of that day so that all could read its contents. Table six, law six reads as follows: ‘Immovable property shall be acquired by usucaption after the lapse of two years; other property after the lapse of one year.’^[7] So there it was for everyone to see, the simple passage of time could allow you obtain rights today, which as early as yesterday you did not enjoy!^[8]
The nature and effect of prescription will always remain the essential point of departure. The first prescription time period was introduced by emperor Theodosius in AD 424. It was referred to as praescriptio longi temporis.^[9] Roman Dutch writers were largely unanimous in postulating that prescription has a strong effect, extinguishing the obligation itself as well as the remedy.^[10]
5.2 Extinctive prescription forms part of South African Private Law
The 1969 Act rightfully belongs to South African Private Law. The accepted wisdom is that South African Private Law was influenced by Roman Dutch Law which originated in Roman law itself. Extinctive Prescription as a lawful concept found its way into statute by way of The Prescription Act of 1943.^[11] Before the commencement of the 1969 Act, Professor J C de Wet was given a mandate by the Law Reform Commission to prepare a paper in which recommendations were provided for amendment of the 1943 Act.^[12] It was apparent that interpretation of the 1943 Act was problematic. Prof de Wet recommended a system of prescription where the actual debt would automatically become extinct when the complete prescription period had run its course.^[13] Interestingly the predecessor the 1943 Act does have a definitional clause whereas the 1969 Act has none. In section 3(1) of the 1943 Act Extinctive prescription is defined as the rendering unenforceable of a right by the lapse of time.^[14] Section 10(1)(d) of the 1969 Act is entitled ‘Extinction of debts by prescription.’ This section states that subject to the provisions of this Chapter and of Chapter IV, a debt shall be extinguished by prescription after the lapse of the period which in terms of the relevant law applies in respect of the prescription of such debt.^[15] Section 11(d) of the 1969 Act is entitled Periods of prescription of debts and states ‘The periods of prescription of debts shall be the following: save where an Act of Parliament provides otherwise, three years in respect of any other debt.^[16]’

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[1] Loc cit n 4

[2] Loc cit n 4

[3] Vide MM Loubster. Extinctive Prescription. 1996. 1

[4] Loc cit n 4 Prescription Act 68 of 1969 & Vide s 2 Interpretation Act 33 of 1957. http://0-discover.sabinet.co.za.unisa.ac.za/document. Date of use 3 July 2012

[5] Vide Origins of South African Law Studyguide.2008. 44

[6] Op cit 49

[7] Vide The Law of the Twelve Tables http://www.constitution.org/sps/sps01_1.htm. Date of use 3 July 2012 et seq Law of the Twelve Tables http://www.britanica.com/ebchecked/t...-Twelve-Tables

[8] Confer Van Oven JC. Leerboek van Romeinsch Privaatrecht. (3rd ed 1948). 82

[9] Op cit page 4 MM Loubster

[10] Ibid page 5, confer De Wet Opuscula Miscellanea page 104

[11] Vide Prescription Act 18 of 1943 http://0-discover.sabinet.co.za.oasis.unisa.ac.za/document. Date of use 3 July 2012

[12] Infra n 18 Page 6

[13] Confer n 8 MM Loubster Page 7

[14] Supra n 16 s 3(1)

[15] Op cit n 4 s 10(1)

[16] Op cit n 4 s 11(d)

[Citizen X]

