Dear Uncle Oswald
I hope that 2023 is treating you fairly. As usual, I again am in trouble with the law and I need your advice. The problem is this. As part of my road construction business, I own a quarry on the Free State platteland. To supplement my income, I have leased part of the quarry to a local farmer, Piet Wildeboer. Our lease agreement was concluded on 1 January 2018 for an indefinite period. The lease agreement contains a compulsory arbitration clause. It also stipulates expressly that Wildeboer may use gravel from the quarry for his own farming purposes but not for commercial gain. From the first day of the lease agreement Wildeboer started selling gravel from the quarry to other farmers in the district. As you know, I am a very patient person. I have written numerous letters to Wildeboer over the years, asking him to refrain from doing this but he keeps on ignoring me. My last letter to him in March 2023 was to the effect that if he does not refrain from removing gravel from the quarry for commercial gain immediately, I will refer the matter to arbitration and claim an award to interdict him from doing so. I have now received a response from Wildeboer’s attorney stating that my intended claim for an interdict is a debt for purposes of the Prescription Act 68 of 1969 and, because I have known about this situation since 2018, more than three years ago, my claim has been extinguished by prescription.
My question to you is this: Is Wildeboer’s attorney just blowing hot air, or have I been tripped up by prescription?
Except for the constant loadshedding, 2023 is treating me fairly otherwise. My knowledge of the law of prescription was a bit outdated. I last dealt with this topic at varsity when Paul Kruger and I played rugby for the Diggers Club. That was before Paul became the president of the Zuid-Afrikaansche Republiek. As you can imagine, I had to do some considerable research.
To answer your question properly, it is necessary to consider certain provisions of the Prescription Act 68 of 1969 (the Act), and to take note of what our courts have had to say about it.
The relevant sections of the Act essentially reveal the following:
- In terms of section 10 (1) a debt shall be extinguished by prescription after the lapse of the period determined by section 11.
- Section 11 (d) provides that, in this case, the period of prescription is three years.
- Section 12 (1) provides that prescription shall commence to run as soon as a debt becomes due.
- Section 12 (3) provides that a debt is deemed to be due when a creditor has knowledge (or could have acquired such knowledge by exercising reasonable care) of the identity of the debtor and the facts from which the debt arises.
So far, at face value at least, there appears to be substance in the argument put forward by Wildeboer’s attorney. You as creditor have, since 2018, had knowledge of the identity of Wildeboer as debtor and the facts on which you intend to base your claim for an interdict. As such, the debt became due in 2018 and it apparently was extinguished by prescription three years later in 2021.
But this can only be so if your envisaged claim for an interdict against Wildeboer is in fact a debt for purposes of the Act.
The Act does not contain a definition of a debt. To determine what a debt is for purposes of the Act, guidance must be sought from the judgments of our courts.
Some time ago, in 1996, the erstwhile Appellate Division (AD) interpreted the meaning of a debt for purposes of the Act in Desai NO v Desai and Others 1996 (1) SA 141 (A) at 141 I in the following terms:
‘The term “debt” is not defined in the Act, but in the context of s 10 (1) it has a wide and general meaning, and includes an obligation to do something or refrain from doing something.
Again, in terms of the judgment in Desai, Wildeboer’s attorney appears to have a point. Your envisaged claim for an interdict is indeed based on an obligation owed by Wildeboer to refrain from doing something (using gravel from the quarry for commercial gain).
However, the AD’s interpretation of a debt for purposes of the Act, as it was expressed in Desai in 1996, is no longer the law.
In Makate v Vodacom Ltd 2016 (4) SA 121 (CC) at 151 F-I the Constitutional Court came to a different conclusion. It held that the meaning of a debt for purposes of the Act is the meaning attributed to it in Electricity Supply Commission v Stewarts and Lloyds of SA (Pty) Ltd 1981 (3) SA 340 (A) at 344 E-G namely:
‘Something owed or due: something (as money, goods, or services) which one person is under an obligation to pay or render to another. A liability or obligation to pay or render something.’
The Constitutional Court held in Makate that a debt for purposes of the Act refers only to an obligation to pay money, deliver goods, or render services. It does not include an obligation to do something or refrain from doing something. A debt as contemplated in section 10 of the Act does not apply to a claim for a prohibitory interdict.
The Constitutional Court subsequently followed the same approach in Off-Beat Holiday Club and Another v Sanbonani Holiday Spa Shareblock Ltd and Others 2017 (5) SA 9 (CC). In this judgment the Constitutional Court remained satisfied that the wide meaning attributed to a debt for purposes of the Act in Desai had been narrowed down considerably in Makate. In Off-Beat (at p. 24A) the Constitutional Court confirmed that a debt for purposes of the Act must be understood to be limited to a claim for;
‘… something owed or due, or an obligation to pay money, deliver goods or render services to another.’
In summary, the following: Prior to 2016, the position used to be that a debt for purposes of the Act included an obligation to do something or refrain from doing something. This is no longer the case. The current state of South African law is that a debt for purposes of the Act is limited to money, goods, or services which one person is under an obligation to pay or render to another. A debt for purposes of the Act does not include an obligation to do something or refrain from doing something.
Therefore, Frikkie, to use your own words, I think that Wildeboer’s attorney is blowing hot air.