Steyn and Another v Venter and Others

The appellants and the first respondent were members of Hartzer & Steyn Beleggings CC. Acting on behalf of the close corporation under s 50 of the Close Corporations Act 69 of 1984, the first respondent instituted claims against the appellants for repayment of loans and/or unlawful misappropriation of the CC’s funds. Three categories of claims were advanced: (i) payment of R4 million from the sale of an immovable property in 2009 allegedly paid to the appellants instead of the CC; (ii) rental income from a farm owned by the CC but paid to the appellants and another member between 2001 and 2008; and (iii) various payments made from CC funds to the appellants between 2005 and 2013. The appellants raised a plea that all claims had prescribed under s 10(1) read with s 11(d) of the Prescription Act 68 of 1969. The respondents contended that prescription was delayed in terms of s 13(1)(e) because the CC is a juristic person and the appellants were members of its governing body.

The appeal was dismissed with costs, jointly and severally, the one paying the other to be absolved.

The decision clarifies that s 13(1)(e) of the Prescription Act applies to close corporations and that members of a close corporation constitute its governing body for purposes of delaying prescription. It aligns prescription principles applicable to companies and partnerships with those governing close corporations, reinforcing protection of fiduciary and trust-based relationships within closely held business entities.