Standard Bank of South Africa Ltd v Miracle Mile Investments 67 (Pty) Ltd and Another

Standard Bank advanced a credit facility to Mr Papachrysostomou, repayable in monthly instalments over 240 months and containing an acceleration clause. Miracle Mile Investments 67 (Pty) Ltd and Present Perfect Investments 116 (Pty) Ltd stood as sureties and registered mortgage bonds over their properties as security. The principal debtor defaulted on instalments in October 2008. Standard Bank sent a National Credit Act s 129 notice demanding arrears but did not elect to cancel the agreement or accelerate the full debt. The respondents later applied for cancellation of the mortgage bonds, arguing that the bank’s claim had prescribed because prescription began running from the debtor’s default. The High Court agreed, and Standard Bank appealed.

The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order dismissing the respondents’ application with costs.

The case clarifies South African law on prescription in instalment agreements with acceleration clauses under the current Prescription Act. It confirms that prescription of the accelerated debt runs only from the creditor’s election to enforce the clause, not from the debtor’s default, aligning judicial authority with modern academic commentary.