Sentrachem Limited v A L Terreblanche

Mr Terreblanche was a member of the Sentrachem Group Pension Fund. In October 2010, following approval of a surplus apportionment scheme under the Pension Funds Act 24 of 1956, the pension fund made two payments to him on the same day. The first payment was accepted as due, although its calculation was disputed. The second payment of R453 872.31 was made in error, under the mistaken belief that it was also due. Upon discovering the error on 27 October 2010, the pension fund instituted action based on the condictio indebiti to recover the amount. Summons was served on 22 August 2011. The pension fund was later voluntarily dissolved, and its liquidator, Mr Andrew, was substituted as plaintiff. In September 2013, the liquidator ceded the claim to Sentrachem, which was substituted as plaintiff in November/December 2013. After substitution, Mr Terreblanche raised a special plea of prescription, contending that the substitution amounted to new proceedings instituted after the three-year prescription period had expired.

The appeal was upheld with costs. The order of the High Court was set aside. The defendant’s special plea of prescription was dismissed. The defendant was ordered to pay Sentrachem R453 972.31, together with interest at 15.5% per annum from 11 July 2011 to date of payment, and the costs of the action.

The case authoritatively confirms that substitution of a plaintiff after litis contestatio following a cession does not interrupt or nullify the earlier judicial interruption of prescription. It reinforces the distinction between a ‘debt’ and a ‘cause of action’ for purposes of the Prescription Act and affirms that a cessionary acquires the claim with all procedural and substantive incidents intact. The judgment provides important clarity on prescription, cession, and substitution of parties in South African civil procedure.