Post 3 Ps if footnotes don't make complete sense in the previous two posts it's becuase the preface was not included and I copied cut and paste from the word document that had the preface, to resolve this problem, I have deleted the preface from the document I am currently copying, cutting and pasting from, it should make sense from here!
6. Interpretation of the 1969 Act
Its common cause, that one of the tasks of the Judiciary, is to interpret legislation. The accepted wisdom is that we look to the Supreme Court of Appeals for guidance when interpreting legislation. It’s furthermore accepted that words in legislation may not bear their ordinary dictionary meaning. This is why it’s not only essential but rather quite vital for a Statute to have a definitional clause. A mere definitional clause may well be part of the solution to easing an already burdened court roll in South Africa.
Section 165(1) of the Constitution of South Africa, states that the judicial authority of the Republic is vested in the courts.^[1] The Judiciary performs an adjudicatory function. In order to perform this task satisfactorily, the judiciary is tasked with interpreting legislation and applying legal rules to any legal dispute which may be brought before it with the objective of imposing a sanction if it finds that a legal rule has been breached, enforcing a right or discharging an obligation. It is accepted that when one summarises a case four components prevail.1: Facts of the case, 2: The issues to be decided, 3: The findings of the court and 4: The reasons for the courts decision.^[2]
6.1 Statutory interpretation
Statutory interpretation refers to the process of interpreting any Statute as well as the actual rules and principles that regulate such interpretation. The 1969 Act is still in operation, as such, it can therefore be interpreted. The legal authority of the 1969 Act has not changed neither has its effects been diminished by any Supreme Court of Appeals case. It should actually have more potency today as debt is in the public interest and we now living in the aftermath of the global economic meltdown. This economic meltdown had knock off effects on many countries including South Africa. Debt and all aspects of debt should be taken very seriously! The legal position is that all Legislation remains in force until either one of two things happen: the legislation is amended and repealed by the Legislature, or the Legislation is amended and declared unconstitutional by the court.^[3] Statutory interpretation lacked a meaningful process before 1994. The result was the inevitable application of conflicting rules, principles and methods.^[4]


6.2 Stages of Interpretation of the 1969 Act

I support the contextualist method of interpreting a Statute. This is an interpretative method that focuses on the broader context of legislation. This will always be subject to guidance from the SCA on interpretation of a specific section. Confer: UNISA:IOS(2010:10). The primary rule of interpretation is therefore to determine the purpose of legislation and to give effect to that purpose.
6.3 The concept of extinctive prescription
A debt will be extinguished by the simple passage of time provided that a period of three years has elapsed from the date that the debt became due and no events to interrupt prescription have transpired. The most notable and detrimental events that cause the prescription period to run afresh from the date that such an event occurred is payment by the debtor and acknowledgement of debt by the debtor.
According to SALRC, project 125(2011:2), Prescription is a means of acquiring or losing rights, or of freeing oneself from obligations, by the passage of time under conditions
prescribed by law. It derived from classical Roman law and further developed under Justinian.
According to Loubser (1996:8), extinctive prescription simply concerns questions of fact, namely whether a particular period of time, prescribed by statute in respect of a particular obligation, has passed, and whether other conditions prescribed by statute for reliance on prescription have been met. If so, and if the debtor chooses to rely on it, prescription takes effect.
The intention of the legislators with specific regards to section 11(d) of the 1969 Act is clear. Extinctive prescription is to have a strong and effective effect.^[5]


6.4 The Common Law position of Extinctive Prescription

Roman-Dutch Law as influenced by English Law became the Common Law of South Africa. The sources of Roman-Dutch Law are: The old writers, Legislation, Case Law, Collections of opinions and Custom.^[6]
The South African Law Reform Commission was established in 1973. Section 4 of South African Law Reform Commission Act 19 of 1973 stipulates the objectives of SALRC are to do research with reference to all branches of the law of the Republic and to study and to investigate all such branches of the law in order to make recommendations for the development, improvement, modernization or reform thereof, including-
(a) the repeal of obsolete or unnecessary provisions;
(b) the removal of anomalies;
(c) the bringing about of uniformity in the law in force in the various parts of
the Republic;
(d) the consolidation or codification of any branch of the law; and
(e) steps aimed at making the common law more readily available.^[7]
The Law Reform Commission has achieved much in the harmonisation of (Western) Common Law and Indigenous Law in South Africa.^[8]



