Prescription: use it or lose it

Prescription is the process by which legal rights are lost as a result of a failure to take action over a period of time. Prescription is regulated primarily by the Prescription Act 68 of 1969.

It is generally accepted that the purpose of prescription is to provide certainty, especially in the case of debtors, and to encourage members of the public to actively pursue debts rightfully owed.

The Act provides that “a debt shall be extinguished after prescription of the relevant period”. Prescription, therefore, can be pleaded in any action by the Defendant but a court cannot on its own accord raise prescription as a defence.

The periods of prescription of debts are:

1. thirty years in respect of
   1. Any debt secured by a mortgage bond;
   2. any judgment debt
   3. any debt in respect of any taxation;
   4. any debt owed to the state in respect of mining;
2. fifteen years in respect of any debt owed to the state on a loan or sale or lease of land, unless a longer period  applies;
3. six years in respect of a debt arising out of a negotiable instrument or notarial contract unless a longer period applies;
4. three years in respect of any other debt unless specifically provided otherwise by statute.

Prescription begins running as soon as the debt is due unless the debtor willfully prevents the creditor from knowing of the existence of the debt, in which case it commences to run when the creditor becomes aware of its existence.  There are a number of ways in which prescription can be interrupted but primarily, if there is an express or tacit acknowledgment of existing liability made by the debtor to the creditor or if the debtor is served with a summons, prescription will be interrupted.

To find out more about prescription and its application, in particular with regards to when prescription begins to run, see the recent case FNB & Naude v Scenematic One (Pty) Ltd which concerns the defence of prescription raised in relation to claims arising out of unauthorised debit orders.

The case is available here: http://www.saflii.org/za/cases/ZASCA/2016/60.html.