Glenwin Frieslaar NO and Others v Petrus Andre Ackerman and Another

The first and second appellants, as trustees of the Frieslaar Family Trust, together with the third appellant (G & I Plumbers CC), entered into four identical agreements of sale with the respondents on 25 February 2010 for the purchase of immovable properties. The agreements required the respondents to pay all transfer costs and to effect transfer of the properties into the Trust's name. Clause 7.1 stipulated that "the Seller shall be liable for all transfer costs, transfer duty, stamp duty...and transfer of the property into the name of the Purchaser...and the conveyancing shall only commence after such costs have been paid by the Seller." The purchase price was to be set off against R2,160,000 allegedly owed by the respondents. On 4 July 2012, the respondents purported to cancel the agreements. The Trust did not accept the cancellation and instituted action on 7 March 2013, seeking transfer of the properties or, alternatively, payment of damages. The respondents raised a special plea of prescription, arguing that the claim arose on 25 February 2010 when the agreements were concluded, and that summons served on 7 March 2013 was more than three years later.

• When does a debt become 'due' for purposes of prescription under section 12(1) of the Prescription Act 68 of 1969?
• Does an obligation to pay transfer costs and to transfer property constitute a 'debt' as contemplated in section 10(1) of the Prescription Act?
• Where a contract does not stipulate a time for performance, when does prescription commence to run?
• Can a creditor postpone the commencement of prescription by its own conduct or inaction?
• Does a breach of contract create a new debt or does the original obligation remain intact for prescription purposes?

The appeal was dismissed with costs. The special plea of prescription was upheld, meaning the appellants' claim for transfer of the properties was extinguished by prescription.

1. An obligation to pay transfer costs and to transfer property constitutes a 'debt' as contemplated in section 10(1) of the Prescription Act 68 of 1969. 2. A debt is 'due' within the meaning of section 12(1) when the creditor acquires a complete cause of action - when the creditor has all the facts necessary to institute action and the debtor is under an obligation to perform immediately. 3. Where a contract is silent as to the time for performance, the debt becomes due immediately upon conclusion of the contract, and prescription commences to run from that date. 4. A creditor cannot by its own conduct (action or inaction) postpone the commencement of prescription. 5. Breach of contract through failure to perform does not create a new debt or a fresh cause of action for specific performance - the original contractual obligation remains intact for prescription purposes.

The court noted (but did not decide) the ongoing debate regarding the precise ambit of the word 'debt' following recent Constitutional Court decisions, notably Makate v Vodacom (Pty) Ltd, which expressed reservations about giving the term an overly broad meaning and suggested it should be interpreted narrowly. The court stated this debate must be left for another day when pertinently raised with full argument. However, the court observed that even adopting a narrow meaning of 'debt', the obligations in this case would constitute a debt. The court also observed that the appellants' alternative claim for damages was not persisted with at the appeal hearing, and that the appellants expressly disavowed reliance on the respondents' purported repudiation of the agreements.

This case provides important clarification on the application of the Prescription Act 68 of 1969, particularly regarding when prescription commences to run in respect of contractual obligations. It reaffirms the principle that where a contract is silent as to the time of performance, the debt becomes due immediately upon conclusion of the contract, and prescription begins to run from that date. The case emphasizes that a creditor cannot postpone prescription by remaining inactive, and that breach of contract does not create a new debt but leaves the original obligation intact. It serves as a warning to creditors to exercise vigilance in enforcing their contractual rights timeously or face losing them through prescription. The judgment reinforces the policy rationale for prescription as promoting social certainty, discouraging stale claims, and encouraging prompt resolution of disputes.