Sentrachem Limited v A L Terreblanche

The respondent, Mr Terreblanche, was a member of the Sentrachem Group Pension Fund. During the implementation of a surplus apportionment scheme approved under the Pension Funds Act 24 of 1956, the pension fund made two payments to him on 6 October 2010. The first payment was accepted as due, but the second payment of R453 972.31 was made in error, under the mistaken belief that it was also owed to him. The pension fund instituted action based on the condictio indebiti to recover the erroneous payment, serving summons on 22 August 2011. After litis contestatio, the pension fund was voluntarily dissolved, and its liquidator, Mr Andrew, was substituted as plaintiff. Mr Andrew later ceded the claim to Sentrachem Limited, which was substituted as plaintiff in November/December 2013. The respondent did not object to any substitution. In 2015, the respondent raised a special plea that the claim had prescribed, arguing that substitution after the three-year prescription period amounted to the institution of new proceedings.

The appeal was upheld with costs. The order of the High Court was set aside and replaced with an order dismissing the special plea of prescription, directing the respondent to pay R453 972.31 with interest at 15.5% per annum from 11 July 2011, and ordering the respondent to pay the costs of the action.

The case authoritatively confirms that substitution of a plaintiff after litis contestatio following a cession does not interrupt or negate the prior judicial interruption of prescription. It clarifies the distinction between a debt and a cause of action for prescription purposes and reinforces that a cessionary acquires all procedural and substantive rights of the cedent, including locus standi and enrichment claims. The judgment provides important guidance on prescription, cession, and substitution in South African civil procedure.