Prescription refers to the lapsing of time within which legal action must be instituted against the debtor to prevent the debtor from escaping liability. Prescription is dealt with in accordance with the Prescription Act 68 of 1969 (“the Act”). The different prescribed time limits within which legal action must be instituted for the recovery of debt is contained in chapter 3, section 11 of the Act.
Section 11 lists various time periods applicable to certain debts, for example Section 11(a)(ii) states that the period of prescription for a judgment debt is 30 (thirty) years, whereas section 11(d) states that the period of prescription for any other debt not listed in sub-Sections (a) to (c) is 3 (three) years. The failure to institute legal action to recover the debt prior to the expiry of the prescribed time limit will mean that your debt has prescribed, which means you may not legally enforce the recovery of that debt. The running of prescription is interrupted by a number of scenarios which are encapsulated in Sections 14 and 15 of the Act, namely an acknowledgment of debt and the institution of legal proceedings.
With the above in mind, one can imagine the following situation:
- Party A has a claim against Party B.
- Prescription has been running for a number of years.
- Party A becomes aware that the enforceability of the debt will prescribe during the national lockdown.
- There is no possibility of instituting legal proceedings to interrupt the running of prescription.
- Party B is not admitting any liability whatsoever for the debt owed to Party A.
The lockdown has prevented the legal fraternity from issuing any new process and has resulted in attorneys not being able to act on their client’s instructions to institute legal proceedings. The implications of the lockdown mean that no summons or applications may be issued, unless the matter is of an urgent nature (for example domestic violence, matters involving children or bail). If the enforceability of Party A’s debt against Party B does not fall within the ambit of an urgent matter, then Party A runs the risk of the matter being thrown out of court and the possibility of an adverse cost order.
Although the Government published a gazette in which it directed the courts to issue process where claims would prescribe during the lockdown period, some courts have issued practice directives stating that no new process will be issued unless urgent. In addition, some Sheriff’s offices have closed their doors during this lockdown, save for urgent matters as described above, therefore the serving of the legal process becomes the next hurdle to overcome, all the while when there are restrictions on movement in place.
From the above, it becomes apparent that Party A will have difficulty in protecting its rights and enforceability of its claim against Party B should same prescribe during the national lockdown. The first hurdle would be to issue the process while the second hurdle would be to serve the process.
Section 13 of the Act deals with the delay of the running and completion of prescription in certain circumstances. More specifically, Section 13(1)(a) states:
“if the creditor is … prevented by a superior force including any law … from interrupting the running of prescription as contemplated in section 15(1), the period of prescription shall not be completed before a year has elapsed after the day referred to in paragraph (i)” [own emphasis]
With reference to Section 13(1)(a), argument can be made that the recent pandemic and subsequent declaration of a state of disaster, resulting in the nationwide lockdown may be viewed as a superior force, preventing Party A from instituting legal action against Party B for the recovery of the debt, and therefore interrupting the running of prescription.
In order for the argument that the pandemic and resultant lockdown will be viewed as a superior force, the court will need to take cognisance of all relevant factors in arriving at a conclusion. All factual evidence will need to be placed before the court to prove, objectively, that the lockdown prevented Party A from enforcing its claim against Party B thus interrupting the period of prescription. In other words, but for the lockdown, Party A would have instituted legal action against Party B thus interrupting the running of prescription in order to legally enforce the debt.
The answer as to whether one will be successful in proving to the court that the lockdown (the superior force) prevented the interrupting prescription will depend on the merits of the matter. It is for this reason that a party who is of the opinion that their debt may prescribe during the lockdown contact our offices so that we may discuss their matter, and ascertain the relevant facts of the matter in order to fully advise of their legal position.
*** Please note that this article (and the information contained herein) is to be used to inform members of the public. This article (and the information contained herein) should not be construed as being legal advice, and members of the public are advised to consult their legal practitioner where possible. Harris Billings Incorporated will not be held liable for any damages suffered as a result of reliance on this article (or the information contained herein). ***