Madibeng Local Municipality v Public Investment Corporation Ltd

During the late 1980s and early 1990s the Brits Transitional Local Council raised short-term loans, later refinancing them through loans from the Public Investment Corporation Ltd (PIC). On 11 January 1994 Brits issued three zero coupon stock certificates (BR25, BR20 and BR26) to the PIC. Madibeng Local Municipality later succeeded Brits. The certificates matured on 30 June 2003 (BR25) and 30 November 2003 (BR20 and BR26). Madibeng failed to pay the full amounts when due but made various partial payments over several years and repeatedly requested balance confirmations for its financial statements. The PIC sued in 2010 for the outstanding amounts. Madibeng raised a special plea of prescription and earlier a defence of lack of authority, the latter having already been rejected in prior proceedings.

The appeal was dismissed with costs, save that paragraph 2 of the High Court order was amended. Madibeng was ordered to pay the PIC R162 639 962.00 with interest at 10% per annum from 30 June 2003 in respect of BR25 and from 30 November 2003 in respect of BR20 and BR26.

The case clarifies that the Public Investment Corporation, although an organ of state, is not 'the State' for purposes of section 11(b) of the Prescription Act, reinforcing a narrow interpretation of that provision. It also provides authoritative guidance on tacit acknowledgements of liability, confirming that partial payments and requests for balances can interrupt prescription. The judgment underscores the importance of pleadings and deemed admissions in civil litigation.