Judicial Precedent

ABSA Bank Bpk v De Villiers (Snr)

CitationNot available from the judgment text; the appellate judgment itself is unreported in the text, although the court a quo decision is reported as 1998 (3) SA 920 (O).

JurisdictionZA

Area of Law

Law of PrescriptionSuretyshipInsolvency LawLaw of Evidence (Onus of Proof)

Facts of the Case

The respondent stood surety and co‑principal debtor in solidum for his son’s indebtedness to ABSA Bank. The son’s estate was provisionally sequestrated on 30 April 1992 and finally sequestrated on 4 June 1992, at which time the principal debt was already due and payable. ABSA proved several claims against the insolvent estate, including the principal debt, all of which were accepted by the trustees. The first and final liquidation and distribution account was confirmed by the Master on 13 September 1993, with no dividend paid on the principal debt. A second amended final account was confirmed on 4 February 1997, again with no dividend. ABSA instituted action against the surety in February 1996. The respondent raised prescription and novation as defences. ABSA relied on section 13(1)(g) of the Prescription Act 68 of 1969, alleging that prescription of the principal debt (and thus the suretyship debt) was delayed because the debt was the subject of a claim lodged against an insolvent estate.

Judicial Outcome

The appeal was dismissed with costs.

Legal Significance

The case clarifies the operation of section 13(1)(g) of the Prescription Act in the context of insolvency and confirms that the creditor bears the onus of proving facts delaying prescription. It affirms that confirmation of a final liquidation and distribution account brings sufficient finality to terminate the statutory impediment to prescription. The judgment also reinforces the principle that extinction of the principal debt by prescription extinguishes the surety’s liability.