According to SALRC, the reasons given in common law for prescription of debts are the following:
(a) After a specified period of time the fault of a creditor (claimant) in taking care of his or her claim should be visited by certain penalties, namely, the extinction or rendering unenforceable of the claim;
(b) Prescription relieves the debtor of having to defend a claim long after the event;
(c) A state of affairs which has existed for a considerable period of time ought to be legally formalised in the interests of certainty in legal affairs.
(d) In general the courts seem to favour the idea that the primary purpose of prescription is to punish the slovenly creditor, although fault on the creditor’s part is not, and never has been, a requirement for prescription.
(e) Creditors (claimants) and debtors (defendants) have competing interests. It is unfair that a debtor should be subject to an indefinite threat of being sued. It is in the interest of creditors to have as possible to institute a claim.^[9]
According to Loubser(1996: 22), the main object of extinctive prescription is to create certainty and finality in the relationship between creditor and debtor after the lapse of a period of time, and the emphasis is on protection of the debtor against a stale claim that existed for such a long time that it becomes unfair to require the debtor to defend himself against it. The primary consideration is therefore one of fairness to the debtor.
In De Jager and others v ABSA Bank Bpk,^[10] on 29 September 2000, the court examined the underpinnings of extinctive prescription. The court accepted that its ultimate purpose was to promote certainty in the affairs of people. Its purpose is to promote fairness towards a debtor.
In Uitenhage Municipality v Molloy 1998^[11] 1 All SA 146 (A) the court provided that the rationale in the cases which have held that a creditor cannot “by his own conduct postpone the commencement of prescription” by refraining from satisfying the condition which would render a debt due and payable, apply equally where the creditor has failed to take or initiate the steps which fall within his or her power to make it possible for such a condition to be satisfied. One of the main purposes of the Prescription Act is to protect a debtor from old claims against which it cannot effectively defend itself because of loss of records or witnesses caused by the lapse of time. If creditors areallowed by their deliberate or negligent acts to delay the pursuit of their claims without incurring the consequences of prescription that purpose would be subverted. In the headnote of this case, at page 140, the editor’s summary articulated that one of the main purposes of the Prescription Act 68 of 1969 was to protect the debtor from old claims against which he could not effectively defend himself – If creditors were allowed by their deliberate or negligent act to delay the pursuit of a claim without incurring the consequences of the prescription, that purpose would be subverted.
Loubser(1996:22), eloquently states that the policy objectives of extinctive prescription have been justified in glowing terms by story: ‘ laws, thus limitating suits, are found in the noblest policy. They are statutes of repose, to quite titles, to suppress frauds, and to supply the defiency of proofs arising from the ambiguity and obscurity or the antiquity of transactions. They proceed upon the presumption that claims are extinguished, or ought to be held extinguished, whenever they are not litigated in the proper forum within the prescribed period. The quicken diligence by making it, in some measure, equivalent to right. They discourage litigation by bringing in one common receptacle all the accumulations of past times which are unexplained, and have now, from lapse of time, become inapplicable. It has been said by John Voet with singular felicity that controversies are limited to a fixed period of time lest they should be immortal while men are mortal-ne autem lites immrtales essent, dum litigantes mortals sunt.’

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[1] Vide Constitutional Law Study Guide. 2008. Muckleneuk. Pretoria. UNISA. Page189

[2] Supra n 22: confer: page 11

[3] Vide Interpretation of Statutes Study Guide. 2010. Muckleneuk. Pretoria. UNISA. Page 20

[4] Op cit n 24 page 32

[5] Vide Standard General Insurance Co Ltd v Verdun Estates (Pty) Ltd 1990 2 SA 693 A ; Cape Town Municipality v Allianz Insurance Co Ltd 1990 1 SA 30 (C); Protea International (Pty) Ltd v Peat Marwick Mitchell & Co 1990 2 SA 199 (A)

[6] Vide The origins of South African Law Study Guide.2008. Muckleneuk. Pretoria. UNISA. Page 124

[7] Vide South African Law Reform Commission Act 19 of 1973. http://www.salawreform.justice.gov.za.Date of use 4 July 2012

[8] Supra n 27 Page 157

[9] Vide Discussion paper 126. Project 125. Prescription Periods. 2011. Page 11.(taken verbatim) http://www.salawreform.justice.gov.za.Date of use 4 July 2012

