A Comprehensive Overview of Recent Case Law Developments under the Prescription Act 68 of 1969
Introduction: Prescription in South African law,
governed by the Prescription Act 68 of 1969, plays a pivotal role in
determining when debts become unenforceable. This article delves into the
latest case law developments, shedding light on critical aspects of the Act.
From the definition of "debt" to the nuances of acquiring
"knowledge" and the impact of acknowledgements of liability, we
explore key considerations that influence the prescription period. Recent
cases, such as Makate v Vodacom (Pty) Ltd [2016] ZACC 13 and Links
v Member of the Executive Council, Department of Health, Northern Cape Province [2016]
ZACC 10, have significantly shaped the legal landscape.
Summary of the Law: The Prescription Act stipulates
that debts prescribe after 3 years. To prevent losing the right to
enforce a claim, a creditor must initiate proceedings within this timeframe.
Section 12 outlines the calculation of the prescription period, starting from
when the debt becomes "due." Notably, a debt is deemed due only when
a creditor possesses the requisite "knowledge" of both the debtor's
identity and all relevant facts.
Recent case law, such as Makate v Vodacom, has refined the
definition of "debt." The Constitutional Court narrowed it to signify
an obligation to pay money, deliver goods, or render services. This
interpretation distinguishes personal rights from real rights, impacting claims
arising from diverse contractual contexts.
In
the realm of knowledge acquisition, the Links case clarified that, particularly
in professional negligence claims, the party raising the prescription defence
must show the claimant had sufficient facts to reasonably suspect negligence.
Furthermore, the First
National Bank v Scenematic One (Pty) Ltd [2016] ZASCA 60 case
introduced the concept of "deemed knowledge," emphasizing the
importance of reasonable care in acquiring necessary information.
The acknowledgement of liability, explored in "Acknowledgement
of liability" in a 'without prejudice' communication: KLD
Residential CC v Empire Earth Investments 17 (Pty) Ltd [2016] ZAWCHC 83,
highlighted that 'without prejudice' communications, despite their protected
status, can interrupt prescription under Section 14(1) of the Act. The case
reaffirmed the need for admissible evidence to establish such acknowledgement.
Addressing the commencement of prescription in the context
of contractual acceleration clauses, the case provided crucial insights. It
distinguished scenarios where the debt becomes due immediately upon breach from
instances where the creditor's election triggers the due date. This distinction
emphasized the significance of precise contract language in determining when
prescription starts running.
Conclusion: Recent cases have significantly
contributed to the clarity and legal certainty surrounding the Prescription Act
in South African law. The refined definition of "debt," insights into
acquiring "knowledge," the concept of "deemed knowledge,"
the acknowledgement of liability in 'without prejudice' communications, and the
interpretation of contractual acceleration clauses have collectively enhanced
our understanding of prescription principles.
These legal developments underscore the importance of
precise language in contracts, especially regarding when debts become 'due.'
Parties must navigate the intricacies of the Prescription Act to protect their
rights and obligations. The courts' nuanced analyses provide practitioners and
litigants with valuable guidance, fostering a more informed and predictable
legal landscape in the realm of debt prescription in South African law.
