The Prescription Period Applicable to a Debt Secured by Notarial Bond

• Jurisdiction: South Africa
• Citation: (2016) 27 Stell LR 374
• Author: Max Loubser
• Pages: 374-392
• Date: 27 May 2019
• Published date: 27 May 2019

THE PRESCRIPTION PERIOD APPLICABLE TO

A DEBT SECURED BY NOTARIAL BOND

Max Loubser

BA LLB DPhil (Oxon)

Director, Cluver Markotter Inc., Stellenbosch

1 Introduction

There are conicting jud gments on the question whether the 30-year

prescription pe riod provided for in section 11(a)(i) of the Prescription Act 68

of 1969 (“Pre scription Act”) for “any debt secured by mortgage bond” also

applies to debts secured by a nota rial bond.1 The matter tu rns on whether

the words “mortgage bond” a s used in section 11(a)(i) should be int erpreted

to include a “notarial bond” and concerns various r ules of interpret ation

and important policy considerations. This ar ticle contains an analysis of the

recent cases with reference to t he relevant rules of interpretation and policy

considerations.

The following sub-sections deal w ith the relevant policy considerations

(2); the rules or canon s of interpretation to det ermine the mea ning of

“any debt secured by mortgage bond” (3), specically gramm atical or

literal interpretation (3 1), context (3 2), purpose and policy of differential

presc ription per iods (3 3), and diff erent langu age texts of a st atute as an ai d to

inte rpreta tion (3 4). The jud gments a re then con sidered cr itically (4), followed

by conclusions (5).

2 General policy considerations

In Professor JC de Wet’s 1967 Memorandum on prescription,2 containing

a draf t for a new stat ute, which (with relatively mi nor amendments) became

the Prescription Act, he was cha racteristically brief and to the point on the

purpose and policy of extinctive prescription. He wrote that t he essential

purpose of ext inctive prescription is to end the uncertainty that the efuxion

of time brings in resp ect of a debt.3 South African judicial stateme nts on policy

likewise refer to the promotion of cer tainty in the debtor-creditor relationship.

1 In Absa Bank L td v Hammerle Grou p (Pty) Ltd (7457/13) [2013] ZAGPPHC 402 (20 December 2013)

SAFLII (accessed 25-05-2016) (per

Mabuse J); Land a nd Agricultu ral Developm ent Bank of South A frica v Factapro ps 1052 & Ismail

Ebrahim Darsot (64702/2010) [2014] ZAGPPHC 293 (19 May 2014) SAFL II www.saflii.org/za/

cases/ZAGPPHC/2014/293.html> (accessed 25-05-2015) (per Pha tudi A J); and Land and Agr icultural

Developmen t Bank of South Africa v Phato Fa rms (Pty) Ltd 2015 3 SA 100 (GP) (per Molopa-Sethosa

J) the c ourts decid ed that a “m ortgage bond” as referred to in s 11(a)(i) of the Pr escription Act does not

include a “nota rial bond”; where as in Land and Agr icultural De velopment Ba nk of SA v A Boeke &

Bellevue Auc tioneers (Pt y) Ltd TPD 17-02-2011 case nos 12506/07 and 40079/08, R abie J held that it does .

2 The Memorandum was s ubsequently publ ished in JC de Wet Opuscula Miscellanea: Regsgeleerde

Lesings en Advi ese van J C de Wet (1979) 135-144.

3 108-109.

374

(2016) 27 Stell LR 374

© Juta and Company (Pty) Ltd

In Oliff v Minnie (“Oliff ”),4 Van den Heever JA referred to “two legislative

motives: the supinity (desidia) of a plainti ff who does not en force his r ights,

who should therefore blame himself, and the difculty felt by defendants who

have to repel ancient claims”.

The practical pur pose of extinctive prescription is explained in Murray &

Roberts Constru ction (Cape) (Pty) Ltd v Upington Municipality:

“Although many philosophical explanations have been suggested for the principles of extinctive

prescription …, its main practical purpose is to promote certainty in the ordinary affairs of people.

Where a creditor lays claim to a debt, which has been due for a long period, doubts may exist as to

whether a valid debt ever arose, or, if it did, whether it has been discharged. (See De Wet and Yeats

Kontraktereg en Handelsreg 4th ed. at 255.) The alleged debtor may have come to assume that no

claim would be made, witnesses may have died, memories would have faded, documents or receipts

may have been lost, etc. These sources of uncertainty are reduced by imposing a time limit on the

existence of a debt, and the relevant time limits reect, to some extent, the degree of uncertainty to

which a particular type of debt is ordinarily subject (s 11 of the Act).” 5

The main object of extinctive prescription is to create legal certainty

and nality i n the relationship bet ween debtor and cred itor after the lapse

of a period of time. The focus of extinctive prescription is primarily on the

relationship between debtor and creditor, but wider considerations of public

policy also apply, such as the promotion of certainty i n commercial affairs of

other interes ted parties, enh ancement of the efciency of t he courts, and the

promotion of societal stability.6

In particula r, the institution of extinctive prescription serves the following

purposes:

(1) it primarily protects the interests of the debtor, ensu ring fairness to the

debtor, who after a certai n time becomes exempt from performance;

(2) it enhances the effectiveness and efciency of the courts – judicial

economy and the smooth functioning of the legal system are ser ved, because

parties are obliged to br ing their disputes to t he courts without undue delay,

so that they can be effectively resolved;

(3) it pr omotes societal stability by bringi ng certaint y and  nality in the

relationship between debtors a nd creditors; and

(4) to some extent, exti nctive prescription also serves the interests of the

creditor, who benets from knowledge of the time after which it would be

futile to inst itute action again st the debtor.

These general policy considerat ions guide the cour ts in their application of

the specic rules of extinctive prescription. The guiding policy considerations

pertinent to t he question discussed in this art icle are:

(a) that the primary focus of extinctive prescription is on protection of the

debtor; and

4 1953 1 SA 1 (A) 4G-H.

5 1984 1 SA 571 (A) 578F-H.

6 Farlam J, in Ryland v Edros 1997 2 SA 690 (C) 712, refers to a numbe r of authorit ies and con cludes as

follows:

“In my view it must be a ccepted that e xtinctive pres cription was int roduced, at lea st in part for th e benefit

of the public.”

DEBT SECURED BY NOTARIAL BOND 375

© Juta and Company (Pty) Ltd