[10] Vide De Jager and others v ABSA Bank Bpk 2000 4 All SA 481 (A)

[11] Vide In Uitenhage Municipality v Molloy 1998 1 All SA 146 (A)

[Citizen X]

6.5 Extinctive prescription in practice
6.5.1 Meaning of as soon as the debt is due
Section 12(1) of the 1969 Act provides that prescription shall commenceto run as soon as the debt is due. In Deloitte Haskins & Sells Consultants (PTY) LTD v Bowthorpe Hellerman Deutsch (PTY) LTD at page 527,^[1] the court held that s 12(1) of the Prescription Act, which provided that 'prescription shall commence to run as soon as the debt is due', meant that there had to be a debt immediately claimable by the debtor or, stated another way, that there had to be a debt in respect of which the debtor was under obligation to perform immediately: prescription could not begin to run against a creditor before his cause of action was fully accrued, i.e. before he was able to pursue his claim.
Qualitative research revealed that in Mr A, B, C and Miss C’s case, the debt became due when they failed to make payments on their accounts.^[2] Mr A’s ... account became due when he failed to make a payment in January 2007. The last payment he made was in December 2006. Mr B’s ....account became due when he failed to make a payment in March 2008, his last payment was made in February 2008. Mr C’s .... Personal Loan account became due in January 2008. The last payment he made was in December 2007. Miss C’s ....., Vehicle finance account became due in May 2007. The last payment was made in April 2007.


In all of these cases, the creditor did not sue out summons despite the facts that their telephonic and letter demands were been ignored. The creditor should have sued out summons at the earliest instance but within three years from the date of the debt becoming due.

According to SALRC, The Prescription Act, contains no definition of the term “due” and the courts have held that the term must therefore be given a wide and general meaning, namely that of a debt “owing and already payable” or “immediately claimable”, or “immediately exigible at the will of the of the creditor”, or a debt “in respect of which the debtor is under an obligation to perform immediately”, or not to do something.^[3]
6.5.2 Meaning of a debt
Qualitative research revealed that Mr A, B, C and Miss D were all debtors by virtue of the fact that they owed money to a bank, financial institution or major retailer. Collectively they owed money to ...........^[4]
A debt is a noun and is defined as a sum of money that somebody owes. A debtor is a person, country, or an organisation that owes money.^[5] A debtor cannot exist in a vacuum, there has to be a creditor. Creditor is a noun and is a person, company etc. that somebody owes money to.^[6] According to Berry et al (2007: 197) a credit transaction arises from a purchase or sale, or the lending or borrowing of money which results in a debt payable at a later stage.^[7] Section 55 of The magistrates Court Act 32 of 1944 defines debt as any liquidated sum of money due.^[8]
In Electricity Supply Commission v Stewards and Lloyds of SA (PTY) LTD,^[9] at page 341, HOLMES AJA stated the finding of the Judge a quo that the 1969 Act applies is undoubtedly correct. See s 16 of Act 68 of 1969. Although the 1969 Act views prescription from the point of view of the debtor in providing that a "debt" shall be extinguished by prescription after the lapse of a period of time, a "debt" is necessarily the correlative of a right of action vested in the creditor, which likewise becomes extinguished simultaneously with the debt…the date on which a debt "arises" is not necessarily the same date as that on which the debt becomes "due", although these two dates usually coincide.
It was common cause in this Court that a debt is ‘that which is owed or due; anything as money, goods or services, which one person is under obligation to pay or render to another.
Loubser(1996: 29) qualifies the meaning of debt as interpreted in Master v IL Back LTD.^[10] The court stated ‘In considering the words, ‘debt,’ one considers their ordinary meaning and the context in which they appear and the general intention of the Legislature. The ordinary meaning of debt is ‘that which is owed and due; anything as money, goods and services which one person is under obligation to pay or render to another. It seems to me that in ordinary parlance, a debt is a firm obligation to pay, whether now or later. The notion of a possible conditional obligation to pay is at variance with this.’

