The Isibaya Fund v Visser and Another

The Isibaya Private Equity Fund, governed by the Public Investment Corporation Act 23 of 2004, invested R70 million (R35 million as equity and R35 million as a loan) in Lesiba Healthcare Holdings (later Carewell Group of South Africa (Pty) Ltd) as part of a joint venture to establish a healthcare group. The respondents were directors of the holding company. The Fund alleged that by 2001 the company had become dormant, lost its capital, and was unable to repay the loan. The company was wound up in January 2005, followed by an inquiry under sections 417 and 418 of the Companies Act 61 of 1973. Thereafter, the Fund instituted action under section 424 of the Companies Act, seeking to hold the respondents personally liable for reckless or fraudulent trading and claiming R80 million in damages. The respondents raised a special plea that the claim had prescribed after three years in terms of section 11(d) of the Prescription Act 68 of 1969.

The appeal was dismissed with costs, and the order of the High Court upholding the special plea of prescription was confirmed.

The case clarifies the meaning of 'the State' in section 11(b) of the Prescription Act and confirms that statutory bodies or funds, even if publicly controlled or established by legislation, are not necessarily part of the State for prescription purposes. It reinforces the application of the three-year prescription period to public entities that operate as separate juristic persons, extending the reasoning in Holeni.