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[1] Vide Deloitte Haskins & Sells Consultants (PTY) LTD v Bowthorpe Hellerman Deutsch (PTY) LTD 1991 (1) SA 525 (A) at page 527

[2] Qualitative research. The full and further particulars of Mr A, B, C, D and Miss E have been disclosed to SALRC to prove integrity of the research.

[3] Loc cit n 30 page 18.

[4] Supra n 34

[5] Vide Oxford Advanced learner’s Dictionary. Eight Addition. Oxford University Press. 2010. Page 376

[6] Supra n 37 page 344

[7] Vide Berry PR et al. About Financial Accounting. 2nd edition. Lexis Nexis Durban. Page 197

[8] Vide s 55 Magistrates Courts Act 32 of 1944. http://0-discover.sabinet.co.za.unisa.ac.za/document. Date of use 3 July 2012

[9] Vide Electricity Supply Commission v Stewarts and Lloyds of SA 1981 (3) SA 341 (A), confer Loubser(1996:29, para 4

[10] Loc cit n 8. Page 29

[Blurock]

What about when a debtor makes a written promise say after 6 months and he then does not keep that promise?

[Citizen X]

What about when a debtor makes a written promise say after 6 months and he then does not keep that promise?

A written promise is very detrimental to the debtor in many ways, firstly, it will be classified legally as a bill of exchange which prescribes in 6 years from the date it was signed, secondly, the creditor can use the 'provisional sentence,' procedure which is very similiar to summary judgement, evidence by both parties via affidavit, the provisional sentence summons is reserved for liquid documents such as cheques and promisory notes, thirdly, the creditor can go the summary judgement route, again, affidavit and the defendant must come to court strictly and only to state that he/she has a defence, where the magistrate/judge can see that their is no defence i.e. just delaying tactics, summary judgement will be granted immediately without trial!!!

[Citizen X]

6.5.3 Debtor’s wilfully preventing creditor from becoming aware of knowledge of the debt
Section 12(2) of the 1969 Act reads if the debtor wilfully prevents the creditor from coming to know of the existence of the debt, prescription shall not commence to run until the creditor becomes aware of the existence of the debt.^[1]
Quantitative research revealed that Banks, Financial Institutions and major retailers do have sufficient knowledge of such debt due to their information technology infrastructure.^[2] They have computer systems in place as well as support staff to immediately act on the existence of a debt that is due. 2542 respondents to a questionnaire, out of 3086 that responded, stated that they either had an account with a bank, major retailer or telecom/cell-phone provider. This is 82%. In all these cases their creditor had adequate information technology in place to inform them when a debtor stops paying.
6.5.4 Knowledge of the debtor
Section 12(3) of the 1969 Act reads, a debt shall not be deemed to be due until the creditor has knowledge of the identity of the debtor and of the facts from which the debt arises: Provided that a creditor shall be deemed to have such knowledge if he could have acquired it by exercising reasonable care.
In Harold Gunase v Ramesh Anirudh^[3] 2011 ZA SCA 231, at paragraph 14 the court said section 12(3) imposes a duty on the creditor to exercise reasonable care to obtain knowledge of the identity of the debtor and the facts from which the debt arises. A creditor is not allowed to postpone the commencement of the running of prescription by his failure to take necessary steps.
Quantitative research revealed that 2976(96%) of the respondents provided that they have been contacted by the creditor or the creditor’s agent several years after making the last payment on their account(s). This in and of itself is prima facie evidence that if a creditor can contact you telephonically then there is no wilful conceal of a debtor’s identity. Creditors have adequate debtor information on their computer systems and are subscribers to either ITC Transunion, XDS or Experian. A simple trace alert will reveal the debtor’s current contact information.
In GERICKE v SACK 1978^[4] at page 830. DIEMONT JA, provided inter alia that, in order to establish the identity of the person on whom service is to be effected the sheriff will require the name and address of the debtor…. Our South African Law is not constant and enduring and is subject to amendment. The Magistrates Court Rules have been amended. Rule 9(3) accommodates various methods in which service of summons can take place. This includes:
1.To the said person personally or to his or her duly authorised agent: Provided that where such person isa minor or a person under legal disability, service shall be effected upon the guardian, tutor, curator orthe like of such minor or person under disability;
2. At the residence or place of business of the said person, guardian, tutor, curator or the like to some person apparently not less than 16 years of age and apparently residing or employed there: Provided that for the purpose of this paragraph, when a building, other than an hotel, boarding house, hostel or similar residential building, is occupied by more than one person or family, "residence" or "place of business" means that portion of the building occupied by the person upon whom service is to be effected;
3. At the place of employment of the said person, guardian, tutor, curator or the like to some person
apparently not less than 16 years of age and apparently in authority over him or her or, in the absence of such person in authority, to a person apparently not less than 16 years of age and apparently in charge at his or her place of employment;
4. If the person so to be served has chosen a domicilium citandi, by delivering or leaving a copy thereof at the domicilium so chosen;
5. If the plaintiff or his or her authorised agent has given instructions in writing to the sheriff to serve by registered post, the process shall be so served: Provided that a debt counsellor who makes a referral to court in terms of section 86(7) (c) or 86(8)(b) of the National Credit Act may cause the referral to be served by registered post or by hand.
6. Where the person to be served with any document initiating application proceedings is already
represented by an attorney of record such document may be served upon such attorney by the party initiating the proceedings.^[5]
It can never be successfully argued that Corporate South Africa is unable to reach a debtor by means of judicial service of summons.
In Minister of Trade & Industry of RSA v Farocean Marine (Pty) Ltd ^[6] at paragraph 35, the court stated that Section 12(3) thus aims to achieve a balance between these two opposing interests, and ensures that negligent, rather than innocent, inaction is penalised. Accordingly, the yardstick to be used in determining the standard of care required of the creditor is:“. . . to do no more than that what could be expected, in the circumstances, of a reasonable man. Jacobs v Adonis 1996 (4) SA 246 (C) at 253B.
According to Loubser(1996:102), section 12(3) applies where the creditor is ignorant of either the identity of the debtor or the facts from which the debt arises, or of both, and where the creditor could not have acquired the requisite knowledge by exercising reasonable care. The onus is on the debtor to show when the creditor knew or was deemed to know of the debtor’s identity and the incidence of this burden of proof does not alter merely because the facts happen to be within the knowledge of the creditor. Loubser correctly adds that the court will take cognizance of the handicap under which the debtor may labour where the facts concerning the creditor’s awareness are within the creditor’s exclusive knowledge, and in these circumstances less evidence will be required of the debtor to establish a prima facie case. Loubser(1996:103)


6.5.5 Corporate South Africa is by and large an exception to section 13 of the 1969 Act.

Banks, financial institutions and major retailers are juristic persons. They have natural persons in their employ. To this end the aforementioned can never be a minor, insane and it’s very rare that such corporate companies will be under curatorship. A juristic person can never be married to a natural person. It may however occur that a senior manager working for a juristic person is married to a natural person. It is unlikely that Banks, Financial Institutions and major retailers will have a partnership agreement with an unemployed person that is in debt. Quantitative research revealed that 90% of all respondents were unemployed when contacted by the creditor.

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[1] Loc cit n 4.

[2] Vide research analysis page of this essay and vide annexure

[3] Harold Gunase v Ramesh Anirudh 2011 ZA SCA 231

[4] In GERICKE v SACK 1978 (1) SA 821 (A) Page 830


[5] Vide Faris JA and Hurter E. The Students Handbook for Civil Procedure. 5^th Ed. Lexis Nexis. Durban. 2010. Page 160

[6]Minister of Trade & Industry of RSA v Farocean Marine (Pty) Ltd [2006] 1 All SA 644 (C)
To be continued

[Citizen X]

To learn more about LAWfully challenging credit bureau listing follow this link:-
http://www.theforumsa.co.za/forums/a...9&d=1339823165

[Citizen X]

To be continued..not near done!